Cleveland, state assessing loss of United hub

Gov. Kasich hopes to convince airlines to reverse decision
Associated Press
Feb 2, 2014

 

State and local officials moved Sunday to assess the loss of 60 percent of United Airlines departures when the carrier drops its money-losing Cleveland hub.

The state of Ohio said it would try to reverse the decision, which will cost 470 jobs.

The loss had been feared at Cleveland Hopkins International Airport since United merged in 2010 with Continental, which had a hub in Cleveland.

The city-owned airport said Sunday it would not comment on the cutbacks announced in a letter from the airline's CEO to United employees.

Cleveland Mayor Frank Jackson's spokeswoman said Sunday the city is assessing the situation and will address the issue Monday.

"We received the information regarding United's announcement on air service reductions. We are reviewing the information and assessing the impact," spokeswoman Maureen Harper said in an email Sunday.

Ed FitzGerald, executive for Cuyahoga County, which includes Cleveland, said Sunday the county would help displaced workers and try to preserve air service.

"We will continue to focus on the future and work with the private sector and other government entities to increase air service to our area," he said in a statement.

Gov. John Kasich said Saturday night that the state would work to have United reconsider the decision.

"Hopefully this situation can be reversed over time and we're going to continue to work with United to try to eventually do that," he said.

"We've already set in motion outreach to the impacted employees and we'll have a team on the ground on Monday to start connecting them with the right state support and benefits."

Joe Roman, president and CEO of the Greater Cleveland Partnership representing the business community, said the group would try to replace the lost service.

"Our goal is to minimize the impact on travelers and to ensure convenient and affordable air service here," he said in a Partnership Web site posting.

"Therefore, we will now mount an aggressive effort to replace as many lost routes as possible."

Airline consultant Michael Boyd told The (Cleveland) Plain Dealer (bit.ly/1gDynI6) that carriers are not expanding in the United States and need fewer airports for connections to other destinations.

"The merger didn't take away the connecting hub, the economics of the airline industry did," he said. Among the bottom line pressures is the cost of jet fuel, Boyd said, that has made 50-seat commuters jets largely unprofitable.

The company's CEO Jeff Smisek said United's daily departures from the city will fall from 199 currently to 72 by June.

"We have no choice, given the level of continued losses we have suffered in Cleveland," the letter said.

United posted a message Sunday to customers and said Cleveland had been helpful in trying to save the hub.

"The city of Cleveland has been incredibly supportive of United and has tirelessly worked with us to try to make the hub profitable," the post said.

"This was an extremely difficult decision, but it is important to note that we will continue to be Cleveland's leading airline, providing great service to our customers."

The cutbacks will be in one-third increments in April, May and June, according to Smisek.

United said in November that it aims to cut $2 billion in annual costs in the coming year by shifting flights, making workers more productive, and improving its maintenance procedures.

Similar cutbacks have affected many other small hubs in cities such as Memphis, Cincinnati and Salt Lake City amid a wave of airline mergers over the last five years.

In June, Delta Air Lines Inc. announced it would be closing its Memphis hub, which it had inherited in its 2008 acquisition of Northwest Airlines. Delta already has a huge hub operation in Atlanta.

 

Comments

donutshopguy

Why did they wait until it was to late to do something? Why weren't concessions discussed and a remedy put in place prior to this notification?

Metalist

They did not wait. Cleveland had a major campaign going to convince United to keep the hub for at least months. I am sure that concessions were discussed. The CEO of the major Cleveland companies were brought on board to pressure United as well.

Realistically, there is not much that Ohio or the City of Cleveland can do. There is no way that United is going to operate a hub this close to their major hub in Chicago. The merger between Continental and United is definitely a United takeover.

From the Grave

Why do I even live in Ohio...

Gardenman

For years Continental and then United was the major airline in Cleveland. With that they controlled fares on so many routes. I fly quite a lot and Cleveland is always higher than surrounding airport again because of the United influence. That is why Akron / Canton airport has grown as it has lower fares. Recently in the past few years Pittsburgh has been much lower than Cleveland and folks have driven there and used that airport.

For me personally I use Detroit Metro and just returned from a flight there 2 days ago. Again it was over a $100 more to fly out of Cleveland and back.

Cleveland Hopkins is not going to be a complete loser here. Continental and now United signed use agreements for many gates at Hopkins because of the number of flights AND to choke off other airlines coming in or expanding service to compete with United. So....now United is stuck with those gate agreements and whether they have the flights or not they will have to pay for those gates till the agreement is up.

My prediction is Southwest / Airtran will add more flights and gates taken from United. Would not surprise me at all that Spirit Airlines comes into Cleveland. They have a hub in Detroit already. They are in Buffalo as well. Alas, Spirit Airlines is the "King" of nickel and dime you on a flight and the main quality they look for in employees is to be cranky all the time you are at work. True !!!

Another airport that has just about closed up due to lack of airlines and of course fliers is Toledo Express. Oh my, that is a ghost town and there of course Detroit Metro is just beating them up. It so close to Toledo and many many flights.

Simple Enough II

You are right about Toledo express for me the extra cost, extra layovers, vs. Just driving to Detroit just worth it. I've used spirit and I was okay with them, I just wanted to get to point a to point b, on time and in one piece, Its not like you are having to ride on a bus in Mexico or Guatemala with chickens in cages, etc. Lol.

donutshopguy

I fly Allegiant Airline out of Toledo to Florida. Great little inexpensive airline that travels from small airports to small airports. Would hate to see it go but you are correct Toledo Airport is a ghost town.

When I fly to New York City I use Akron-Canton Airport. The flights are $800 cheaper than Cleveland. When I fly west I use Detroit for cost and direct flights.

Cleveland is almost always more expensive, with more layovers and less flight choices.

TigerDad

Toledo Express is a ghost town for sure. The Ohio Turnpike Commission basically has an unmanned toll gate at the Airport Highway exit...What happened to all the business that was supposed to come to the west side of Toledo with the new exit? That end of Toledo hasn't changed in 40 years...