United Airlines drops Cleveland as hub airport

[Kngkyle]

As predicted following the merger, United is finally pulling the plug on Cleveland.

Some quotes from CEO Smisek:

"Our hub in Cleveland hasn’t been profitable for over a decade, and has generated tens of millions of dollars of annual losses in recent years. We simply cannot continue to bear these losses."

"As a result, we will be reducing our average daily departures from Cleveland by around 60%."

"...expect a reduction in force affecting up to 430 airport operations positions and approximately 40 catering personnel in Cleveland."

ORD, EWR, and IAD could benefit from this and see some added flights to pick up what was left of the connecting passengers at Cleveland.

http://www.seattlepi.com/business/ar...rt-5196791.php

[202_Cyclist]

Kngkyle:

ORD, EWR, and IAD could benefit from this and see some added flights to pick up what was left of the connecting passengers at Cleveland.

Newark doesn't have much room for growth but Dulles has plenty of extra capacity and O'Hare can accommodate more flights.

[InTheBurbs]

Not surprising, but still disappointing. Cleveland was a much easier airport to connect through than Dulles or O'Hare. And infinitely better than going through Newark.

[Vlajos]

I read that this morning. Ten years of losses is pretty bad.

[AaronPGH]

Originally Posted by InTheBurbs

Not surprising, but still disappointing. Cleveland was a much easier airport to connect through than Dulles or O'Hare. And infinitely better than going through Newark.

As was the case with almost all of the second-tier dismantled hubs. The state of the flying experience in the US is pretty awful these days.

[tdawg]

I connected through Hopkins a few times, it's a very nice airport.

[OhioGuy]

Cleveland is the only United (or Continental) hub I've never used (not counting their international hubs). I guess I missed my chance.

[Dr Nevergold]

My opinion? This is just a continuation of the cheapening and worsening of air travel quality across America. Considering American and US Airways' merger, you will likely see the end of another major hub, such as Phoenix, as the US industry consolidates into only a handful of hubs that all traffic routes through nationwide.

The better quality afforded by having several extra hubs around the nation, lessening traffic at already over-burdened mega hubs, is a thing of the past.

In so far as profitability, airlines choose where they send passengers since its so hub focused, so I'm skeptical of the airline that says its "not profitable" when the capacity is sent elsewhere.

[Wizened Variations]

There are too many large airports close to Cleveland.

Indianapolis is highly regarded per J.D. Powers as the best small airport in the US
More importantly Detroit-Metropolitan is rated as the best large airport in the US.

Pittsburgh is under used, particularly since US Airways abandoned the airport as a hub.

None of the three lie in a snow belt.

http://www.businessinsider.com/the-1...ca-2010-2?op=1

[Dr Nevergold]

Originally Posted by Wizened Variations

There are too many large airports close to Cleveland.

Indianapolis is highly regarded per J.D. Powers as the best small airport in the US
More importantly Detroit-Metropolitan is rated as the best large airport in the US.

Pittsburgh is under used, particularly since US Airways abandoned the airport as a hub.

None of the three lie in a snow belt.

http://www.businessinsider.com/the-1...ca-2010-2?op=1

Detroit is the only large airport that is used as a hub in the entire region now. If Delta decides to abandon Minneapolis, there will be only two hubs in the entire northern interior of the nation, Chicago and Detroit.

I think the fact that so many airports with lots of capacity that aren't being utilized as a hub is the bigger issue. There are so many flights being sent to a handful of airports, increasing misery for travelers.

In so far as weather is concerned, Cleveland was the last airport being used as a hub, close to the east coast and midwest population centers, that could offload traffic from Detroit and Chicago specifically (and hub-wise, offload from Chicago and Newark which both have huge delays at times). Cleveland was an infinitely more pleasant experience as I've connected through all three airports at one point or another in the past few years.

Also, in the coming years American-US Airways will be looking to close one of its hubs as well. There's been chatter for a long time which present day hub will get cut, is it going to be Phoenix? Is it going to be Philadelphia? Could it possibly be Charlotte? Who knows. Phoenix is rumored to be the most likely candidate, its close to LA in a sparsely populated area. Closing Phoenix will, as closing Cleveland does, create more misery for passengers who have no choice but to connect through only the largest, most hectic hubs.

The only hope for increasing passenger comfort is for competition to come in and take the capacity at these airports and maybe build a brand. Its expensive, and its risky, but Virgin America will never become a major player here unless it gets settled in the east. Now may be the chance for an airline like Virgin or JetBlue or Frontier to sweep up gates at one of these hub airports in the region and see if they can compete and bring better service to customers and grow their business with a hub they control on their own without other players.

EDIT: Then again, and I completely forgot to mention this, what would really avoid the continual decline of the airline industry is a ramping up of high speed rail. Maybe all the old airport hubs should be shut down in favor of a comprehensive high speed rail system that gets you from New York to Buffalo in 3 hours, or Nashville to Chicago in 3 1/2 hours (which is entirely possible if the train averages only 125 mph the entire trip). Rail could replace a lot of local commuter flights in the east and provide better service.

I just took Amtrak back from NY to Buffalo this past Sunday, it was 7 hrs 45 mins, and while the trip was easy and I'd do it again in a heartbeat, its far more time than it should take. High speed rail could be a game changer, however.

[mthd]

imo, the spoke and hub concept doesn't really work unless the hubs are significant. i'd much rather fly through a large airport than a small one, assuming they're both well run and built. e.g., it wouldn't make sense to consider portland a hub instead of san francisco. i think the same applies to cleveland and detroit.

it does seem like DTW is a little far north, but draw a line from any reasonably large city in the midwest to any other reasonably large city far enough away to fly, and you don't have to bend the line all too much to go through chicago, detroit, atlanta, or denver. add st louis and it's really hard to see the value of more hubs in that part of the country. obviously, the travelling public doesn't either if united has been losing money for 10 years.

[Dr Nevergold]

Originally Posted by mthd

imo, the spoke and hub concept doesn't really work unless the hubs are significant. i'd much rather fly through a large airport than a small one, assuming they're both well run and built. e.g., it wouldn't make sense to consider portland a hub instead of san francisco. i think the same applies to cleveland and detroit.

it does seem like DTW is a little far north, but draw a line from any reasonably large city in the midwest to any other reasonably large city far enough away to fly, and you don't have to bend the line all too much to go through chicago, detroit, atlanta, or denver. add st louis and it's really hard to see the value of more hubs in that part of the country. obviously, the travelling public doesn't either if united has been losing money for 10 years.

St Louis hasn't been a hub for a long time. Only one problem with the concept of going to only one mega-hub to go anywhere in the world, you're only flying to one city at any given time. The congestion isn't necessary, all it provides is bragging rights. United could easily pick and choose the flight plans that work, and take 200 flights a day that usually go through Newark or Chicago - two airports notorious for their congestion - and start funneling those profitable connections to Cleveland. Chicago and Newark aren't going to lack profitability anytime soon.

But really I think the airline industry in the US may be in a perpetual state of decline, its nearly impossible for upstarts and smaller carriers to compete against the big boys. They don't have the resources. High speed rail is increasingly looking like an option that may be able to compete (if given the funding and chance) for commuter flights (in terms of increasing quality). Just imagine, would you rather fly in a stuffy commuter jet like the Embraer or CRJ's that you can barely stand up in, connect for a few hours, then head to your destination, or would you rather sit on a large, comfortable, easily accessible train that can average 125mph for the whole trip? High speed rail could seriously compete for these shorter haul flights in commuter jets.

That's another discussion for another topic to extrapolate on, but Cleveland is obviously a goner. I don't know of any other airline that will come in to makeup for the former Continental/United hub loss. And the brand new commuter concourse D that opened in 1999 will likely be abandoned. Southwest airlines is commonly touted as an airline most people want to come in after a hub loss, but it doesn't provide international service anymore, and its prices are increasingly similar to the rest of the industry less baggage fees. The only de-hubbed airport that I know of that truly has recovered using Southwest as its model is Nashville International. American airlines opened a hub in the 80's, barely 10 years later de-hubbed it in the 90's, then Southwest came in and created a "focus city" operation and the airport now consistently has 10 million passengers a year, which is what its mid sized hub used to operate at.

Pittsburgh is still struggling and half its terminal is terminally empty.

Just think of all the de-hubbed airports since the 90's in the midwest and upper south markets:

Nashville, Raleigh, Kansas City, St Louis, Pittsburgh, Cincinnati, Milwaukee (which was lost when Midwest airlines was absorbed by Frontier), Memphis, and now Cleveland.

That's an awful lot of lost capacity (9 airports de-hubbed) in a relatively short period, only Nashville and Kansas City have become focus cities with Southwest to fill in the gaps.

[202_Cyclist]

Originally Posted by mthd

imo, the spoke and hub concept doesn't really work unless the hubs are significant. i'd much rather fly through a large airport than a small one, assuming they're both well run and built. e.g., it wouldn't make sense to consider portland a hub instead of san francisco. i think the same applies to cleveland and detroit.

it does seem like DTW is a little far north, but draw a line from any reasonably large city in the midwest to any other reasonably large city far enough away to fly, and you don't have to bend the line all too much to go through chicago, detroit, atlanta, or denver. add st louis and it's really hard to see the value of more hubs in that part of the country. obviously, the travelling public doesn't either if united has been losing money for 10 years.

Saint Louis isn't a hub. Also, you need a decent-sized origin and destination population for have a viable hub (although Seattle and Denver are successful hubs at medium-size cities).

Denver serves mountain west destinations, Atlanta serves East Coast, Southeast, and international destinations, and Chicago is such a large market, it has connecting flights nationwide and many international destinations. These all seem like distinct markets to me.

The hub & spoke system works just fine. Yes you have to connect but it allows for far more frequencies, at lower ticket prices than if you just have point-to-point. Does anyone think you would have Boise - O'Hare service three or four times per day if it wasn't for the connecting passengers at O'Hare?

[Dr Nevergold]

^The discussion as I see it isn't point to point vs hub so much as its do we want the poor quality that goes along with virtually everyone being sent through just a handful of mega-hubs nationwide, or do we want a system where there are the usual mega-hubs and a few other hubs here and there to offset the insane traffic counts they service, in order to increase quality and capacity?

Lets face it: Chicago, Newark, Atlanta - these are hubs that aren't going anywhere. They're mega-hubs. They service large population centers. You can take flights and passengers away from them and they'll be profitable, successful airports.

Our airline industry arguably had too much competition in the 1990's: prices were insanely low, capacity was so high that flights commonly went unfilled, and you had incredible rates of bankruptcy. There were some years in the late 90's and early 00's where several airline bankruptcies would occur in a single year.

We're on the other end of that see-saw right now: too much consolidation, not enough capacity leading to poor quality of service, congestion that includes safety concerns as flights have near-hits in Chicago and other mega-hubs that could use some relief from their insane traffic loads.

And in regards to American/US Air and Phoenix with LA, I would hate to see Phoenix's hub diminished in favor of LA. LA is a fantastic airport, but it doesn't need increased traffic at a high rate. It is America's second largest market, it has plenty demand, and it'll be a hub with or without Phoenix's existence.

Phoenix is the airport on the watch list now, another hub that doesn't need to be de-hubbed, but may very well be.

[202_Cyclist]

I was watching a Congressional hearing regarding the US Airways-American merger about a year heard a half ago and Cliff Winston from Brookings said that the airlines are still correcting from the distortions of the regulated pre-1978 era with the latest round of mergers. As you mentioned, there was too much capacity and I would argue to many hubs in the system before.

[202_Cyclist]

And in regards to American/US Air and Phoenix with LA, I would hate to see Phoenix's hub diminished in favor of LA. LA is a fantastic airport, but it doesn't need increased traffic at a high rate. It is America's second largest market, it has plenty demand, and it'll be a hub with or without Phoenix's existence.

Phoenix is the airport on the watch list now, another hub that doesn't need to be de-hubbed, but may very well be.

I think either Charlotte or Philadelphia are vulnerable. On the east coast, you have Miami, Charlotte, DCA, and Philadelphia. With the Charlotte, DCA, and Philadelphia, that is a lot of capacity in the mid-Atlantic. Of course, DCA ridiculous perimeter rule limits options somewhat at that airport and the combined US Airways-American recently had to give up slots at Reagan.

[Dr Nevergold]

We're too far removed from the era of regulation for it to matter in my opinion. The super cheap oil prices in the 1990's are a bigger factor of why there were so many upstarts vs today as much as anything relating that far back. That, plus 9/11 introduced a lot of psychological damage for investors wanting to risk money for upstarts in this industry in the past decade.

And here is where I start comparing with Europe, because European air travel is as cheap as its ever been. Thanks to numerous cheap airliners: RyanAir, EasyJet, flybe, or [insert literally a dozen more companies here] you can take flights to and from destinations all across Europe for well under $100 USD one way, including baggage fees. Only a handful of round trip US flights, including baggage, can be had for $150-175 these days.

Europe has dealt with an equal amount of oil price increases (in fact, there is more upward pressure on the price there), they have a very competitive and healthy high speed rail system, and STILL you can catch a cheap flight to most European locations with these cheap airliners (I've flown both RyanAir and Easy Jet, and yes they are CHEAP in every sense of the word, but its good for competition).

I think the problem in the US is the lack of competition. There are literally only American/US, United, and Delta as the traditional old airliners. 3 airliners (the only ones to have a large nationwide network) for a population of 320 million is an oligopoly. Southwest is slowly becoming a mainstream airline, minus international service, but absolutely none of the cheaper upstarts like JetBlue have a large enough network to truly compete nationwide and bring down prices.

I don't have the answers, I just have questions and comparisons to be made. If Europe can face the same oil price shocks and you can get from/to most major markets for under $200 USD including baggage, then the US is doing something wrong.

...and we don't even have high speed rail to compete with this industry.

And if you want a comparison, I flew RyanAir from London to Berlin for $86 USD including my baggage fee. I flew EasyJet from Berlin to Paris for $82 USD in fall of 2012. These are cities that are roughly 570/540 miles apart respectively, which is similar to short haul flights to eastern US cities.

Similar flights in the US? Many go for $350-450 in the eastern US. You find some locations, like Buffalo-Charlotte or Buffalo-Boston that are incredibly cheap, but most flights are indeed expensive here. We have no competition.

[202_Cyclist]

Good analysis. Another issue in the 1990s is that the aircraft manufacturers too often pushed carriers to take new aircraft orders with cheap financing, leading to excess capacity.

I absolutely agree that Southwest is no longer a low-cost carrier. Something like 1/4 to 1/3 of their passengers now are connecting passengers and BWI and Midway are big hubs.

Frontier is a carrier to keep an eye on. They have been expanding pretty successfully at Trenton-Mercer and Wilmington this past year, much like the previous Southwest strategy of using secondary airports.

[Dr Nevergold]

Well, there has to be change in America soon.

I think we desperately need a high speed rail network to begin with - yes another topic, but its intertwined with this issue in some ways. Our wonderful Tea Party Congress has done its best to destroy the plans introduced by the Obama administration that would have created this wonderful option to compete.

But beyond that, we need an airline - like Frontier or Virgin - to open up a true hub in the east (not just connecting a few flights in the east to Denver, LA, and SF) and starts connecting to smaller cities to give the big 3 (plus Southwest) real competition.

RyanAir and EasyJet over in Europe are profitable enterprises. I don't agree with how RyanAir in particular handles its workers, but there are lessons to be learned.

Europe has much higher worker standards and union protection laws, Europe has higher fuel prices. Yet they are selling tickets, round trip, with baggage that total less than $200 for most of their flights to points all across Europe and can profit, and they compete against big traditional airliners like Air France or British Airways or KLM, etc.

The United States is simply doing things wrong. We need more competition (and more rail services). But hey, we can brag about having airports that get 60-90 million passengers a year, right? LOL

The joke is on all passengers that deal with our worsening transit system.

[Steely Dan]

Originally Posted by Dr Nevergold

The only de-hubbed airport that I know of that truly has recovered using Southwest as its model is Nashville International.

midway airport too.

the time-scale is longer, but MDW was de-hubbed back in the 60s when united and american abandoned it for the then brand new ORD. it then languished in relative obscurity for many decades before coming back to full strength as southwest's largest hub (southwest calls it a "focus city", but come on, with roughly 250 daily departures, it's a freaking hub if there ever was one). today, thanks to southwest, MDW is now as busy as it was back in its glory days as a hub for united and american.