American Airlines goes to ''rolling hub'' strategy

American Airlines goes to ''rolling hub'' strategy.

Publication: The Washington Times
Publication Date: 06-NOV-02 Format: Online - approximately 738 words

Byline: Tom Ramstack, THE WASHINGTON TIMES

American Airlines started a new flight-scheduling plan last week at all three major airports in the Washington area to increase the efficiency of its operations.

The airline says the only difference passengers might notice is that one flight out of Washington Dulles International Airport to St. Louis leaves at 7:11 a.m. instead of 6:54 a.m.

"That allows us to staff one less gate for the morning flights," said Marty Heires, American Airlines spokesman.

Nevertheless, the "rolling hub" scheduling system represents a significant change from previous strategies by major airlines.

Before the September 11 attacks and a slumping economy created record losses, most big airlines clustered their flights around peak flying hours at "hub" airports, which roughly follow the morning and evening rush hours. A hub is a large airport where flights are clustered around peak times and sent out in "spokes," or connections to other airports.

To arrange the flights in close sequence, the airlines often leave planes waiting on standby until their departure times arrive.

Under the rolling hub concept, airlines try to reduce waiting time for airplanes and return them to the air as promptly as possible to cut costs and generate more revenue.

Rolling hubs are one of several tactics airlines are using to cut costs and avoid bankruptcy. Layoffs and service cutbacks are others.

AMR Corp., American's parent company, is trying to cut $4 billion in annual costs, up from an earlier target of $3 billion, it said yesterday.

Even if American Airlines is successful with rolling hubs, the airline industry is going to need to do much more to regain revenue lost in the last two years, according to analysts.

"You're not going to cut costs enough to get back to profitability," said David Swierenga, chief economist for the Air Transport Association, the trade association for major airlines. "With the economy in the tank, there's a big revenue shortfall."

Nevertheless, he predicted the industry would be watching the experiment by American, the industry's largest airline.

"I think every airline is probably looking at it at least," Mr. Swierenga said.

Delta Air Lines also uses rolling hubs. Continental Airlines uses the strategy at Newark International Airport.