You don’t hear the term “fortress hub” anymore. In fact, just the reverse. What’s getting all the attention is the gradual dismantling of hubs—US Airways scaling back its Pittsburgh operations, Delta deconstructing its Dallas/Ft. Worth facilities. In short, the strategic tool that could be described as both the boon and bane of air travel for the past two decades is losing its edge.

In its place you’ll now find airlines nostalgically doing things the old-fashioned way—namely, flying point to point. What’s the attraction? Traveling from A to B in a straight line has a very special allure: simplicity in an overheated, congested age.

Pay Less Connect More
Hubs have been the darling of the airline industry almost since deregulation in the late ‘70s.

More accurately, they’ve been the industry’s rotary circles with passengers entering one way and exiting on another road—flying, say, Asheville to Atlanta, Delta’s major hub, and connecting to a flight to New Orleans. In other words, you have to take two regional flights when one shorter Asheville-New Orleans flight might do the job better.

Why did airlines fall in love with the hub-and-spoke system? You can tick off the advantages pretty easily.

• It’s a cheap way to “offer passengers a valuable commodity—surplus seats in the form of frequent flyer programs,” Aaron Edlin explained in 2001 in an analysis prepared for FindLaw’s Legal Commentary.
• Another plus—“subtler but profound” —is that “in a typical large hub like Dallas, roughly half the passengers on a given flight will be ‘through’ passengers,” some of whom flew in from San Francisco, Los Angeles, or Albuquerque to get from Dallas to, say, Knoxville. “The passengers who are simply flying from or to Dallas are ‘gravy,’” Edlin pointed out. “If it wants, a major carrier can afford to fly them for nearly nothing.” 
• Though hub passengers are relatively cheap to serve, major airlines historically didn’t pass along the economies of scale to passengers but, in an in-your-face style, charged a so-called hub premium amounting to “between 20 percent and 40 percent of the fare.” So low were some of the costs that the majors could drop prices temporarily to kill intruding competitors.

“Treacherous Economics”
Whatever their faults—frequent congestion and lost connecting time—hubs have proven to be workable. But profitable? That’s guesswork because you can’t easily cost out airport and airline investments and maintenance. You’ll get a good start if you jot down the high fixed costs that accompany hub operations.

One early analysis of the hub-and-spoke system laid out in Business Week refers to “the treacherous economics of the carriers’ far-flung networks (which) are enormously expensive to run—and business travelers seem no longer willing to pay the high ticket prices that make them viable.”  It goes on to say that “if the airlines were to cut back too much, they will surrender the one advantage—service—they have over discount point-to-point carriers.” Shrink a hub bit by bit? “It’s very difficult to incrementally dismantle a hub,” MIT aeronautics professor Peter P. Belobaba said.

In any case, so many biz travelers have been nominally brainwashed to accept hubs as the way to go that the hub-and-spoke creation seems to satisfy the needs of most travelers.

Before the full onslaught of today’s airfare competition, business travelers tolerated making connections because airlines priced them lower than nonstops. (If there were extra miles involved, it was a plus for members of frequent flyer programs.) And the airlines thought they needed to protect their hubs because of the billions of dollars they were spending to build and promote these massive service centers. 

Now major airlines, taking a cue from budget carriers, are providing more A-to-B service without stops in between. As airline consultant Back Aviation Solutions sees it, nonstops that bypass airline hubs are back to the frequencies of 2001—and growing.
 
Flying Direct
Two mostly post-9/11 factors—point-to-point service and horrendously unpleasant hub airports—are whittling away at the dominance of hubs.

Low-cost carriers: In the ‘90s, when the major airlines had the skies pretty much to themselves, hubs were indeed as inviolable as a fortress with more than two dozen primary and secondary operational switchboards—United, for instance, ruled its roost at O’Hare with satellite hubs in Denver and San Francisco. The formula: Feed passengers from outlying cities and towns into a hub and shoot them out on another flight to their real destination, which could be “anywhere in the world,” as one hub critic puts it.

Was there another way? Southwest, a scrappy up-and-comer driven by innovative executive Herb Kelleher, showed that you could make money by designing a route map of point-to-point service devoid of connecting flights. It stripped away the frills—for instance, no assigned seats, peanuts instead of pâté—and swore it could turn around a plane in minutes to get it airborne again to keep generating revenue.

Southwest became the business model for dozens of airline startups here and abroad. The best performing copycat to date is JetBlue, now more than five years old with plenty of proof that its own special recipe works: a single-plane fleet of Airbuses (with a regional-jet Embraer fleet in the offing), comfortable seats, direct seatback TV, congenial cabin attendants, and—like Southwest—a sensible sequence of online booking screens. Even sky-high jet fuel prices haven’t done it in.

In the potentially rich transcon market, JetBlue has carved out an unusual non-hub position. For bicoastal business travelers in particular, it now provides nonstops to Long Beach (south of L.A.), Ontario (45 miles east), and Burbank (with just launched service on L.A.’s north side). Beyond attractive fares, JetBlue puts you closer to where you want to be in L.A.’s sprawling layout connected by gridlocked freeways. Where is LAX in all this? Pretty much ignored.

On that route alone, between New York and L.A., few travelers want to make intermediate stops in, say, Denver simply to honor the hub-and-spoke system. They prefer to save otherwise time-wasted hours, as well as money.

Following JetBlue’s lead, Song, the new chirpy subsidiary on Delta, is emphasizing point-to-point flights. And it is playing to the more cheerful traveling lifestyle that Southwest and JetBlue have nurtured.

The dramatic rise of low-cost flights, now accounting for some 35 percent of all commercial air traffic, is partly the product of online booking, which enables passengers to do lots of comparative shopping. Price is now the key ingredient in choosing an airline and a flight.

Security-plagued airports: If direct nonstops are more than just the new flavor of the year, airport avoidance is a huge part of the appeal. Concourse congestion, an irritant more observable than documented with surveys, has become an avoidable discomfort.

You can reduce the number of long lines, shoe inspections, and pat-downs from two or three to only one in a nonstop business trip.  Why endure more lines in, say, Chicago or Minneapolis, two cities where you once had to stop to get around the country?

Major Moves
Reacting to the threats to their hub system, the so-called legacy airlines have added more than 150 nonstop routes in the past year. It may be a small start. Direct flights now constitute only about 11 percent of all domestic seats, according to airline-consultant Back Aviation Solutions. But that’s an increase of more than 1 percent over the past two years, a significant trend considering the millions of seats flown annually.

Take the case of struggling Delta, now burdened with the worst debt load of any domestic airline. Over the past year it has added some 50 nonstops to its roster. Where travelers heading out from Greensboro, North Carolina to Tampa once had to change planes in Atlanta or Delta’s secondary hub in Cincinnati, now they can get there directly. 

The nonstop contagion is spreading.

• Northwest, for one, has added some 40 direct flights from Indianapolis, Milwaukee, and other cities it serves.  
• US Airways is not far behind with 25 nonstop routes.
• Continental has 16 non-hub routes.
• American has already opened up more than 10 direct routes and expects more to come in the fall and winter.
• Southwest, always scouting for routes where it hopes to win, has recently launched nonstops from Pittsburgh to four other cities.
   

Here Come the RJ’s
It’s not just the demand from travelers for low-priced convenience that’s pushing the nonstop trend.

On the other side of the equation are the airlines and aerospace manufacturers, and now, for the first time, they can put 70- to 100-passenger regional jets on lower-volume direct routes, replacing the loathsome smaller RJs that can be more uncomfortable than a multi-stop trip.

In terms of utilizing fleets effectively, the airlines can let the bigger stretch 737s, 757s, A320s and other jets handle the heavily trafficked routes. With the advanced design of the latest RJs, the majors don’t have to worry about wasting major equipment on routes where they can’t keep load factors high with big jets. And passengers are happier with the increased comfort.

In clever micromanagement, a few airlines are experimenting with offering travelers both nonstops and connections on the same route. For instance, Delta is running direct flights between Hartford and Columbus but also routing through one of the airline’s hubs. And it can do that with approximately the same fairly low fare, thanks to Delta’s cost-cutting in other areas of its operation.     

But as low-cost carriers continue to expand their point-to-point services, they’re offering a few surprises. Air Tran Airways, for example, has occasional fare sales like $44 one-way on its nonstops between Boston and Akron. And the airline sticks with its Boeing 717 and 737 jets, thus boasting cabins roomier than those on RJs.