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Why United is ending service to JFK

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  1. United Airlines is halting service to New York's JFK Airport.
  2. Instead, transcontinental service to Los Angeles and San Francisco will be offered through the airline's hub at Newark Liberty International Airport.
  3. Service to LA and San Francisco is also being upgraded with international-style amenities for non-coach travelers.
  4. United's old slots at JFK will be taken over by Delta, which operates a hub at JFK.

United's move is all about consolidated operations

Consolidating operations at a single New York–area airport has a pretty compelling business logic. At Newark, United can offer connections to dozens of additional destinations, including smaller East Coast cities and major international centers.

At JFK, United was limited to offering point-to-point service. That placed them in head-to-head competition with smaller carriers like JetBlue as well as with Delta's much larger raft of potential JFK connections. By shifting to Newark, United can build on its existing strength.

Delta, by the same token, will benefit from the ability to add even more flights to its existing JFK hub.

Airlines are learning to compete less

Beyond efficiency considerations, however, the slot swap is also part of a trend whereby airlines are doing less direct competition with one another. This is probably necessary, since the airline industry was comically unprofitable for years, but rebuilding profitability by eliminating competition is a bad trend for consumers.

In this case, for example, part of what's happening is that even though Newark and JFK serve the same metropolitan area, they are still in different places. For residents of northern New Jersey, Newark Airport is much more convenient. Conversely, residents of Long Island find it much easier to get to JFK. By streamlining operations so that United's operations are consolidated in one airport and Delta's in another, both airlines gain a modicum of additional pricing power over suburbanites who have difficulty getting to an airport on the opposite side of New York City.