Less than two months ago, I asked Brian Znotins, VP of Network for United, what the future of Cleveland looked like. He said it had “long been challenged to turn a profit,” but I wasn’t able to get a read on whether the death of the hub was imminent. Turns out, he must have had the plan to chop Cleveland down already in progress. [Edit on 04FEB @ 8pm: United reached out to me to make it clear that no plans were made in any form until January of this year, so it was a quickly-implemented decision.] It’s now official. Cleveland will become the largest NON-hub for United.
United told its employees in Cleveland over the weekend that it would be dramatically downsizing the hub in waves. By the time they finish in June, Cleveland will still see service to 20 cities. That will include the hubs and key business markets like New York/LaGuardia, Washington/National, and Boston. And fear not, Florida-lovers, those prime leisure markets like Tampa, Orlando, and more will still get flights as well. Mainline flights are mostly unchanged but regional flying is slashed.
To most people, this shouldn’t be a surprise. Just as Memphis was to Northwest in the South, Cleveland was Continental’s beachhead into the Midwest. But once it merged with United, the strategic rationale for maintaining a Cleveland hub in the shadow of Chicago disappeared. I should note that this is very different from Charlotte, which while also a mid-size city, provides real network value for American.
After the merger went through, the only real point of a Cleveland hub was if the city could support it with strong local traffic. Otherwise, connections could easily be served over existing hubs. And just about everyone knew it.
Of course, United tried at the time to calm fears by signing a five-year deal to keep the hub intact. But after 2 years, lack of profitability gave United an out. Even without hitting those targets, it wasn’t all that costly for United to walk away. As I said to the Cleveland Plain-Dealer in 2010, “if it doesn’t work, I don’t see this as a deterrent to walking away.” That has turned out to be true, since they’re walking away before the 5 year mark.
There was really only one thing surprising about all this, and it was the rationale given by CEO Jeff Smisek in his letter to the employees.
You would think the right thing to do is just say it the way it is. “We were flying 50-seat RJs around unprofitably and it just didn’t work despite the support everyone in the city provided.” But Smisek tries to deflect the blame on to others. This reminded me of the whole dust-up in Houston where Smisek blamed the city allowing Southwest to build a customs facility at Hobby Airport for United’s shrinkage at Intercontinental. Please.
This time, Smisek blames two groups. First, he says the “demand for hub-level connecting flying through Cleveland simply isn’t there.” Say what? So it wasn’t local demand but rather connecting demand? Something tells me people weren’t saying “heck no, I’ll never connect through Cleveland. Newark and Chicago are WAY easier.” Last time I checked, people look for easy connections with short total travel durations. Sure, some people don’t like regional jets as much, but I find it hard to believe that connecting passengers were what made this hub fail. If that was the case, then the blame can be turned on to the scheduling team for not timing connections well enough.
If that wasn’t enough, he says the timing of the cuts “has been accelerated by industry-wide effects of new federal regulations” that require the airline to reduce regional flying “as several of our regional partners are beginning to have difficulty flying their schedules due to reduced new pilot availability.”
This is exactly what we talked about yesterday, but unfortunately it’s too hard to verify if this is true or not just yet. After all, every airline has seen big cancellations since the new pilot rules went into effect due to the horrible weather we’ve had. So we can’t get a straight read on this yet. We’ll really know if that’s true when we see if United shifts its regional fleet around after the hub is closed.
Most of Cleveland’s flying is done by ExpressJet and I have not heard about any pilot shortages there. (My requests for comment to ExpressJet went unanswered.) But there are a few turboprop flights operated by CommutAir. That airline may very well be having trouble. If we see the Cleveland ExpressJet capacity redeployed into other CommutAir markets to pick up the slack, then this might be valid. But to me, it smells more like an unnecessary blame game. All this did was shift the timing and not change the end result. Is the parting shot at the government really helping anything?
The hub just didn’t work. I think most people can understand that, even if they aren’t happy about it. Cleveland will still have most of its mainline flights and it will have nonstop flights to its biggest markets. While nobody in Cleveland will be happy to see service decline, they should at least by happy to have nonstop flights to the most important destinations… for now
That’s the name of the game for nearly every mid-size hub these days. The writing has been on the wall for awhile.
—
Edit 04FEB 647a: After publication I received this statement from ExpressJet effectively noting that it is not experiencing a shortage.
While the new pilot qualification rules implemented in August 2013, along with the compounding effect of the new FAR117 flight time and rest requirements, have created an increased need for pilots industry-wide, ExpressJet Airlines continues to attract qualified pilots.
73 comments on “United Cuts Its Cleveland Hub, Blames Connecting Passengers and the FAA”
Not *that* long ago, Continental flew Cleveland – London. But I suppose TWA flew St Louis – London as well so that kinda wrecks my argument.
Note to pedants – I do not mean the London in Ontario !
I lived in CLE at the time, and that flight was pretty short lived. But, it was cool for a while to see it as an option from the mistake by the lake!
The issue was that they used an outdated 757 with no personal IFE. Then, bumped the cost well above average and let the flight fail. If the flight was on a competitive aircraft with reasonable rates, it would have worked.
To what extent would location be a factor, there seems to be a “Bermuda triangle” of lost hubs, incl. CLE, CVG, PIT, CMH… maybe there is just no room for a hub between ORD and DTW on one end and the East Coast on the other?
Konstantin – I think location is very important. That’s why Charlotte can work (and, Salt Lake, as mentioned below) while others can’t. When there are better alternatives in bigger cities to serve as hubs, then the smaller ones will be pushed aside.
I’m down here in Houston and I fly UA regularly…I flew CO exclusively…I rarely would see connection options come up via CLE even when I try and force them for mileage run purposes. I would much rather connect via CLE than ORD or EWR. Too bad – but we all saw this coming, Smisek’s word is worthless.
Most Hubs are in Geographically central locations based on that airlines route map and for that reason the big three all have hubs surrounding CLE I just do not see CLE working as a hub for an airline unless it bases its routes around CLE
Actually hubs are in big O/D markets. I’m pretty sure Cranky would bring up the failed mid-America hub in Kansas City(?). Might be mixing up my history but for a hub operation to work the airlines need that high dollar business O/D traffic. Case in point, DTW. Of course Detroit is a joke due to all their problems but it remains a huge O/D market with the auto industry and thus is Delta’s #2 hub. Cleveland just doesn’t have it, even if their claim to fame is “we’re not Detroit.”
A – Exactly right. Specifically to Detroit, the city itself may be broke but the ‘burbs are still full of demand. The whole “wayport” idea of just having a place to transfer people has never worked well, at least not in this country. Dubai, Abu Dhabi, and Doha are trying to prove that it’ll work elsewhere, but that’s also a very different market dynamic.
Do you think UAL will keep non-stop flights from CLE-FNT (Flint)? There were on the turboprops I believe. I live in northern oakland county and see the flights decesending into FNT almost daily in the afternoon.
Not sure how much demand there was/is for those. But Flint has turned into a great mid-size airport.
I would guess those flights might be on the chopping block, that would be a shame as many people like Flint as an alternative to flying into Detroit Metro.
DTWJay – Flint is toast, I’m afraid.
I have a few thoughts about this. First of all I wonder why United decided to place the blame on other things than the actual problem as you mentioned in your post cranky. From the comments I have read from several of the articles. Cleveland is pretty mad about this. And I think if it was explained better, it might have softened the blow a bit. And honestly I’m not so worried about how Expressjet will get through this as I am with Commutair. Since they are a smaller operation without the backing of Skywest. Also I wonder if this will bring down airfares similar to PIT. Of course when PIT was dismantled, it wasn’t being served by any LCC. Which is always why I said that the current fate of PIT wasn’t necessarily a bad thing.
Smisek seems to excel at placing the blame and accepting none himself. And at doubletalk. Why the need to say that Cleveland has lost money for a decade. First of all it’s not credible that management would keep losing money for a decade – that would mean management was derelict. Frankly there are plenty of ways to position accounting records. You can bet that before the merger, Cleveland generated a positive contribution margin for CO, or they wouldn’t have kept it around. It enabled routings and business they couldn’t serve via EWR or IAH, so it made sense for them. Now that the economics on 50-seat RJs have deteriorated AND the new UA also has options to flow traffic via ORD and IAD, CLE isn’t needed in the network, and it’s economics deteriorate. Why not tell it straight? That doesn’t seem to be Smisek’s way.
The problem is that the “new” UA management didn’t know how to use Cleveland properly. ORD is so over capacity and so prone to ATC delays, most domestic east/west itineraries should have been shifted on to CLE. Use ORD for O/D traffic as well as customers connecting to international destinations, but shift domestic transfers to Cleveland. There is no reason a person flying from DCA to SEA should HAVE to connect in ORD; CLE should have been the first, most affordable option presented. CLE has the capacity and is dream to connect in, with nearby gates and a great short underground walkway between terminals. I’ve never heard anyone say, “I prefer a lay over at O’hare.” And yes, putting in some Airbuses and 737’s would make it more appealing, and I’m sure they could be filled if that is the way UA directed them, rather than falling for the “prestige” of ORD. *…
But, how do you suggest shifting 20% of connecting traffic out of ORD. Doesn’t that diminish the value of THAT hub in favour of one that is better for customers when everything runs perfectly? AA saw that in their hub strategy with the rolling connections vs. connection banks. A heavily utilised and properly managed hub is the most effective for the business. Cleveland, unless you put a ton of effort in to it, was never going to be effective regardless of how nice the customer experience was. United is not know for putting much effort in to anything.
Matt – sorry if this is a dumb question, but what are rolling connections and connection banks?
With the new runways in ORD the airport has become much more reliable. ATC delays are rare these days except in cases of extreme weather. Years ago ORD seemed to go on flow a couple of times a week.
The “new management” for United came from CO. They should have known how to use Cleveland if it had more value than ORD. MEM was in the same boat with Delta because ATL was right down the road.
But yet what I find interesting is that MSP and DTW seem to coexist and work for DL.
I would not agree that CLE was a “dream” to connect in. It is a dumpy airport with horrible food options and bad business amenities. I know that O’Hare bashing is popular, but I would far rather connect through ORD.
Phoenix – What you’re proposing is exactly what American was going to do with St Louis when it bought TWA. The plan was to shift connecting traffic over St Louis and optimize Chicago to serve locals. That’s a flawed strategy because those flights over St Louis don’t have enough local traffic to make the hub profitable. It was dismantled very quickly (though it may have lingered longer if not for the tanking economy).
Couldn’t agree more … let’s consolidate traffic in the top two hubs (ORD and EWR) for delays! There is practical value to CLE that United management can’t (won’t) concede. For example, one of the routes being eliminated is CLE to MCI – a route I have been flying for nearly 7 years. Three daily flts 90% full. Eliminate one (or even two) of the 3 daily flights and you will have routinely overbooked flights. Why isn’t this obvious to them?
I was a CO flyer for a couple of years before merger and really enjoyed CLE. I found my co-wokers who were United flyers going through ORD would consistently get delayed due to some issue, either air traffic problems, mainteance or weather. CLE was hardly ever delayed (however when there were problems there were big problems). I spent most of my time flying these small RJs and even the Dash 800s by CommuteAir.
Since merger I try to go as much to CLE as possible to avoid ORD. It is an easy to get around in airport and I’ve found the experience to be mostly pleasant.
I always thought that CLE could be used in a way to take some load of ORD and help with delays that seem to always occur there. Maybe they could have shifted some of the RJs there during the merger and focused more on RJ to RJ flight?
Sounds like CO should have done something about CLE before becoming one with UA. Now it looks like UA is the one closing the hub when it’s the same people who ran CO doing it just under another name.
Before the UA merger, what other option did CO have besides CLE? HOU is too far south, and EWR is a bit too far east, and already had enough business out of it.
It amazes me how an accomplished attorney like Smisek engages in these amateur straw man arguments when it comes to network planning and adjustments. I am sure that the Xjet pilots overwhelming rejection of the concessionary TA has NOTHING do do with this (sarcasm). Just like the GLA post from the other day, it is not a pilot shortage per se, it is a shortage of people willing to fly at a net personal loss. The second part of the ‘explanation’ is even more dubious. In a nutshell: “we have a product that no one wants so we are going to pack it up.”
CLE has been in a decade long sunset so this is no shocker…but I wish UA would come clean to civic leaders and employees. UA is taking a page from the DL playbook and will maintain mainline service to important business and leisure markets, so that should minimize LCC penetration a la CVG.
Smisek is a terrible CEO. He isn’t a leader and fails to inspire his ‘coworkers’. He has created a culture of management against the employees while still pushing the old Continental mantra of “working together”. In his quest to please Wall Street he has completely lost sight of what running a great airline means. If it’s cheap then United will use it despite the problems it may cause.
Remember, regionals can and will be shuffled anywhere they are needed. It’s not that there’s a shortage of pilots working for ExpressJet or in Cleveland, it’s that certain airlines within the United Express brand are having staffing issues and this alleviates that problem. One wonders how this letter will effect pilot negotiations, considering the widespread concessionary pressure that’s been happening lately.
It won’t be long until DL, AA, and WN realize that UA is the weakest mega-carrier. In fact, I think they already know it. The merger of UA and CO has not been well-executed. They need to get it together soon or the others will start attacking (as WN has done in DEN and now in HOU).
Gee, couldn’t see this coming lol…
United is making several changes that don’t really help former-CO fliers like me. I’m looking to switch to Delta. Bah humbug.
I can recognise Smisek, buy who’s the guy in the pink/green shirt saying Cleveland rocks ?
Go watch the Price is Right. ;-)
The last time I watched the Price is Right was as a pre-teen kid in the 1980s
Might be time to watch it again. ;-)
Meh…. I’ll pass… don’t want to let my brain rot more than it has already !
Drew Carey from the Drew Carey Show, Whose Line is it anyway and now the Price is Right
http://www.imdb.com/title/tt0111945/?ref_=ttfc_fc_tt for the Drew Carey Show
http://en.wikipedia.org/wiki/Drew_Carey for his Wikipedia entry
Will we see CLE-LAX remain?
Flights on high CASM regional jets only work with high yield O&D. CLE was basically low-yield connecting pax from the East.
Connecting through ORD is not actually that bad. For the poster above wanting to go DCA-SEA not via ORD, you should be able to use DEN on United or SLC/DTW/MSP on DL to get there. Or the AS nonstop.
@Dale CLE-LAX is staying along with every route to a current UA hub, most of Florida, DFW, ALB, and BOS.
Anybody know why CLE-ALB is staying?
“…writing…on the wall….” Pick a hub, look out! Frankly, airlines these days do what they want to do and the fine citizens of the hub city and the airlines’ customers can just accept it or try to find something better, if they want to really want to try to find something.
I tend to believe that just about all of the people on this blog really care about routings and know that deciding on a route from their origin city to their final destination city ain’t easy. But, I doubt that most travelers give a hoot or know how to figure it. Airlines know this and don’t care what travelers think. They are going to do whatever they want to do and that’s that.
I, and I’m sure most on here care about mainline vs. regional jet. Many of us problably don’t particularly like the little jets, but we have found out that some “operated by” airlines are OK, some, vastly supierior to others. Do we actually communicate our likes and dislikes to the airlines, and do they really care…”we get the cheapest we can find, and you’ll take…!
We’ve learned that some airline hubs are designed pretty darn good for connections, others, not so good; that “minimum connecting times” at some cities are OK…the gates are close; at other cities, they[re joke, because the connecting gates are not in the same counties.
Does the hub have convenient airline lounges/clubs? How about operational congestion? Weather issues? We care, but I doubt that most travelers do.
Therefore, the airlines are going to do whatever they want to do. Does UA care about CLE? Us? I doubt it.
Last year I visited some friends in Richmond, VA. Traveled in May and started comparison shopping in January. Airline dork that I am, I was looking to check off an airport I hadn’t been to before, or at least a new airplane type. Originating in STL, my options were down to CLE, EWR, CVG and PHL in the new airport category.
I figured I would shoot for CLE, with the others as backups. The initial airfares STL-RIC were a bit steep, well over $400 in all cases so I waited. Finally, an Air Fare Watchdog alert sent me a notice for an unadvertised special on UA, available on UA’s website. So I hightailed it to ua.com and checked the flight times.
STL-CLE-RIC was available, but not at the special fares. Those involved ORD, IAD and IAH (of all places) as the connecting airports. Every segment involved United Express. The CLE option was about $50 higher in either direction, cutting a good chunk of the savings off. It seemed to me UA was purposely jacking up CLE fares to discourage connections there, even though it was “on-the-way” as much as ORD or IAD was. (EWR was even higher, the connection times were tight and I’ve heard nightmare stories so that was a no-go for me for that particular trip. Still need to hit New Jersey some day!)
So I booked the STL-CLE-RIC segment and returned via IAD which for some reason had a rock bottom return fare so it was close to the special fare, all-in-all it was just under $300, taxes et al included. Every time I’ve checked UA via CLE they’re priced significantly higher, even if it’s all UA Express.
I’m hardly a conspiracy theorist, but in this case it does seem as if UA was setting up CLE to fail.
Side note: I’ve also noticed until recently, westbound connections via DEN from STL on Southwest tend to be lower than other options. My guess is they were trying to force as much traffic to use DEN to boost volume there. But that’s another topic.
Best wishes to all the CLE/UA employees who will be affected by this.
Hmmm, let me see; CO dba UA saw this coming as long as a decade ago and only now makes this revelation known. How convenient for CO dba UA to time it right ….only 3-4 months ago (before the option closed in October 2013) a $60,000 buyout was offered to customer service agents of whom I’m sure many of the 400+ CSRs subject to furlough would have taken …if only CO dba UA had the foresight to mention it. Now, if they’re lucky, they’ll get offered only part-time on the system (subject to availability) or all the angst of moving lock-stock-barrel from their homes/ lives/ schools/ families). CO dba UA needs to revisit their over-used mantra…..”take care of one another”…..”look after one another”…..”respect one another”…..”were one big happy family” psychobabel.
What convenient timing on the part of CO dba UA. They didn’t know (over a decade) that this was bound to happen ? — Three to four months ago many of those 400+ eligible employees that will be furloughed from CLE could have gotten in on the $60,000 buyout – the offer of which closed in October 2013 ?? These folks will be lucky if they are offered (only) part-time jobs on the system – if they even want to uproot families/ lives/ responsibilities etc.
CO dba UA needs to revisit their over-used mantra — “take care of one another”, “respect one another”, “we are one big happy family” psychobabel B.S. Good luck to coworkers at CLE.
sorry, this is a duplicate if you want to remove it.
Hey Cranky,
Thanks for the insight as always. It seems like the majority hubs are in “tier 1” cities now. To your point about Memphis, Pittsburgh, St. Louis, Cinci, now Cleveland (I’ll even throw in Milwaukee), these are all very compare medium-sized metros. It now appears that the big airlines are looking for favorable connecting infrastructure, as well as significant O&D traffic which appears to be a departure from the past (correct me if I’m mistaken). Looking ahead, are the days of hubs in medium-sized metros gone? Salt Lake seems to be an exception- but it is geographically well positioned and you brought up the point about Charlotte.
bobsmith – Yeah, the old midsize hubs will now just become focus cities. They’ll be bigger than a traditional spoke in that they’ll still be able to maintain service to larger non-hub destinations for now. That may change when low cost carriers come in and crush the fares over time. But Salt Lake and Charlotte are very different in that there aren’t better ways for the airlines there to serve those regions.
bobsmith,
Your last sentence summed it up well. A mid-sized city needs to be very well positioned to maintain hub status. The cities in the Mid West and Mid South that have lost hubs are too close to other larger hubs. Charlotte, although mid-sized, has a large pool of O&D business flyers, and although fairly close to ATL, it is not surrounded by many other hubs. The same can be said for Salt Lake.
My home airport is BWI. We lost US Air as a hub in the early 90’s (I believe), but SWA swooped in and it became a defacto SWA hub. We are not comparable to PIT, CVG, CLE, etc. because, although we are a mid-sized city, we capture a sizable portion of DC area air traffic and draw from a fairly large regional area.
Dismantling of hubs is a natural outcome of legacy carrier consolidation. I would be more surprised if didn’t occur.
Cincinnati continues to be identified by Delta as a hub, a small one, but a hub nonetheless.
Its days as a DL hub are surely numbered…
David:
First, If AA had a hub operation in ATL, CLT would more than likely suffer the same fate as MEM, PIT, CLE, etc. And I may be in the minority, but I think it’ll be interesting to see if CLT will continue to sustain the same number of flights post-merger, with PHL up the road to the north, and MIA down the road to the south. It may take a while, but I predict CLT will diminish over time.
And yes, BWI has picked up tremendously in terms of domestic traffic, but if it weren’t for the ludicrous subsidy Governor O’Nitwit gives BA, they wouldn’t be flying there. It’s tantamount to tying a liver around your kid’s neck to get the cats to play with them. And, on a personal note, I live in Silver Spring, and I’ll take DCA or IAD ANYDAY over the horribly-run BWI and the equally odious WN.
Here’s why I have a problem with this. Business decisions are what they are, and if CLE isn’t profitable as a hub, then it needs to be either right-sized or shut down. According to a Crains Cleveland article in the summer of 2012, UA had this to say about the hub:
“Year over year, (Cleveland Hopkins International Airport’s) performance is better than some other hubs in terms of profitability. The hub is in a far better place than it would have been without the efforts of the team in Cleveland.”
http://www.crainscleveland.com/article/20120625/SUB1/306259974/0/SEARCH
From what I’ve been able to gather, UA is cutting departures from 165 peak day departures to 72 per day, which is the approximate 60% reduction. According to the Plain Dealer article you referenced, the deal UA cut with the Ohio AG included the following terms:
If segment profitability is more than $40 million in the red during the second year, minimum departures in year three can fall to 45 percent of pre-merger strength, or 85 average daily departures. The minimum in years four and five can fall to 14 percent of pre-merger departures, or 26 departures a day.
If United’s Cleveland operations lose more than $40 million in years three or four, then the 14 percent rule applies.
If the Cleveland operations are losing money and more than 25 percent worse than the network as a whole, the deal is called off.
I’m a little fuzzy on whether we’re technically in year 2 or year 3 of the agreement, but if CLE’s performance is really so bad that these clauses are kicking in, that doesn’t exactly reconcile with what UA itself had to say about 18 months ago.
The Crains article also suggests that CLE planned $530 million worth of improvements over 5 years as part of the city’s efforts. Whether that was at the behest of UA, I don’t know, and some if the blame has to fall on CLE, given the history of mid-sized hubs following airline mergers, regardless of what the CEOs promise while they’re trying to keep the states off their backs. But I have real problems with corporations (not just airlines) accepting taxpayer or bond money given with the promise of maintaining a certain level of service, and then going back on it. I hope UA is at least forced to repay that money, along with any other subsidies Cleveland or Ohio have been showering them with.
But most of all, what bothers me most is Smisek’s mealy-mouthed, truth-bending reason for the de-hubbing in the first place. If CLE is sucking wind and needs to be cut, then fine, but be honest with the public about it. It really, REALLY gets under my skin that yet again, he chooses to deflect blame on sources that have a questionable amount of involvement in the decision. I said this in a comment in an earlier story, but one of the major problems with corporate mergers is that CEOs spend countless hours touting the benefits and “synergies” of mergers and make plenty of promises that prove difficult to keep, but say little or nothing to customers or employees about the challenges involved. Smisek and the CO/UA merger were no different in that regard. Those that are knowledgeable about the industry know that things can’t always turn out exactly as planned, but Smisek’s rather cavalier behavior only feeds the negative stereotype that the public at large has about the airlines and mergers. Which unfortunately means the pitchforks will be out in full force, and we’ll have to hear about how those evil airlines have to be re-regulated into submission for the next several months…
MeanMeosh – I think this is an example of “fun with words” here. Cleveland saw better year-over-year improvement in profitability at that time vs the other hubs but it has nothing to do with the base. So if Cleveland had a negative 10 percent margin and improved to 8 percent, that statement would be true if the other hubs had a positive 10 percent margin and improved to 11 percent.
The thing I’ve pondered for a while now, is if United changed how they calculated some numbers so they could justify closing the hub at CLE. Something like, allocating more of the revenue to the Origin and/or Destination, and cutting out the hub, so while CLE was less profitable, so were all the other hubs, but that doesn’t really matter, since they’re just moving money from one bucket to the other one.
I also find it interesting anecdotally (Dr. Jordan) that CLE wasn’t offered as a connection option as frequently as other UA hubs. Seems like UA tried to kill CLE via death by a thousand cuts. (I’m not saying it should’ve survived, but it seems like UA was trying to kill it.)
These are the retained cities at Cleveland: ALB, BWI, BOS, ORD, DFW, DEN, FLL, RSW, IAH, LAS, LAX, MKE, LGA, EWR, MCO, SFO, STL, TPA, IAD, DCA. They will still have RJ flights to these nonhub cities: ALB, BWI, BOS, DFW, MKE, LGA, STL and DCA. Some of the larger nonhub RJ markets losing service are RDU, MCI, BDL, ATL, PHL, CLT, MSP, and BNA. I hope UA is actually basing the retained markets on performance and we don’t just see these remaining ones dropped over the next 12 months anyway.
Cranky,
You hit the proverbial nail on the head — UA’s response and Smisek’s comments following Southwest’s agreement with Houston for a customs facility in HOU are exactly what came to mind when I read Smisek’s justification for the reductions in CLE.
I don’t have a dog in this game as I have been largely avoiding UA for awhile, but Smisek’s apparent inability to communicate without insulting his audience (“changes you will like”) don’t encourage me to fly UA, spend on my co-branded credit card, or to renew it next time the annual $395 fee is charged.
I believe that a Midway style operation might work here and I am crunching the numbers to prove my work.
Not surprised that United has pulled out of Cleveland – or that connecting passengers have been avoiding it. As a former air traffic controller (yes I worked at ORD), there are certain airports I really try to avoid when traveling. O’Hare for one, Newark for another, and also Cleveland, and yes some others. The chances for weather or volume delays are much greater at these airports, and it doesn’t take long for the ripple effect to begin delaying flights. On a day with clear blue skies, O’hare and other busy airports are fairly efficient, but throw in a little weather, some thunderstorms, or snow, etc., and things can go to hell in a handbasket quickly. I remember so many times going to work on the 7AM shift at ORD, and by 7:15 we would be holding at all four arrival fixes — and it usually continued into the evening hours. Not sure what it’s like in Cleveland, but since they’re also in the upper midwest/great lakes area, I suspect weather has often played havoc there as well.
Perhaps United should have thought of this before establishing a hub there. It seems their customers did.
you wonder in next few years with AA/US does that put PHX & PHL on the de-hubbing list? you have to believe JFK/LGA + LAX are high yield O&D driven. SLC must bank with DL as its Mtn West hub. Can DL sustain both DTW & MSP as their #2 & #3 hubs? seems if the hubs are spaced about 2 hrs apart flying, maybe they work; but ORD-CLE & CLE-EWR & CLE-IAD an hour each, forget it.
I can see US/AA de-hubbing JFK, in favor of PHL. LAX vs PHX will be interesting to watch.
David – I’ve written about this extensively, but Phoenix and Philly are both big markets where the new American is number 1. Meanwhile in NY and LA, American is competing with everyone else and isn’t a leader. Just because it’s a large market doesn’t make it a good one. If you can dominate a smaller but better market, then that’s going to work out better.
This discussion reminds me of how far we come in the past quarter century or so. An article in Frequent Flyer Magazine from about 1982 (October, I think) featured medium-sized cities trying to lure major and national carriers to set up mini hubs in order to make up for the loss of service following deregulation. Birmingham, Alabama was mentioned.
Several years later (1986, IIRC), an update to this story noted BHM’s attempt to lure Piedmont Airlines, which apparently showed some interest (in 1982, PI had established a hub at Dayton, Ohio, a city similar in size to Birmingham). Then a year later, PI had bigger fish to fry (DL upgraded CVG into a major hub in December 1986 and AA set up hubs at BNA and RDU) so BHM set its sights on WN.
Of course, this was the era when fuel prices were extremely cheap ($12 a barrel, IIRC) and multiple airlines meant multiple hubs. Perhaps in the not too distant future, fuel prices will decline and well-capitalized new entrants (PeoplExpress, Eastern, etc.) will build hub operations at these second tier cities.
PEOPLE –THE REASON FOR MERGERS IS TO CUT COST AND BE EFFICIENT AND GET RID OF OVERLAP
OF COURSE CLE WAS GOING TO BE CUT IN FAVOUR OF LARGERS CITIES-MARKETS ,LIKE ORD,IAD/DCA,ER–EWR/NYC—-”EVERYONE KNEW IT,WHICH IS WHY THE ATTORNEY GENERAL DID THE AGREEMENT /AS SOON AS THAT AGREEMENT CAME OUT,THERE WAS AN ARTICAL,WHERE WALL-STREET,SAID THIS WAS A JOKE AGREEMENT AND MENTIONED THE OCT12,2012 OPT-OUT LOOPHOLE ,THAT SAID UA COULD DO WHATEVER THEY WANTED WITH CLE AND NOT PAY A $20MILLION DOLLAR FINE/ WALL-STREET CONSULTANTS ADVZED UA TO PAY THE FINE ,AS IT WAS PEANUTS AND THAT THE SAVINGS FROM CUTTING CLE WOULD BE FAR GREATER/ WELL UA PLAYED NICE FOR 3-YRS OF THE AGREEMENT-2011,2012,AND 2013 AND DECIDE IT WAS THE TIME TO UTILIZE THE OPT-OUT LOOPHOLE AND CUT COST IT WAS A MATTER OF TIME / YES MR SMISEK SHOULD COMMUNICATE BETTER ,BUT MANGMNT DOESNT TALK TO US-IT’S EMPLOYEES ANY BETTER
WALLSTREET SAID CVG AND MEM WOULD BE CUT BY THE DL-NW MERGER ,BECAUSE DTW AND ATL ARE BIGGER CITIES AND SO CLOSE / WELL DL PLAYED NICE FOR 5YRS AND THEN CUT MEM AND IS ALMOST DONE AT MY HOMETOWN OF CVG-[I PERSONALY HAVE A FEELING THAT DL WILL FINISH IT CUTTING CVG WITHIN THE NEXT 2YRS ,BECAUSE THEY WANT THE MONEY SAVINGS FOR THEIR NEW HUB AT SEA AND ,YES I AM SAYING IT NOW, TO BUY ALASKA AIRLINES. DL WANTS TO GROW ON THE WEST COAST AND AS IS A GOOD BUY AND FIT FOR THEM.OF COURSE DL PROBABLY IN TIME WILL CUT PDX FOR A SECOND TIME TO CUT COST AND GET SOME MONEY BACK FROM BUYING-[A HOSTILE TAKEOVER MOST LIKLEY] ALASKA AND COULD BE IN UA’S FAVOUR BY UA THEN BUYING PDX AS A HUB FROM DL AND THE TWO KEEPING THE NEW AA OUT OF THE PACIFIC NORTHWEST MARKET]
CF ,I DISAGREE WITH YOU ABOUT THE NEW AA LEAVING JFK/NYC AS A HUB IN FAVOUR OF PHL–NYC IS A MUCH BIGGER IMPORTANT MARKET AND AA ,WITHIN THE PAST 5 OR 4YRS , SPENT 3BILLION ON A NEW TERMINAL AT JFK./ I DONT THINK THEY WILL GIVE IT UP FOR PHL AND PHX IS NICE BUT CANNOT COMPARE TO THEIR LAX AND DFW HUBS. I SPOKE TO ONE AA EMPLOYEE,WHO SAID THEY COULD ALREADY SEE PHX STARTING TO SHRINK…../ YES CLT IS SAFE BECAUSE IT IS WELL SPACED BETWEEN MIA AND DCA
SOUTHWEST WILL MAY WELL COME IN AND TAKE UP SOME OF THE CITIES THAT WERE CUT, IF IF FRONTIER AND JETBLUE MERGE,AS THEY SHOULD-[SAME FLEET TYPE AND AND THEN HAVE DEN AND JFK HUBS],THEY ALSO COULD TAKE UP SOME OF THE MARKETS CUT AND ANOTHER GOOD FIT IS ALLEGENT AND SPIRIT MERGER/ THERE THEN COULD BE 3 BIG LCC CARRIERS ,ALTHOUGH IT SEEMS SOUTHWETS’S COST IS GOING UP ALL THE TIME
AA,DL,AND UA NEED TO GET EVEN MORE LARGER 70-90 SEAT ONLY RJS AND CAP RJS AT THAT-70 AND 90 SEAT ONLY RJ /
I just wonder why all big 3 -aa,dl,ua do not order the boeing next-generation B737-600s and the B737-700s and the Boeing next generation max of those planes . ALL of them are more full-saving and perfect for the MID-WEST FLYING cities,ESPECIALY AT IMPORTANT BUSINESS FLYING TIMES OF 7AM-9AM AND 5PM-7PM. The other off times are good for the larger 70-90 seat RJs . I know UA has 70 of the 70-75 seat RJs coming this yr and continue and getting the B737-900 next-gen and MAX ,but needs to order the B737-600,700,and 800 MAXES of those plane types also
LASTLY I wish the EVIL REPBUBLICANS would allow investment and infestructure of HIGH-SPEED RAIL-TRAIN now ,to have as an alternative to flying. Europe and Asia have both high-speed rail and airlines
THANKYOU
Robert,an United-[pre-merger employee, from Cincinnati]
CF, don’t let Expressjet fool you. They may not be having as much difficulty filling their pilot ranks as other regionals, but every regional is having problems. I’m a captain at a small regional airline and I received an e-mail from Expressjet in response to an application I filled out in early 2011. I had about 500 hours back then and in 2011 those were laughable qualifications at Expressjet.
Here’s the e-mail they sent me last week:
“Dear G,
Thanks for your interest in ExpressJet Airlines the largest regional airlines in the world with over 4500 pilots and 420 jet aircraft serving 42 states and several foreign countries.
Your flight time needs to increase before we can consider you for an interview. In August of 2013 a new law went into effect requiring all pilots flying for a FAR 121 carrier to have an ATP ratings. Because of this, we request you continue to build your flight time as quickly and safely as possible. Due to credit allowed in 61.159 (a) (6) we can actually place you in a new hire class with 1450 hours for the normal ATP or 950 hours for the academic Restricted ATP.
If you have any questions send me an email or give me a call. If you are no longer interested in ExpressJet please send me a quick email and I’ll remove you from our database.
Send me an email as soon as you are within 6 months of acquiring the hours required for the ATP and we’ll review your application for a possible interview.
(Captain retired)”
I think they’re starting to get desperate if they’re looking at applications submitted almost 3 years ago.
Ohio is taking a beating… first Delta wipes our Cincinnati, Now United takes down Cleveland…
Hey, Ohio has only lost one hub airport. CVG is in Kentucky. :-p
I scanned comments for this information and apologize if I missed the reference, but what is the plan to charge United the $20 million in damages which they are contractually bound to pay by virtue of pulling out in 2014 instead of September, 2015? (Pls reference Crain’s Cleveland Business, September 13, 2010). Who will receive the funds? The State of Ohio? Cleveland? Displaced workers? Or are the media, and the legislature, and United, all hoping that we forgot about this? Thank you for your time.
Robin – I haven’t seen anything saying that United has agreed to pay this or that it will be held to it. I’m sure the lawyers are all reviewing the contracts now to figure out how to settle.