Rarely do two competitors fight over a hub airport in the United States. For the most part, legacy carriers have so deeply divided up their territory across the United States that there are so few situations in which two airlines will directly compete for the same market. Legacy carriers make their money by cornering the business travel market in certain cities and by controlling huge market shares at the facilities that they call their hubs.
Chicago O’Hare International Airport
IATA/ICAO Code
ORD/KORD
CEO
Chicago Department of Aviation (CDA) Commissioner Jamie Rhee
Terminals
Terminal 1 |
Terminal 2 |
Terminal 3 |
Terminal 5
Currently, the only real instances of two airlines going head-to-head are in the New York, Washington, D.C., and Los Angeles metropolitan areas. In these markets, the carriers that do compete have mostly isolated different market segments and determined unique ways in which they plan on competing. In Chicago, however, there is a one-of-a-kind turf war in which both parties are really turning up the heat. In this article, we will take a deeper look at the direct competition between American Airlines and United Airlines
for control of Chicago O’Hare International Airport
(ORD).
Why Are These Two Airlines Going Head-to-Head?
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As a legacy airline hub, Chicago O’Hare International Airport (ORD) is a major connecting gateway for both United Airlines and American Airlines. Chicago is an extremely valuable business travel market due to the city’s large financial industry, and it is thus a very attractive market for legacy carriers. United and American are both full-service network carriers, meaning that they aim to prioritize efficiency in their operations.
United and American both generate the largest portion of their revenues from business travelers, who are often willing to pay high prices for the comfort of premium cabins. Gaining a foothold in key business travel markets is essential for carriers like these, as they can be key gateways from which an airline might originate a large portion of its business travel demand. However, both American and United are not looking to expand their market shares post-pandemic and are butting heads at the airport.
An airport like Chicago O’Hare is extremely busy, and, as a result, has extremely little room for additional flights to be added. Its runways are constantly packed, and its gates are constantly filled, with security lines often backing up. Thus, carriers like United and American need to compete in different kinds of ways, such as targeting the highest-spending travel demographic.
A Deeper Look At Exactly What Is Going On
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Chicago is the center of a larger-scale effort by American Airlines to become more competitive in lucrative business travel markets. In the years following the pandemic, American Airlines has struggled the most of the three major legacy carriers, with its returns to investors lagging behind those of other airlines like Delta and United. During this period, the airline has seen its market share diminish in places where it has had to compete directly with Delta or United.
As a result, the airline is looking to turn up the heat and not let United slowly eat away at its market share at O’Hare Airport, a facility that has long been a major hub for American. The airport is the fourth-busiest in the United States, making it a lucrative market to conquer and one that serves as a key asset for United. Unlike its hubs in Los Angeles and the New York Area, United does not have to compete with Delta in Chicago.
Therefore, the gloves are off, and American and United are going toe-to-toe to earn the hard-earned fares of customers flying in and out of O’Hare. These two airlines have been quick to announce flights to new destinations, debut their flashiest new aircraft, and even offer new kinds of amenities for customers. It is a textbook example of a turf war, one in which both airlines have the incentive and desire to win.
Related
American Airlines Sues Chicago As O’Hare Airport Gates “Unreasonably” Allocated To United
The carrier was unpleased with unreasonable seat allocations.
American Airlines Was The First To Turn Up The Heat
Photo: Wirestock Creators | Shutterstock
This month, American Airlines decided to sue the city of Chicago to stop a plan that would give more gate availability to its primary rival, United. Through discussions with Simple Flying, the airline made it very clear that it believed the city had violated a contract it had made with American Airlines, and that the reallocation of gates had been triggered preemptively. United Airlines did immediately attempt to dismiss this lawsuit as baseless.
At the end of the day, American Airlines is arguing that United’s plan to expand at O’Hare leaves no place for American Airlines to remain a key competitor at the facility. This, in the eyes of American, would reduce the airline’s opportunity to operate more flights to and from Chicago. The carrier’s major pitch is that the lack of a strong competitor at O’Hare would result in higher fares for passengers through decreased competition, according to Yahoo Finance.
From an economic standpoint, the airline’s argument does make some sense. Reduced competition on routes to or from Chicago O’Hare will result in United having more power to raise ticket prices for customers. While this might allow the airline to generate further profits, it could certainly harm the consumer. The airline’s lawsuit is currently pending.
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United And American Have Both Made Other Moves To Capture The Chicago Market
Photo: Wirestock Creators | Shutterstock
United Airlines has been quick to try and target a dominant stance in the Chicago market. The carrier is currently headquartered at the iconic Willis Tower in downtown Chicago, and it has routinely attempted to bill itself as the city’s hometown airline, much in the same way that JetBlue attempts to do so in New York. The carrier has tried to put a lot of its eggs into the Chicago basket, and, for the most part, it appears to have worked.
The airline has also been quick to advertise its presence in the city, something anyone who has driven to O’Hare airport in recent years has been unable to miss. The airline has a huge sign approaching the airport that points toward the airline’s terminals and refers to the carrier as “Chicago’s #1 Airline.”
American Airlines certainly is not preparing to go quietly. The airline is ramping up its operational presence at O’Hare, with the carrier offering 20% more seats on flights from Chicago this upcoming summer than it did last year, according to data from aviation analytics company Cirium. American Airlines has also been quick to promote new destinations like Naples, Italy, where United does not fly to from O’Hare Airport.
A Battle Taking Place Amid Industry Uncertainty
This turf war is taking place when overall travel demand is weakening and when many airlines are making moves to cut costs by restricting flight schedules. The aviation industry is currently facing macroeconomic headwinds related to Donald Trump’s trade wars and increased geopolitical uncertainty. With recession fears looming, airlines are moving rather cautiously.
Therefore, it would seem rather counterintuitive that airlines might choose to double down on investing in a costly turf war at this point in time. American Airlines and United Airlines, both premium carriers, are well aware that the market is currently being propped up by high-spending travelers, and capturing this kind of demand will be essential for financial success during these periods of increased uncertainty.
As a result, both American Airlines and United Airlines have decided that the premium Chicago market is simply too good to let go to their competitors. Therefore, both have an incentive to continue fighting for every last Chicago-based traveler possible.
Join The Conversation
United Or American: Which Airline To Fly From Chicago O’Hare?
According to a handful of recent SF news reports, American and United are involved in some competition over Chicago O’Hare. American Airlines has been making moves to regain market share of O’Hare in response to United’s claims to be “Chicago’s # 1 Airline.” American recently announced an increased frequency of flights between Marquette Sawyer Regional Airport and Chicago O’Hare International Airport, adding a second daily flight between the two airports, which started on May 5.
This comes after news of American adding seven new Chicago winter routes, including two domestic destinations (Akron/Canton and Roanoke) and five international destinations. American will compete directly with United on five of these routes.
Is United Chicago’s #1 airline? Which airline dominates O’Hare? Do you have a preference on which airline to fly out of Chicago O’Hare International?
American Is Taking A Page Out Of United’s Playbook
Photo: kamilpetran | Shutterstock
American’s response to United’s continued growth at Chicago-O’Hare might be the most interesting thing about this turf war. United Airlines has long been a carrier targeting niche routes, looking to capitalize on the potential of stimulating travel demand.
American Airlines has elected to launch a new set of routes from Chicago-O’Hare that serve smaller, under-the-radar destinations that are not served by any other airline nonstop. This is pretty much a page straight out of United’s playbook.
As a result, the carrier’s reaction demonstrates that American is willing to get creative when fighting over its turf in Chicago. We will simply have to watch and see what the next 12 months could bring for this extremely heated head-to-head showdown.
