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Effect of Consolidation on CLE?

 
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Old Feb 17, 2008 | 8:53 am
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Just remember what US did to Pittsburgh after the HP merger.....
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Old Feb 17, 2008 | 8:58 am
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Originally Posted by J.Edward
Why?
Why not? I don't think 8 hubs makes sense, do you? I think the case needs to be made that there won't be closures, not the other way around.
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Old Feb 17, 2008 | 9:25 am
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Originally Posted by Cargojon
Just remember what US did to Pittsburgh after the HP merger.....
They throttled back an airport catering mainly to connecting traffic; US ran that operation based on connections, not o/d.
Originally Posted by pbarnette
Why not? I don't think 8 hubs makes sense, do you? I think the case needs to be made that there won't be closures, not the other way around.
8 o/d producing hubs? Yes.

8 connecting hubs? No.
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Old Feb 17, 2008 | 10:41 am
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Originally Posted by J.Edward
They throttled back an airport catering mainly to connecting traffic; US ran that operation based on connections, not o/d.
8 o/d producing hubs? Yes.

8 connecting hubs? No.
I've already made my argument about how the numbers absolutely do not support the claim that CLE is a major O/D market in the merger thread. I honestly don't understand why the 30-something biggest market in the US, a market that is, frankly, the butt of jokes due to years of economic downturn and de-population, and a market with no more traffic than KC suddenly qualifies as so important that it will meet a different fate than PIT.
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Old Feb 17, 2008 | 11:17 am
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Originally Posted by ctownflyer
Typical Plain Dealer trash journalism on display...
And your paper of choice would be...? the 8 page ABJ?
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Old Feb 17, 2008 | 11:28 am
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Originally Posted by sammy0623
And your paper of choice would be...? the 8 page ABJ?
The PD is good for local sports, that's the only reason I get it.
Otherwise the WSJ and online news sites do the job for me.
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Old Feb 17, 2008 | 12:40 pm
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Originally Posted by pbarnette
I've already made my argument about how the numbers absolutely do not support the claim that CLE is a major O/D market in the merger thread. I honestly don't understand why the 30-something biggest market in the US, a market that is, frankly, the butt of jokes due to years of economic downturn and de-population, and a market with no more traffic than KC suddenly qualifies as so important that it will meet a different fate than PIT.
Ummm... for the umpteenth time we get it. CLE should be happy with it's current unwarranted status as a hub and if things don't work out for it at merger time we won't come blame you.

I think we can all agree that the population of CLE isn't NYC or CHI or WAS. But what CLE does have that those cities don't have is an airport capable of growth. Now, are all airlines looking to grow today? No. But today isn't 5-10 years from now. I just don't think they can solely look at next year or the year after. At some point all companies want to grow - it's in their dna. Do they need all of their hubs to have room for growth - no. Would it be smart to have ONE hub capable of growth - yeah.

Just my two cents and I reserve the right to be wrong.
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Old Feb 17, 2008 | 3:37 pm
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Originally Posted by fireworksboy
I think we can all agree that the population of CLE isn't NYC or CHI or WAS. But what CLE does have that those cities don't have is an airport capable of growth.
That is all good and well, but what does this have to do with O/D? The previous posts here and on the merger thread that I replied to all mentioned, to a greater or lesser extent, that CLE would be a hub because it is a strong O/D market. This is simply not supported by any evidence I can find. I'm sorry that I keep pointing it out, but as long as folks keep saying things like "8 o/d producing hubs? Yes." to imply that CLE is a big O/D market, then I reserve the right to keep asking them to provide evidence that it is a big O/D market - I have claimed it isn't and offered evidence to support that. To say EWR will remain a hub is a no-brainer, saying the same thing about CLE is not. So, I'm just asking for folks' explanations. Your explanation goes a bit of the way there, but again, I was responding to someone who excluded connecting concerns from his explanation, instead focusing on O/D that isn't there.

And, hey, I get it, you are a CO fan. Good for you. Posting the same rah-rah garbage for the "umpteenth time" ain't helpful either. And definitely no reason to take it so personal.
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Old Feb 17, 2008 | 4:03 pm
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Originally Posted by fireworksboy
Ummm... for the umpteenth time we get it. CLE should be happy with it's current unwarranted status as a hub and if things don't work out for it at merger time we won't come blame you.

I think we can all agree that the population of CLE isn't NYC or CHI or WAS. But what CLE does have that those cities don't have is an airport capable of growth. Now, are all airlines looking to grow today? No. But today isn't 5-10 years from now. I just don't think they can solely look at next year or the year after. At some point all companies want to grow - it's in their dna. Do they need all of their hubs to have room for growth - no. Would it be smart to have ONE hub capable of growth - yeah.

Just my two cents and I reserve the right to be wrong.
Pittsburgh built that new airport almsot exlclusively fro US Airways. The airport now, having been gutted, certainly has "room for growth."

Growth of a mid-market airport is not what airlines care about. Trimming expenses is what they care about. That's what happened to PIT. US wanted everything run through PHL, CLT, and PHX. Never mind all of us East Coasters who wanted to avoid PHL like the plague.
CLE will suffer the same fate.
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Old Feb 17, 2008 | 5:16 pm
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Originally Posted by pbarnette
That is all good and well, but what does this have to do with O/D? The previous posts here and on the merger thread that I replied to all mentioned, to a greater or lesser extent, that CLE would be a hub because it is a strong O/D market. This is simply not supported by any evidence I can find. I'm sorry that I keep pointing it out, but as long as folks keep saying things like "8 o/d producing hubs? Yes." to imply that CLE is a big O/D market, then I reserve the right to keep asking them to provide evidence that it is a big O/D market
I think if you'll review my post again you'll see that I agree with you and am stipulating to the fact that CLE is not a top performing O/D hub. I was not claiming otherwise. Just pointing out that stating the same thing over and over again doesn't make it any more or less true. It is was it is.
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Old Feb 17, 2008 | 6:30 pm
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The take-away: the case for downsizing CLE isn't nearly as obvious as it is for CVG or MEM, but is still pretty compelling.

Domestic O/D passengers, in millions (rank among US airports) {O/D pax per average departure}
LAX 31.1 (2) {120}
ORD 28.8 (3) {68}
DEN 22.7 (7) {75}
EWR 19.8 (12) {119}
SFO 16.5 (16) {110}
IAH 13.5 (23) {54}
IAD 10.3 (28) {76}
CLE 7.4 (40) {66}
CVG 4.3 (61) {27}
MEM 4.2 (62) {42}

The {last figure} can be thought of as "how many local pax are on the average flight?" -- except that you should assume it's actually half that figure, since the divisor counts only departures and not arrivals. It's a wonky number, but it makes all the difference; not long before AA shut its hub at RDU, I remember that AA officials told the local newsmedia, "just two more local passengers on every flight and we'll keep it open." Well, in the end, they left, going from 200+ to 45 flights a day. They're back at about 70/day now.

As you can see, CVG is pretty much the closest thing in America to a pure transfer station (perhaps excluding some FedEx/UPS sites), whereas growth at LAX and EWR can be supported by O/D pax alone.

For comparison, some O/D counts for downsized AA or US hubs:
STL 10.2 (29)
SJC 9.5 (32)
RDU 8.3 (37)
BNA 7.8 (38)
PIT 7.5 (39)

We all agree that DEN and IAD have additional capacity -- plus stronger O/D, stronger local economies, and better international connections. Even IAD, the next smallest hub on the CO-UA list, has 40% more O/D than CLE (and could potentially grab more of DCA's 13.6M O/D pax), while DEN's local market is 300% larger. BTS gives us a look at the 2007 passenger traffic ex-CLE. By far the most popular destination for Clevelanders, with nearly 1/8 of departing passengers? Chicago. CLE accounts for just under 5% of CO mainline passengers, a share that would shrink to under 2% in CO-UA. It's less than half the size of UA's mainline operation at IAD.

Data are from Eclat Consulting and BTS; passenger counts are year ending 31 Mar 2007, average departure counts are for Jul 2007.

Last edited by paytonc; Feb 18, 2008 at 2:19 am
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Old Feb 17, 2008 | 7:13 pm
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Originally Posted by paytonc
Some number crunching. Data courtesy Eclat Consulting; passenger counts are year ending 31 Mar 2007, average daily departures are for Jul 2007.

Domestic O/D passengers, in millions (rank among US airports) {O/D pax per average daily departure}
LAX 31.1 (2) {120}
ORD 28.8 (3) {68}
DEN 22.7 (7) {75}
EWR 19.8 (12) {119}
SFO 16.5 (16) {110}
IAH 13.5 (23) {54}
IAD 10.3 (28) {76}
CLE 7.4 (40) {66}
CVG 4.3 (61) {27}
MEM 4.2 (62) {42}

The {last figure} can be thought of as "how many local pax are on the average flight?" -- except that you should assume it's actually half that figure, since the divisor counts only departing flights and not arriving flights. As you can see, CVG is pretty much the closest thing in America to a pure transfer station (perhaps excluding some FedEx/UPS sites), whereas growth at LAX and EWR can be supported by O/D pax alone.

For comparison, some O/D counts for downsized AA or US hubs:
STL 10.2 (29)
SJC 9.5 (32)
RDU 8.3 (37)
BNA 7.8 (38)
PIT 7.5 (39)

We all agree that DEN and IAD have additional capacity -- plus stronger O/D, stronger local economies, and better international connections. Even IAD, the next smallest hub on the COUA list, has 40% more O/D than CLE.
Excellent post and thanks for the stats ^
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Old Feb 18, 2008 | 7:47 am
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Whether Pittsburghers or Clevelanders like to admit at, at least airport wise the situation is nearly indentical.
http://www.eclatconsulting.com/im_pd...us_markets.pdf

Pittsburgh is 39 with 7.5M pax
Cleveland is 40 with 7.3M pax

Some Pittsburghers thought the same logic (oh PHL is already too busy, blah, blah, PIT has so much room to expand) would mean that PIT would expand too after US/HP merged. Most of us knew better and the future has shown that airlines really only care about O&D, they don't care about how many more delays and cancelled flights you get from throwing more flights into congested airspace.

While the pull down may not be as dramatic in CLE, expecting an expansion means you should get your head examined
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Old Feb 18, 2008 | 10:05 am
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Originally Posted by paytonc
The {last figure} can be thought of as "how many local pax are on the average flight?" -- except that you should assume it's actually half that figure, since the divisor counts only departures and not arrivals. It's a wonky number, but it makes all the difference;
O/D traffic is clearly super-important and CLE's case is pretty marginal however you slice it, much as I wish it were otherwise (having connected in ORD twice on the weekend), but that metric is even harder to interpret than you suggest because not all aircraft are the same size. In particular, the downsized UA/AA cities and CVG/CLE, which get a ton of RJ traffic with 50 or fewer seat capacity per flight, are bound to score lower in 'O/D pax per aircraft' than cities served by larger aircraft.
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Old Feb 18, 2008 | 10:34 am
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Originally Posted by pbarnette
I've already made my argument about how the numbers absolutely do not support the claim that CLE is a major O/D market in the merger thread. I honestly don't understand why the 30-something biggest market in the US, a market that is, frankly, the butt of jokes due to years of economic downturn and de-population, and a market with no more traffic than KC suddenly qualifies as so important that it will meet a different fate than PIT.
If your assertion were 100% true, CO would have shut down or scaled back CLE operations after 9/11 (or would be shutting down or scaling back now, for that matter).

That said, I would not be surprised if CLE were scaled down to some sort of enhanced focus city in the event of a CO/UA merger. At best, I would not expect CLE to grow beyond its current level, although I would like to see an expansion.
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