Analysis of the route that forced out United Airlines chief executive officer Jeffrey Smisek and two other executives this week by Routesonline reveals that few passengers flew it and it was unlikely to be profitable.
Allegations in the corruption scandal against Smisek, former United executive VP communications and government affairs Nene Foxhall and former United senior VP government affairs Mark Anderson – both of whom have resigned – spotlight a route that United flew possibly as a favour to the former chairman of the Port Authority of New York and New Jersey, which operates United’s Newark International Airport hub.
The route is from Newark to Columbia, South Carolina, near where Port Authority Chairman David Samson had a vacation home. Columbia (CAE) airport enplaned 50,406 passengers in July 2015 with Delta (43 per cent) and American/US Airways (40 per cent) dominating the traffic. This route had previously been served by Continental Airlines from Newark ahead of its merger with United Airlines and was flown under the Continental Express banner by ExpressJet Airlines until June 2009.
United has a 9.5 per cent share of CAE’s traffic with small-jet service by partner carriers to Washington Dulles International and Houston Bush Intercontinental airports. However, from September 2012 to March 2014 ExpressJet Airlines operated a twice-weekly flight for United Airlines from its hub in Newark to Columbia, once on Thursdays and once again on Monday mornings. The flights, operated using 50-seat Embraer ERJ-145 regional jets, were stopped three days after Samson’s resignation.
Our analysis of Sabre Airport Data Intelligence demand and capacity statistics show flights were 14.8 per cent full in December 2012 just after the route began, when United carried an estimated 166 passengers on the route, despite the holiday period. Flights in both directions were below 50 per cent full in 17 of the 19 months it operated. Its best month was the month it stopped, March 2014, still with just an estimated 406 passengers.
The low load factors on the 802-mile route – most in the 30 per cent range according to monthly data – indicate that there were fewer than 20 passengers on most flights, which used valuable Newark slots. United’s mainline breakeven load factor was above 85 per cent during the second quarter of 2014, according to PlaneStats.com.
Planned Investment
In 2014 the Port Authority announced plans to spend $8 billion to improve conditions at Newark, as well as New York LaGuardia and JFK International airports. The investment would include the first rail link from Newark Airport to downtown New York City, a $1.5 billion project that Samson publicly supported. The New York Times reports that federal investigators also are looking into new United flights at Atlantic City, New Jersey, which is just 88 miles south of Newark.
Port Authority Chairman Samson stepped down from his post in March 2014 after an investigation into his office’s involvement in another scandal, this one to close down lanes on the busy George Washington Bridge to put pressure on a local politician and as a favor to New Jersey Governor Chris Christie, who is a candidate for President of the United States.
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