32 more flights from DIA seen as move to strengthen hub

Author: Chris Walsh
Source: Rocky Mountain News

United Airlines will add 32 departures at Denver International Airport in coming months, boosting flights from its second-largest hub by 7 percent and making good on promises to bolster its presence here.

The expansion involves increasing nonstop flights to nearly 40 cities United already serves from DIA in addition to previously announced new service to Toronto.

The announcement comes just two weeks after United emerged from a drawn-out Chapter 11 bankruptcy protection case in which it pared routes and flights nationwide.

But United, the largest airline in Denver, said it has been able to change the way it uses gates and aircraft to reduce the amount of time it takes to board, unload and clean planes. When fully implemented, the changes will free up the equivalent of 10 jets, United said.

The nation's second-largest carrier also said it has seen an increase in demand even as it faces new competition from low-cost giant Southwest Airlines, which started service in Denver last month.

"We've said all along that we're going to compete vigorously with our competition and at the same time provide service that meets our customers' needs," said United spokesman Jeff Green.

Southwest launched from DIA with 13 daily flights to three cities but quickly added limited service to two other markets and announced plans for more growth.

United, some observers say, likely is trying to strengthen its hub. The carrier has been increasing its flights at DIA in the past few years as overall demand has risen. But its market share at DIA has dropped by about 10 percent, largely because of the growth of locally based rival Frontier Airlines.

Southwest's arrival could further erode United's market share.

"I wouldn't be surprised if part of this is attempting to protect their market in Denver," said Scott Hamilton, an aviation consultant at Leeham Co. LLC in Sammamish, Wash.

Some of the growth also likely is seasonal, Hamilton said. Compared with last summer, United's capacity from Denver will be up 4 percent.

United's plans include adding more daily mainline and regional jet service from Denver to Boston, Baltimore, Seattle, Los Angeles, San Diego and St. Louis, among other cities. It also will launch a daily flight on Ted, United's low-cost arm, to Reno, Nev.; Las Vegas; and Ontario, Calif.

United's total daily departures from Denver will hit 455 after it adds the flights.

DIA officials lauded the move, saying it further cements United's presence here after several years of uncertainty while the carrier was in bankruptcy.

It also could foreshadow more growth.

"We look forward to the possibility that it may prompt additional international capacity out of Denver," DIA co-Manager Turner West said in a statement.

The expansion isn't necessarily unexpected.

United last year cut a deal to restructure its debt relating to a failed automated baggage system at DIA. Under the agreement, the city lowered United's debt on the system by $184 million - a savings of more than $200 million, including interest payments. In exchange, United agreed to route more connecting traffic through Denver in coming years, a move expected to eventually increase DIA's annual revenues from concessions and fees by $9 million.

United doesn't have to route more connecting passengers through Denver this year, but its expansion plans are "consistent with their commitment to us," said Denver City Councilman Michael Hancock. "It's good for us. We'll get more folks coming to town, spending money and visiting airport concessions, which will boost sales tax and revenue for DIA."