United maintains dominance at SFO

February 5, 2013

San Francisco International at night (Photo: Trodel / Flickr)

Today San Francisco International released a report card of sorts for 2012 full of interesting stats.

What surprises you most about these numbers? For me, the biggest surprise is that after five years at SFO (and lots of local love and attention), Virgin America still only has a 9% market share at SFO. United clearly dominates at SFO with nearly 50% market share. Any surprises here for you? Please leave your comments below.

SFO Announces Record Passenger Traffic in 2012

Record of 44.5 million passengers breaks previous milestone

SAN FRANCISCO – February 5, 2013 – The San Francisco International Airport (SFO) announced an all-time record for passenger traffic in 2012, with a total of 44.5 million passengers traveling through SFO. This surpasses the previous record of 41 million passenger set in 2011, and represents an 8.5% increase in traffic year-over-year.

Economic impact
SFO continued to be a vital source for job creation and contribution to local economies. The airport generated a total of 29,555 direct jobs and $1.7 billion in personal income. SFO also generated $469 million in state and local taxes. Construction projects launched during 2012 continue to add jobs to the area.

Market share
SFO offers a wide variety of travel options to passengers, 30 international carriers serving 31 international points, as well as 15 domestic airlines offering nonstop service to 74 cities in the U.S. In the Bay Area, SFO accounts for two-thirds of all domestic flight activity, and continues to serve as the primary international gateway.

Bay Area Market Share (Domestic Flights)
66% SFO
19% OAK
15% SJC

Bay Area Market Share (International Flights)
97% SFO
2% SJC
1% OAK

Airline Market Share at SFO
46% United Airlines
9% Virgin America
8% (tie) Delta, Southwest/AirTran

Total landings by operator
29% United Airlines
28% SkyWest [United]
9% Virgin America

New routes launched at SFO in 2012

• May – Reagan National Airport (DCA) via United Airlines
• June – additional service to Paris (CDG) via XL Airways-France
• Aug – Raleigh-Durham (RDU) via United Airlines
• Aug – Reagan National Airport (DCA) via Virgin America

Joyce

We always used Continental, and have mileage through them – since they merged with United, we usually use them (mileage retained) for International flights. I may use Southwest this year for a NH flight, because it lands closer (and more easily) than Boston.
PH

“Dominant” is far from the adjective that I would use to describe United’s presence at SFO. A number of the other legacy airlines have truly dominant hubs, which I think of as market share well over 80% at the sole major airport in a major metropolitan area. That kind of dominance gives significant pricing power. I think San Francisco Bay Area residents are rather fortunate — United’s approx. 50% market share at SFO and SFO’s approx. two-third market share of the total Bay Area market (SFO+OAK+SJC) means we get quite a lot of non-stop and 1-connection service domestically and internationally, but pricing isn’t crazy thanks to usually sufficient competitive pressure.

(The new non-legacy carriers would love to achieve that kind of pricing power, too, at their de facto hubs. Whatever warm fuzzies they might want to advertise, they’re still commercial enterprises interested in making more money if they can.)
John Shea

United will always dominate at SFO as it is a huge domestic and international hub. However, Virgin, and others will do ok if they maintain good competitive service, as United is not always the best choice. People stick with certain airlines because of mileage programs, and destinations.

In the distant past, It was United, then TWA, Western, American, PSA, Hughes Airwest, Air California, Delta, National, Northwest Orient, and Continental in pretty much that order from the 60s and 70s into the early 80s. Then came US Air (before buying PSA ), and Piedmont (also bought by USairways), Eastern, and America West, Southwest and the new carriers of today. Pan Am was sizable and started domestic service in the late 70s after buying National. At one time TWA had about 35 flights a day out of SFO in the 60s and early 70s with nine gates (now used by US airways and Southwest). American expanded over the years, but now has retreated with less flights than 10 years ago of about 32 flights a day or so. Now only 20 to 22 flights a day for American. Virgin will do well, because I hear they are a great carrier.
John

Surprised that first Virgin America and then United have both abandoned SFO, Toronto direct route leaving that market soley to Air Canada. I go to Toronto regularly and find that one airline markets are not price useful to customers. It seems that before United stopped flying the route their flights were usually full. What is the problem with that market ? Toronto is largest City in Canada and one of largest in Eastern time zone. It also speaks to Virgins lack of strategy in selecting routes.
Mara

Given the huge population of the Silicon Valley region (2-3 million), it’s crazy that SJC doesn’t have a larger market share. I wonder what the market share was pre-9/11 (I was one of those Palo Alto residents who used SJC for as much travel as possible, since it was a tad closer. After moving to RWC, SFO was just that much closer — and a lot cheaper since 9/11 and the Virgin Effect — that I’ve rarely used SJC since.)
Simon Allardice (@simonallardice)

I don’t get Virgin America’s strategy, it seems to be one of hope rather than one of substance. They continue to launch on competitive routes in the hope that people will flock to them, then they’re left scratching their heads that they don’t. Every other major carrier has some sort of a monopoly on some of their route network, VX have none. If they were sensible, they’d be on the phone to Delta given Delta’s acquisition of a 49% stake in Virgin Atlantic seeing what the chances of them joining SkyTeam might be if VS choose to do the same. Otherwise, I don’t see VX continuing as a viable option in the long term.