American Airlines to try rolling hubs

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American Airlines to try rolling hubs
By Dan Reed, USA TODAY

American Airlines, which lost $2.8 billion in 18 months, next week will
announce the first big steps in an evolving plan to become profitable
again. Company officials declined to discuss the details of the changes,
expected to be announced on Tuesday. But one change telegraphed by American
executives is the expansion of the "rolling hub" concept the airline has
tested at its Chicago hub to reduce delays and increase efficiency. Another
is likely to be the phase-out of 74 Fokker 100 jets, the smallest of its
833 planes. American is expected to extend the rolling hub concept to its
huge Dallas/Fort Worth airport hub and its smaller St. Louis hub. In
traditional hubs, banks of 20 to 50 planes arrive and depart within a few
minutes of each other. American generated a more steady stream of arrivals
and departures by "de-peaking" its Chicago hub, erasing inefficiencies tied
to drastic swings in ground activity there.

A rolling hub also increases the hours planes can be flown each day,
freeing them to seek more revenue elsewhere.
While aircraft ground time at the hub doesn't change much, planes can
depart "spoke" airports as quickly as they can be reloaded. In a
traditional hub-and-spoke operation, planes sometimes remain at spokes for
long periods, timing their return to the hub to be a part of a bank of
arriving flights. The changes at Chicago netted American extra flying time
equal to having three more big jets and two regional jets. For travelers,
the rolling hub concept means some could see their time on the ground
between flights grow. A few could actually see their connect times reduced.
But American officials believe most will see little change. The change,
though, does entail significant risk for the airline. Travelers
historically have chosen airline flights based on total travel times.
Peaked hubs were created to produce shorter elapsed times.

American's change might cause competitors to promote their shorter elapsed
times and connecting times, says an industry official close to American.
But management believes the savings outweighs any possible loss in revenue
and market share. Retiring the Fokker 100s has long been under
consideration. Equipped with 87 seats, they are expensive to operate
relative both to larger planes like the Boeing 737 and to smaller regional
jets, that can be used on the routes now served by Fokker 100s. The number
of job cuts is  unknown. But executives hope attrition will mean fewer
layoffs.




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