Why United Airlines’ huge bet on Newark airport is not paying off

On a good day, passengers flying into Newark airport in New Jersey can catch a glimpse of the Statue of Liberty. On a bad day they have to sleep on the floor. No company’s fortunes are more entwined with the airport than United Airlines, which accounts for 57% of passengers. Roughly an hour from Manhattan, Newark is a central pillar of CE Scott Kirby’s plan to use bigger, more efficient jets to grow the carrier. It is also United’s transatlantic gateway at a time when international travel is rebounding sharply from the coronavirus pandemic. But last month, the airport was the source of operational difficulties, which undercut Kirby’s claim that United was better prepared for the busy summer season than rivals. Kirby has since said the airline will operate fewer flights from Newark to minimise disruption, something that analysts fear could create an opening for competitors. “It hurts,” said Savanthi Syth, an analyst at Raymond James. “It’s good, high-quality demand that you want to be able to meet. It’s never a good thing if you have to cut down capacity. The risk is that you cut it, and someone backfills.” The meltdown at the end of June was caused by thunderstorms, but Kirby was quick to blame understaffed air traffic control towers for failing to deal with weather that airlines were once able to take in their stride. “Airlines can plan for things like hurricanes, sub-zero temperatures and snowstorms,” he wrote in a memo to employees on July 1. “United has never seen an extended limited operating environment like the one we saw this past week at Newark.” Passengers at Newark camped out on chairs, tables and luggage carts, while the disruption at the airline’s hub had a knock-on effect on services departing from and arriving at other airports. In total, 3,300 United flights were cancelled over a seven-day period and 7,800 were delayed.<br/>