United Cuts Its Cleveland Hub, Blames Connecting Passengers and the FAA

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 Cuts Cleveland

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.

Get Posts via Email When They Go Live or in a Weekly Digest

Leave a Reply

73 Comments on "United Cuts Its Cleveland Hub, Blames Connecting Passengers and the FAA"

avatar
Sort by:   newest | oldest | most voted
trackback

[…] Less than two months ago, I asked Brian Znotins, VP of Network for United, what the future of Cleveland looked … Read More […]

David
Guest

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 !

Hunter
Guest

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!

Z
Guest

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.

Konstantin
Guest

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?

Dr. Jordan
Guest

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.

Red
Member

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

A
Guest

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.”

DTWJay
Guest

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.

JRS
Guest

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.

Pilotaaron1
Guest
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… Read more »
Carl
Member
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.… Read more »
Phoenix
Guest
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… Read more »
Matt
Guest
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.
PB
Guest

Matt – sorry if this is a dumb question, but what are rolling connections and connection banks?

mattnrsa
Member

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.

Juan
Guest

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.

pilotaaron1
Guest

But yet what I find interesting is that MSP and DTW seem to coexist and work for DL.

CP
Guest

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.

Truhe
Guest

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?

Jonathan
Guest
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… Read more »
David SF eastbay
Member

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.

Nick Barnard
Member

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.

Eric A.
Member
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… Read more »
Sean McCue
Guest

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.

Eric C
Guest

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.

1js7371
Member

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).

frankgaron
Member

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.

David
Guest

I can recognise Smisek, buy who’s the guy in the pink/green shirt saying Cleveland rocks ?

Nick Barnard
Member

Go watch the Price is Right. ;-)

David
Guest

The last time I watched the Price is Right was as a pre-teen kid in the 1980s

Nick Barnard
Member

Might be time to watch it again. ;-)

David
Guest

Meh…. I’ll pass… don’t want to let my brain rot more than it has already !

Jonathan
Guest

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

Dale
Guest

Will we see CLE-LAX remain?

Sanjeev M
Guest

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?

jaybru
Member
“…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… Read more »
ChuckMO
Guest
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… Read more »
Retired
Guest
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… Read more »
Retired
Guest
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”,… Read more »
Retired
Guest

sorry, this is a duplicate if you want to remove it.

bobsmith
Guest
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… Read more »
davidp627
Member
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… Read more »
DL
Guest

Cincinnati continues to be identified by Delta as a hub, a small one, but a hub nonetheless.

davidp627
Member

Its days as a DL hub are surely numbered…

DCBuckeye
Guest
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… Read more »
MeanMeosh
Guest
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… Read more »
Dale (a different one)
Guest
Dale (a different one)

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.

trackback

[…] Cranky Flier had an insightful article on “United Cuts Its Cleveland Hub, Blames Connecting Passengers and the FAA“. […]

Hua
Guest

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.

Joel Azumah
Guest

I believe that a Midway style operation might work here and I am crunching the numbers to prove my work.

floridavet
Guest
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,… Read more »
David
Guest

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.

Stephen
Guest

I can see US/AA de-hubbing JFK, in favor of PHL. LAX vs PHX will be interesting to watch.

David P. Jordan
Guest
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… Read more »
robert.rolwing
Member
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… Read more »
trackback

[…] United has announced the de-hubbing of Cleveland. No surprise, but it still hurts them. […]

gdubya3
Member
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… Read more »
Tim
Guest

Ohio is taking a beating… first Delta wipes our Cincinnati, Now United takes down Cleveland…

Nick Barnard
Member

Hey, Ohio has only lost one hub airport. CVG is in Kentucky. :-p

trackback

[…] didn’t take long. Just last week United announced it would dismantle its Cleveland hub, but now others are already starting to move in. Specifically, we see both Frontier and Delta […]

trackback

[…] United cuts Cleveland hub, blames joining passengers and FAA (The Cranky […]

Robin
Guest

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.

wpDiscuz