Where The U.S. Airlines Fit On A Traditional Monopoly Game Board

The U.S. airlines have been in an almost continuous state of evolution since the industry was deregulated in late 1978. Start-ups, mergers, and failures have produced an industry that is reaching a new normal following the disaster of the pandemic. When one of the big U.S. airlines has an operational mess-up, like Southwest did at Christmas, it makes national news and the federal government gets involved. The industry is now over-dependent on four airlines that collectively carry over 60% of all domestic passengers, and 80% if you include U.S.passengers flying internationally.

This reminded me of the iconic board game, Monopoly. In that game, players invest in real estate and utilities to block others and make the most money. I thought it would be fun to see how the U.S. airlines would map to the traditional board, meaning how valuable the holding of each airline or sector holds today. I hope this to be a good thought starter for those who think about real competition.

Delta Owns The Yellows And Greens With Hotels

Delta has about a 15% share of all U.S. domestic traffic, placing in-between American and United. But Delta also has a greater share of the traffic in the markets they control, and they do this better than their competitors. So, giving them the yellows and greens gives them the two highest-valued, three-property locations. Both the yellow and green landing probability increases because of the cards as well. Players who can monopolize both of these colors tend to do well in the game.

Delta also owns hotels on all six properties. This makes it especially penalizing if a competitor lands there, but equates to their strong S-curve position in Atlanta, Detroit, Minneapolis, New York, and Seattle. S-curve refers to the fact that among business travelers, those with 60% or more seat share tend to win close to 100% of the business travelers. That is because of the scope and depth they can serve, which in all these Delta cases are far ahead of the number two in each market.

American Owns The Reds, Oranges, And The Light Blues

American carries the most domestic traffic at close to 20%. During the pandemic, they took advantage of this by keeping relative capacity higher than most, as the U.S. recovered more quickly than international markets. By mapping them to the reds, oranges, and light blues it gives them the most real estate, but the value is not quite as high as Delta’s. If you had to be more specific, domestically Charlotte would be the reds, a good set of properties, again with some card support. Dallas would be the oranges, a big city but with a large Southwest operation at nearby Love Field that keeps domestic prices in check. Miami, domestically, is at best the light blues since nearby Fort Lauderdale is home to all the low fares serving south Florida. JetBlue’s Mint product has brought more competition to the transcontinental business traffic from South Florida, too.

Just these two airlines have already taken up a lot of the board. American has hotels on the reds, aligning with their strong Charlotte schedule presence, and three houses on each of the light blue and orange properties. This is because of the low-cost competition they face in two of their big hubs, something Delta has managed to largely avoid.

United Owns The Light Purples, Boardwalk & Park Place, And Free Parking

Among the big four U.S. airlines, United has the smallest share of domestic travelers at just over 12%. But they also operate a big hub at Newark airport, which gives them access to a huge pool of traffic for both business and leisure. That’s why they get the light purples, the first set of properties on the second side of the board from the Go space. But they also get two of the most valuable pair of properties on the board, the dark blues of Boardwalk and Park place. With only two properties versus three for most others, this reduces their landing probabilities but there is the famous “take a walk on the boardwalk” card that can cause cheers or grimaces when drawn. When my son and I play the “draft hubs” game, Newark is almost always the number one pick.

Free Parking is a space that in the original rules means nothing happens, and in the real game no one can actually own this space. But a popular variation is to put fees not paid to another player on this space, and the person that stops there collects those. Recognizing that some will play the game this way, giving this space to United matches their tough position in Denver and questionable hub at Washington’s Dulles airport. At times these positions undoubtedly pay off for United, while in others they may not come close to covering their cost of capital. Free Parking makes sense is this way.

Southwest Owns All Four Railroads Plus Waterworks

Southwest has a larger domestic market share than everyone except American. Carrying almost 18% of all U.S. traffic, they have only recently expanded to nearby international destinations. International flying wasn’t considered seriously at Southwest until they purchased Airtran in 2011. Their high frequency and reliable service between many cities makes them popular for families and small business travelers. The railroads on the monopoly board are the only properties on each of all four sides, and are bolstered with the “take a ride on the Reading” card. They also double in value when owing all four, something that is hard to do in the game but Southwest has effectively done this in the U.S.

Added to the railroads they get Waterworks, too. One of two utilities on the board, Waterworks is a low-cost investment that pays repeatedly through the game. You can’t win with only Waterworks, but when added to all four railroads it creates a powerful competitor that is a threat in all geographies (and all sides of the board) .

The Low-Cost Airlines Own The Dark Purples, The Electric Company, And The Jail

Every other full-size jet passenger airline in the U.S., meaning Alaska, JetBlue, Frontier, Spirit, Sun Country, Allegiant, Breeze, and Avelo, fight for the dark purples of Mediterranean & Baltic and the Electric Company. The cheapest properties on the board, the dark purples aren’t expensive to buy or develop but don’t deliver enough consistently profitable returns to keep a player competitive. Added to these are the Electric Company, the second utility in the game. Like Waterworks, it helps to have this but it is better to own both if you can. Carrying collectively under 40% of all traffic in the U.S., with no carrier anywhere close to even 10%, no single one of these airlines can effectively fight with the real estate heft of the big four.

The jail space closes out the low-cost carrier’s holdings. While in the actual game no one can own the jail, it represents the fact that these carriers are often precluded from, or jailed off, from the real estate needed to be truly competitive against their much larger competitors.

The Remaining Spaces And Final Thoughts

The other spaces on the board, like the Chance and Community Chest cards, Luxury Tax, and Income Tax spaces are owned by the U.S. government. They tax the industry in multiple ways, including excise taxes on fuel and tickets, standard corporate and payroll taxes, and fees added to each ticket to cover security at airports. They also create policies to ostensibly improve competition and improve customer service, thus the random card draws make sense for this.

This mapping considered only domestic U.S. travel. If you added in the sometimes extensive international networks of the U.S.carriers, you would get a very different look. United would get relatively larger while American would get relatively smaller. The big four would come close to 80% of all U.S. based traffic. The low-cost airlines would be limited to just close-in international spots like Mexico, the Caribbean, and Northern South America and thus would fall further behind.