# Watching a United Airline Executive Beg For Money...



## Anderson (Jan 27, 2016)

At a passenger rail day-on-the-hill in Richmond that I went to on Monday I accidentally found myself in a rather fascinating Appropriations meeting (I wound up getting pulled into the hearing by my member of the House of Delegates who I ran into in the hall). Basically, there were two matters: A rather mundane one concerning timing payments to a regional transportation authority and a deeply fascinating one involving IAD and United Airlines.

Regrettably there was no literal panhandling involved, but it would seem that United's hub at Dulles is having *ahem* issues. Basically, Dulles splashed out for a massive terminal expansion about 8 years ago while projecting massive ridership increases (I believe the MWAA was estimating 41m pax by about 2022). Well, a funny thing happened to the economy...and then a bunch of outside-the-perimeter slots got added to National...and _then_ a bunch of airlines started running larger planes into DCA than they did before. DCA traffic shot up by about 20% while IAD traffic fell by about 6-8%...though per the presentations it was domestic traffic which got rather badly trashed while international traffic held up...mostly.

This has left Dulles with one of the highest Cost Per Enplanement statistics in the country, and as a result United has been caught in a frequency-cutting vicious cycle, either cutting the number of flights to various destinations or outright dropping destinations. This is apparently starting to threaten international traffic, at least per United and MWAA's presentations, since connections are starting to fall apart (does this sound familiar to anyone?) though there's still robust traffic at IAD. It's also threatening the cost-coverage agreements between MWAA and the airlines (United was only willing to sign a three-year agreement versus the 7-10 year agreements which are generally sought out). In this context, United and MWAA were asking the Virginia General Assembly for $50m over two years ($25m/yr) to try and bring the CPE down in what appeared to be a somewhat desperate attempt to stop United's hub at IAD from collapsing. This is in addition to funds MWAA was able to get DCA-serving airlines (a lot of airlines serve both) to contribute towards the situation at IAD.

The legislators seemed at least somewhat skeptical (this is a _lot_ of money in many respects, and it resembles a bailout insofar as MWAA got in deep with debt for Dulles) and the United spokesman got something of a grilling to the effect of "How do we know you won't be back here in two years asking for more/will this _actually_ be enough?" Given the possibility of a recession, the specter of this turning into a real problem for the state seemed to be on their mind.

Regrettably, nobody brought up what struck me as the elephant in the room, namely that the problems IAD is having are actually _problems with IAD_: It's too far out in the suburbs, has minimal transit accessibility (yes, there's a commuter bus out there but it's still quite a bit of a hike), and there probably aren't many travelers who (given a perfect world) wouldn't prefer to have their flight go into DCA rather than into IAD, and that the lack-of-accessibility issue won't be resolved until the Silver Line gets out there (3-4 years out). That being said, the prospect of watching a major airline hub collapse (and possibly taking the finances of IAD and MWAA with it) was grotesquely fascinating.

I'm likely going to be writing my Delegate opposing the request, at least in part, largely because of the IAD-related issues that "just" throwing money in won't resolve. IAD is a rather flawed airport at the moment and there's a _reason_ passengers are choosing (in impressive numbers) to fly to DCA/BWI (especially DCA) instead.


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## Palmetto (Jan 27, 2016)

Interesting, and good points.


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## XHRTSP (Jan 27, 2016)

IAD is just a crappy airport and I for one am glad I don't have to fly for United nor do I have to fly into Dulles any more.


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## Bob Dylan (Jan 27, 2016)

Good stuff Cliff, keep us posted! ( is there a Mica type in the House with a passion to cut IAD costs?)


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## jis (Jan 27, 2016)

Indeed I prefer EWR to IAD for the entry into US by United from the east. The managers of IAD should have their heads examined. And preferring EWR over IAD says something!

As things stand Virginia has United over the barrel. Given that there is zero spare capacity at EWR, which in spite of being very expensive is also very lucrative and that there is sufficient government contract international flying out of IAD which can cover a lot of sin of a poorly managed airport I don't believe United will de hub IAD upto a significant pain point, beyond which of course they will eat the lumps and bolt. The short contract is to keep that option open.


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## WoodyinNYC (Jan 27, 2016)

Subsidizing Amtrak is wrong. Subsidizing United Airlines is right. Of course. I understand completely.


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## DetroitTed (Jan 27, 2016)

XHRTSP said:


> IAD is just a crappy airport and I for one am glad I don't have to fly for United nor do I have to fly into Dulles any more.


Just connected internationally and then flew out of IAD back home to PHX -- nothing changed my opinion that this is the worst airport in the country to fly in or out of. The baggage delivery was abysmal and it looked like the carousels were installed in the late 50's. On a plus note, I was very pleased with the actual flights on United.


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