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Letter from Jeff Smisek: United to Reduce Flying from Cleveland

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Read a letter from Jeff Smisek to UA employees here: From: JeffSmisek Sent: Saturday, February 01, 2014 4:39:31 PM (UTC-05:00) Eastern Time (US & Canada) Subject: United to Reduce Flying from Cleveland Dear Cleveland co-worker: I want to let you know that we have made the difficult decision to substantially reduce our flying from Cleveland. We will make this reduction in stages beginning in April. (www.opshots.net) More...

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aeroplanepics0112
Cole Goldberg 3
I believe that there were earlier claims that the hub was profitable.
PhotoFinish
PhotoFinish 3
I just read an article from the pre-merger days in which civic leaders were shown the books, which apparently showed a comfortably profitable operation. The conclusion is that the airline would never need to exercise their profitability clause in their hub agreement with the city/state.

It was a guaranteed 2 years, with years 3-5 depending on the profitability of Cleveland, as compared to all other United hubs.

With the cost of fuel, and the earlier 50-seat limit on regional planes, hubs with the least amount of mainline flying will easily be among the least profitable with little effort.

This accelerated schedule has more to do with the pilot shortage that is already starting to show at the regional level. Rather than trim all their regional flights at all hubs across the entire network, it made the most sense to dehub Ckeavland and use the displaced resources to keep their other hubs stronger.
PhotoFinish
PhotoFinish 1
This isn't the article that I reference above, but us fri. ThR sane paper and gives a great background on the hub agreement back in 2010, and compares to some other hub merger agreements.

http://www.cleveland.com/business/index.ssf/2010/11/deal_to_retain_united-continen.html
PhotoFinish
PhotoFinish 1
* but is from the same newspaper
aeroplanepics0112
Cole Goldberg 1
Interesting article. The airline still plans to keep its domicile here however.
PhotoFinish
PhotoFinish 2
The FTB article opens with, "In a letter to employees, United Airlines said it will substantially reduce flying from Cleveland and no longer offer flights that allow fliers to connect through Cleveland to other destinations."

But the actual letter states:

"Together, this will reduce our capacity (available seat miles) out of Cleveland by around 36%."

"When the schedule reductions are fully implemented in June, we plan to offer 72 peak-day flights from Cleveland, and serve 20 destinations from Cleveland on a non-stop basis, including to all our hubs, and to key business markets like LGA, DCA and BOS. We will also serve from Cleveland on a non-stop basis key leisure markets, like FLL, MCO,TPA and RSW."

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So, even after the reduction, United will still be the largest carrier at CLE. And United will still clearly ALLOW PASENGERS TO CONNECT THROUGH CLEVELAND.

Writing that United won't allow passengers to connect through Cleaveland is the most idiotic thing a professional aviation writer could pen (especially with all the facts known and easily available).
mk882004
Matt Kladder 1
You are correct that United would "allow" it, and they may even sell tickets that have it, that will yet to be seen, but they are only going to serve large markets now, and most large markets have flights to other large markets. So connecting in Cleveland won't be necessary anymore. But, in the end, you are correct, that is poorly written.
PhotoFinish
PhotoFinish 1
They'll sell them.

O&D traffic alone won't sell every seat that will remain available at CLE.

You're right that most large markets already have direct service. But many people still fly a one-stop itinerary. Usually because the fare is better.

United can still offload some traffic from other hubs. CLE still has quite a lot of seats into and out of Cleveland. (much more than O&D traffic alone would demand.

This seems more about staffing concerns on regional flights. Flights will be reduced by 60%. That's more than half of flights, but seat miles only drop by 36%. Almost all of the reduction will come from regional flights. The only mainline destination dropped is Phoenix. All regional flights to smaller regional cities are all dropped. All that traffic will be handled through other hubs, mostly Chicago and Newark. Gets rid of poorly filled flights thru CLE, helps fill flights at the other hubs. That helps profitability on both ends.

But as far as staffing, with fewer regional pilots and tighter rest rules, and with the 1500 hour rule for new hires making it hard to staff up; having fewer bases with regional pilots makes it easier to schedule them.

But all that mainline connecting traffic seems largely intact. So it's not just poorly written. Shows a complete lack of understanding of: commercial aviation, spoke and hub networks, O&D vs transfer traffic, staffing and scheduling, impact of recent rules and regulations, etc.
ccthorp
ccthorp 1
(Duplicate Squawk Submitted)

United Airlines axing its hub in Cleveland

Cleveland is the latest airline hub to get sent to the chopping block. United Airlines will downgrade its hub operation there, axing the city's hub status in a move that will mean major flight cutbacks and the loss of about 470 jobs.

http://www.usatoday.com/story/todayinthesky/2014/02/01/united-airlines-axing-its-hub-in-cleveland/5139385/
tomhuck
Matt Tran 1
Another story from the AP: "UNITED AIRLINES DROPS CLEVELAND AS HUB AIRPORT"
http://bigstory.ap.org/article/united-airlines-drops-cleveland-hub-airport
blueashflyer
blueashflyer 1
eh...who wants to fly to Cleveland </sarcasm>
aeroplanepics0112
Cole Goldberg 1
What happens to Silver Airways? Do they pull their hub at CLE? Or do they not operate on behalf of United at CLE?

Here is United's PR announcement: https://hub.united.com/en-us/News/Company-Operations/Pages/cleveland.aspx
PhotoFinish
PhotoFinish 1
From Jeff Smisek's letter, "our new schedule out of Cleveland will cover 58% of the current Cleveland-originating domestic passenger demand on a non-stop basis". This refers to Cleveland's O&D traffic in pasengers (or seats/ revenue).

It in no way refers to the planes or flights. Rewriting it as, "These flights will cover roughly 58% of current Cleveland-originating non-stop flights that are operated today." shows a complete lack of understanding of aviation.

This is contradicted by Jeff Smisek's own words. "As a result, we will be reducing our average daily departures from Cleveland by around 60%." That means they're keeping about 40% [NOT 58%]

FBT comes out with their post the day after the news had already broken in this and otero aviation forums. But worse, they got it wrong.
ssjan
Jan F 1
(Duplicate Squawk Submitted)

United to drop Cleveland hub

Ever since United and Continental merged in 2010, everyone worried about the outcome of the Cleveland hub. Even Cleveland officials were worried, so much that they signed an agreement to make sure that Cleveland remained a hub for at least five years. Unfortunately, the airline ended up dehubbing the Ohio city — again.

http://jansaviation.com/news.php?art=united-to-drop-cleveland-hub
PhotoFinish
PhotoFinish 1
Not at all unexpected.

Looks like a casualty, not only of the merger, but also of the new rest rules, and the 1500 hour requirement for new pilots, especially with the mainline airlines hiring away regional pilots.

This looks like the beginning of that perfect storm of pilot shortages that had been predicted.
Moviela
Ric Wernicke 0
Why am I not surprised? As a combination UA/CO is now eliminating the less desirable portions of the business to concentrate the resources where they make the most money.

The reality is that train and bus service can handle the close in distances for many Eastern routes. The demand for air transportation has clearly diminished in the area, so United is moving the resources.

Unfortunately human assets are not as portable and will result in job losses. Personally, if I was told my job was moving from Cleveland to Orlando I be the happiest one at the U-Haul office that day.
Sanky22
Sanky22 0
(Duplicate Squawk Submitted)

United Airlines Likely to De-hub Cleveland

United claims its Cleveland hub is not profitable, and they plan to make huge cutbacks.

http://airchive.com/blog/2014/02/01/united-de-hub-cleveland-monday/
airco436
airco436 -1
(Duplicate Squawk Submitted)

United Expected to Announce Major Cuts in Cleveland Monday

United Expected to Announce Major Cuts in Cleveland Monday

http://airchive.com/blog/2014/02/01/united-announce-major-cuts-cleveland-monday/
JerrySteinberg
(Duplicate Squawk Submitted)

United to Dehub Cleveland, Reduce Flying by 60%

In a letter to employees, United Airlines said it will substantially reduce flying from Cleveland and no longer offer flights that allow fliers to connect through Cleveland to other destinations.

United’s hub in Cleveland hasn’t been profitable for over a decade and the airline said it has sustained tens of millions of dollars in annual losses in recent years. The airline will slash daily flights from 199 today to 72 in June.....

http://www.frequentbusinesstraveler.com/2014/02/united-to-dehub-cleveland-reduce-flying-by-60/

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