United Abandoning Cleveland Hub

Cleveland Hopkins International Airport

I can give you 500 heartfelt words on why United Airlines should not spurn hardworking Cleveland as a hub, but let’s spare one another, shall we? It’s a done deal, a journey to stability for the airline.

The fact is the hub was losing money and many of the regional flights into Cleveland Hopkins International Airport will be eliminated. Job loss will be somewhere around 470, not counting baristas.

A few months ago United announced they would cut $2 billion in annual costs by tweaking routes, increasing worker productivity and revamping maintenance procedures.

The Cleveland hub hasn’t been profitable for a decade, according to United Chief Executive Officer Jeff Smisek.

Cleveland airport’s Concourse D was built in the 1990s because Continental Airlines, which in 2010 merged with United, demanded it be built to serve a fleet of 50- and 37-seat commuter planes for regional trips.

The Cleveland Plain Dealer reports that United still has to pay off Continental’s $110 million debt for Concourse D and pay lease money of $1,112,482 per month until 2027 “regardless of its flight activity.” But cashing those checks won’t create a lot of jobs.

United’s lease gives them “exclusive use of gates on Concourse D,” which has 16 gates custom made for regional jets that don’t require a lot of wing space. Departures will be “reduced by 73 percent in the coming months.”

Subject to airport approval, United can sublease those gates. They could be refigured to provide more wing space for larger planes, with new jet bridges and passenger boarding areas.

“Fifteen years ago, the entire industry thought that regional jets were the wave of the future,” a city official told The Plain Dealer. “We thought that the skies would be littered with those things. The idea that a terminal would be built to accommodate that kind of activity was a reasonable proposition. Now we are victims of change in a dynamic industry.”

Between April and June, United will reduce its regional jet departures from 174 to 47 and cut its average daily flights from 200 to 72.

“We don’t create demand,” a United official said. “We react to demand. And as difficult as this decision is, it was one that was well-thought out over the past 10 years.”

The spokesperson acknowledged that building Concourse D was a mistake.

United also uses all 26 gates on Concourse C for its larger passenger jets. That lease allows for other carriers to use those gates as well.

The Tarmac’s View:  The “hub” model for major airlines seems to be going the way of the wolf – fewer and fewer are surviving. Some blame airline mergers. But some analysts point to the cost of fuel, which makes 50-seat commuter aircraft unprofitable from takeoff.

But perhaps diminished hubs aren’t so bad for the flying public. In the third quarter of 2013, domestic travelers paid an average $390 for round-trip flights. But passengers flying out of “hub” airports paid more. Average fares out of United hubs were among the highest in the country – Houston-Bush ($507), Washington-Dulles ($506) and Newark-Liberty ($491).

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