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CLE airfares way up?..... Impact from United, merger?

CLE airfares way up?..... Impact from United, merger?

Old Sep 12, 12, 9:35 pm
  #16  
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Originally Posted by entropy View Post
CLE is one of UA's most profitable hubs now, with some of the highest % O/D traffic of any hub (far more than their beloved IAH).

they expect people to pony up because its "more convenient", what they don't account for, is that business travelers will fly them with a smile on their faces if the price is $50-100 (10-30%) more than the competition for the nonstop, convenience and schedule. When the price moves to the 2x regime+, (when you can get a $300 midweek RT CAK-LGA on FL, but CO wants >$1000 for CLE-EWR/LGA). CAK isn't nearly as convenient to downtown, but I don't know too many companies that wouldn't suck it up to save $700 for 45 minutes.
I work in downtown Cleveland and live roughly 10 minutes from the office and 10 minutes for CLE. I don't agree with your broad assessment that Cleveland companies are bailing to CAK because the fares are higher. Myself and people in my office travel to New York, Chicago and Washington On a weekly basis. We all agree airfares seem to have been inching higher but we certainly aren't headed to CAK to catch a flight. In good traffic, CAK is one hour drive time from downtown Cleveland. Keep in mind that CAK is about 10 or so miles south of Akron. Many companies, including mine value that two hours (round trip) as more valuable than the airfare savings by going to CAK.

Then other thing that CLE has going for it is mainline flights and frequency, especially to New York and Chicago. Are some companies transitioning to CAK? Yes, certainly; but I don't think it is in the numbers being eluded to here. UA recently commented that the CLE business community has lived up to it's commitment to flying UA out of CLE. In the end I don't think it will matter in terms of our hublet but that's a topic for another thread.
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Old Sep 12, 12, 10:03 pm
  #17  
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Originally Posted by FrequentFlyKid View Post
I work in downtown Cleveland and live roughly 10 minutes from the office and 10 minutes for CLE. I don't agree with your broad assessment that Cleveland companies are bailing to CAK because the fares are higher. Myself and people in my office travel to New York, Chicago and Washington On a weekly basis. We all agree airfares seem to have been inching higher but we certainly aren't headed to CAK to catch a flight.
Airfares are not that high yet, but it is getting there. Very few companies value 2-3 hours of their employee's time more than $400-500.

In early 2000s after 9/11 airfares tanked. Dad flew for work from SFO to Cincy 2x per month, the cheapest fare to Cincy were M or K fares, which was $700-800 for a r/t when DAY/IND/SDF was $150-250.

Often he flies with 1-2 people, so it is not just one person savings. One time, he paid $1800 for a ticket in Y to fly to CVG and it was not a fully refundable ticket.
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Old Sep 12, 12, 11:08 pm
  #18  
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Companies that care so much that CAK is a bit cheaper are not important to United. Those passengers are buying cheapo fares, and can be replaced by the next BIS that comes along.
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Old Sep 12, 12, 11:14 pm
  #19  
 
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It's small business and the individual business traveler who pay through the nose. The bigger companies negotiate corporate rates, which are not as astronomical as the rates cited.

It's just by a few flights, but for a change UA has actually INCREASED CLE peak day schedules for October. A lot of the latest CLE cuts were to rebuild lost Colgan flights in IAD and IAH. Now that UA is working their way out of that mess, they can put a bit back into CLE.
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Old Sep 12, 12, 11:50 pm
  #20  
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Companies that care so much that CAK is a bit cheaper are not important to United. Those passengers are buying cheapo fares, and can be replaced by the next BIS that comes along.
A bit cheaper? I don't think people here are talking about a bit cheaper. When you're talking a diff of 5-600$ on a flight, then its a viable option. As FrequentFlyKid, his company doesn't care and will use CLE anyways, even if the fare is that much higher, companies that are large enough not to care also probably have a significant corp discount which also reduces the sticker price to a more reasonable price...

In either case, pigs get fed, hogs get slaughtered.
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Old Sep 13, 12, 2:10 am
  #21  
 
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Originally Posted by mduell View Post
Fares to PHX or TPA may still be cheap, but where there's strong business demand you're going to see expensive fares: IAH-WAS minimum fare for a 1 weeknight stay is now $1500; if you stay 3 nights or a saturday, it's $250.
Yep CLE-PHX is cheap...non-stop on US metal.
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Old Sep 13, 12, 2:53 am
  #22  
 
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Originally Posted by TA View Post
Companies that care so much that CAK is a bit cheaper are not important to United. Those passengers are buying cheapo fares, and can be replaced by the next BIS that comes along.
Any company that can offer United volume is important at this point.

Its kind of ironic that you think being a bit cheaper is not important to United. You know they removed the option of PassPlus customers to pay for the contract or add additional funds via a credit card? It has to be done by wire or check. Why? Because its a bit cheaper for United. I guess United can care about pennies but not be bothered by customers who try to do the same?
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Old Sep 13, 12, 3:23 am
  #23  
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Originally Posted by kyte View Post
It's precisely due to the merger .. competition is nonexistent at CLE.
Not even a dent from WN?
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Old Sep 13, 12, 7:17 am
  #24  
 
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Originally Posted by uastarflyer View Post
Not even a dent from WN?
Not really. WN just doesn't have the volume of flights at CLE to affect too many routes. They help on fares to CHI, STL and BWI but that's about it.
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Old Sep 13, 12, 8:16 am
  #25  
 
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Originally Posted by DawgmanOH View Post
Not really. WN just doesn't have the volume of flights at CLE to affect too many routes. They help on fares to CHI, STL and BWI but that's about it.
Don't forget BNA. WN helps there too.
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Old Sep 13, 12, 8:46 am
  #26  
 
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RT CLE-SFO

This is my first year as a FF since the early aughts. I can tell you that the CLE-SFO fares definitely have been inching up all year. Looking to book my November trip and compared it to what I got February and March. The difference is now almost $200 for the same schedule (leave Monday morning, redeye back Thursday night). However, that isn't enough to get me to fly out of CAK for any reason. Only time I do that is for CLE-LGA.
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Old Sep 13, 12, 9:16 am
  #27  
 
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Originally Posted by Darlox View Post
CAK is seeing a lot of Boston travel (AirTran) and PIT is seeing a lot of Philly and other east-coast destinations where US is strong.
Given that PIT-PHL fares have soared since WN dropped the route, and that US has dropped a lot of flying out of PIT, sending employees from Cleveland -- even the East Side -- to Pittsburgh to fly to, for example, PHL, seems penny-wise and pound-foolish.

The fare differential for a midweek overnight trip next week is about $325 to fly to PHL from PIT vs. CLE. From Beachwood to PIT is over 100 miles, so at standard IRS reimbursement rates it would cost about $60 each way (+ tolls) to send employees to PIT. Then you have to account for the extra hour and a half of driving to the airport each way; you're giving up three hours of employee time to save less than $200.

I live in Philly, and to fly my family of four from PHL to see my mom and dad in Cleveland is prohibitively expensive, so we end up driving to BWI. This saves us $300 a ticket, and for four of us, even calculating the mileage and extra hour and a half each way to get to/from the airport, it is worth it. If it were just me, I'd fly from PHL.

CAK is close enough that it is a different story, and I can see how it would be a better option for people flying to LGA or BOS, especially if they are in the East Side or near the I-77 corridor south of Cleveland.
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Old Sep 13, 12, 10:08 am
  #28  
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Originally Posted by golfingboy View Post
Airfares are not that high yet, but it is getting there. Very few companies value 2-3 hours of their employee's time more than $400-500.

In early 2000s after 9/11 airfares tanked. Dad flew for work from SFO to Cincy 2x per month, the cheapest fare to Cincy were M or K fares, which was $700-800 for a r/t when DAY/IND/SDF was $150-250.

Often he flies with 1-2 people, so it is not just one person savings. One time, he paid $1800 for a ticket in Y to fly to CVG and it was not a fully refundable ticket.
Originally Posted by entropy View Post
A bit cheaper? I don't think people here are talking about a bit cheaper. When you're talking a diff of 5-600$ on a flight, then its a viable option. As FrequentFlyKid, his company doesn't care and will use CLE anyways, even if the fare is that much higher, companies that are large enough not to care also probably have a significant corp discount which also reduces the sticker price to a more reasonable price...

In either case, pigs get fed, hogs get slaughtered.
I preface this by saying I can only speak first hand to what my company does in terms of air travel. I do think I can accurately comment on Cleveland business travel in general as I work closely with other firms and businesses in town and have an idea of their tendancies as well. As my firm's main office is in Columbus we do not have a corporate discount/contract with United so keep that in mind.

Let me offer a real world example of why the lower CAK airfares are not attracting business fliers in droves (as of yet). Assume that I get an email needing me to be in New York next Monday, Sept. 17 for a late morning meeting. It will be an out and back trip, same day. Here are my flight options to LGA:

CLE
United - $1,150
Outbound departures at 7:25 AM or 8:14 AM
Return departures at 3:59 PM, 6:25 PM, or 7:38 PM

CAK
Airtran - $360
Outbound departure at 6:00 AM
Return departure at 8:40 PM

In this very real example the difference is substantial - over $700. At first glance it would appear that this is a no brainer. Well not so fast; there is more than meets the financial eye here. First of all, the options out of CAK are extremely limited. Only one flight in each direction. No wiggle room for changes in your schedule, severe delays, cancellations, etc. or me. There is also the travel to/from the airport to consider as well. CAK is 52 miles (many times with considerable traffic congestion because of construction on I-77) from my office in downtown Cleveland whereas CLE is 12 miles. That's an hour more in each direction to/from CAK. In the winter the distance issue it exacerbated by snow fall. The drive to CLE from downtown in the snow can be timely and harrowing, let alone a trip to CAK. On top of the money & work lost in the time it takes to travel to CAK my company will pay about $45 more in mileage reimbursement for me to go to CAK as opposed to CLE.

My point is that even though the airfare is substantially lower out of CAK there are a lot of reasons that CLE is still more desirable for the Cleveland business traveler. This is not to say this applies to every company and certainly each company values these things differently. If business travelers were flocking to CAK I think you would see more frequencies to the big business centers (NYC, WAS, CHI, etc.). CAK is a great airport that I have used many times. It serves a niche market and does very well at it. When time and schedule aren't an issue, such as family vacations, etc., I look to CAK and encourage others to do so as well. I don't want anyone to construe my post as a knock on CAK.

Last edited by In The 216; Sep 13, 12 at 11:41 pm Reason: Spelling
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Old Sep 13, 12, 9:52 pm
  #29  
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Originally Posted by Beerman92 View Post
Any company that can offer United volume is important at this point.

Its kind of ironic that you think being a bit cheaper is not important to United. You know they removed the option of PassPlus customers to pay for the contract or add additional funds via a credit card? It has to be done by wire or check. Why? Because its a bit cheaper for United. I guess United can care about pennies but not be bothered by customers who try to do the same?
Your thinking is not really solid here. Of course UA cares about the margin it gets on tickets, so it will implement fees and conditions to influence the per ticket revenue.

It is a separate issue that I'm pointing out. When customers line up to buy those tickets at the price you have now set, losing a few customers who choose a cheaper option doesn't matter because there are plenty of others to take their place. (up to the point your customers begin to decrease to the capacity of the buckets you're offering)

Not all volume is the most profitable volume.
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Old Sep 13, 12, 11:48 pm
  #30  
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Originally Posted by TA View Post
Not all volume is the most profitable volume.
+1

If an airline can sell every single seat on their plane for $200 that's great. If they sell 60% of the seats on the same plane and the average fare is $400 that's even better. Loads don't equal yields nor are they an indicator of anything more than how many people possessed any instrument the airline was willing to accept to board the plane; value notwithstanding.
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