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

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

Old Sep 12, 12, 2:03 pm
  #1  
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CLE airfares way up?..... Impact from United, merger?

Finding CLE airfares significantly higher compared to surrounding airport options: CMH, DTW, CAK.

Started to see trend late 2010/early 2011 when UNITED and CO began to integrate their flight lanes.
"Hearding" CLE through ORD began.

Also find UNITED is more expensive out of CLE than other carriers out of CLE.
USAir in particular.

Next week I chose DELTA out of CAK versus UNITED out of CLE; saved $475.
This, to a destination I had flown forever from CLE on CONTINENTAL.

CAK, CMH, DTW range from 1 hr 40 minute to 2 hr 15 minute drive for me.
CLE just under an hour drive.
Have always prefered CLE.

Never found myself on a UNITED flight due to higher fares.
Post merger, seems trending same.

What gives????
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Old Sep 12, 12, 2:06 pm
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It's precisely due to the merger .. competition is nonexistent at CLE.
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Old Sep 12, 12, 2:12 pm
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Originally Posted by kyte View Post
It's precisely due to the merger .. competition is nonexistent at CLE.
That was true prior to the merger though.
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Old Sep 12, 12, 2:20 pm
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Originally Posted by aCavalierInCoach View Post
That was true prior to the merger though.
Well, I suppose one could speculate that the new, nefarious UA via high fares is trying to discourage traffic through CLE as a reason to bail from the hublet .. but what an awfully customer-unfriendly move which would be totally unexpected
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Old Sep 12, 12, 2:32 pm
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Originally Posted by kyte View Post
Well, I suppose one could speculate that the new, nefarious UA via high fares is trying to discourage traffic through CLE as a reason to bail from the hublet .. but what an awfully customer-unfriendly move which would be totally unexpected
While I am no fan of the current regime, I think it's a little silly to say they'd sacrifice profits at CLE in the short-term to jimmy up a PR front to leave. If they're getting more aggressive on pricing because they no longer have to rely on CLE as a reliever hub between EWR/IAD and ORD, then that is a different story.
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Old Sep 12, 12, 2:39 pm
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Originally Posted by kyte View Post
Well, I suppose one could speculate that the new, nefarious UA via high fares is trying to discourage traffic through CLE as a reason to bail from the hublet .. but what an awfully customer-unfriendly move which would be totally unexpected
That is not the case. There is plenty of T,L,K,G avaliability through CLE. I see it often on flight from Vegas to the east. It is the fact that they don't post CLE-XXX fares via the cheap buckets that is probably more of the issue.
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Old Sep 12, 12, 2:47 pm
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Originally Posted by aCavalierInCoach View Post
While I am no fan of the current regime, I think it's a little silly to say they'd sacrifice profits at CLE in the short-term to jimmy up a PR front to leave. If they're getting more aggressive on pricing because they no longer have to rely on CLE as a reliever hub between EWR/IAD and ORD, then that is a different story.
Silly .. as in unpredictable/ridiculous/irrational? Yep, haven't seen much of that as of late ..
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Old Sep 12, 12, 2:48 pm
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Originally Posted by kyte View Post
competition is nonexistent at CLE.
Well, I hope UA does not make the mistake DL did with CVG [and it was before they merged with NW] and that hub was much bigger than CLE.

No competition does not mean you can charge ludricious fares. Above average sure, but over the top nope. Companies WILL and DO force people to fly into alternate airports and drive 2 hours if the difference in airfare is significant.

That is what happened with CVG, many business travelers were forced to fly into SDF, IND, or DAY and drive. DL's actions in CVG costed DL hundreds of millions in revenue when they started seeing contracts being terminated, O/D traffic dropping sharply, etc. Then the hub became unprofitable. I have witnessed it first hand with CVG and others have said the same thing, and now UA is repeating history with CLE.

Last edited by golfingboy; Sep 12, 12 at 3:55 pm
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Old Sep 12, 12, 3:07 pm
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Originally Posted by kyte View Post
Silly .. as in unpredictable/ridiculous/irrational? Yep, haven't seen much of that as of late ..
At lease we can come up with some profit logic (however flawed we believe it to be) for most of UA's changes -- this would be going "full re****"
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Old Sep 12, 12, 3:24 pm
  #10  
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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.
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Old Sep 12, 12, 3:31 pm
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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.
+1
Excellent summary of the current situation.
At least there are alternate airport options if one doesn't mind the inconvenience.
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Old Sep 12, 12, 3:48 pm
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There's also a big push here to "Save our Hub" from the local business community. They define saving the hub as going out of your way to fly UA when possible.

... and I'm just mercenary enough to fully believe that UA is capitalizing on that by jacking prices, knowing that local businesses are being encouraged to direct business there. And, as an earlier poster noted, I'm not quite jaded enough to believe that they're jacking prices to decrease revenue to the point where they have an excuse to leave, I do FULLY believe that is precisely what will end up happening in the end.

The price differential is enough that companies we work with on the east side have even started sending travelers to PIT (as well as CAK) for certain destinations. 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. Many companies are still paying UA whatever they ask, but I do see that starting to fray a bit at the edges...

The "Save our Hub" crowd are getting a little less believable these days because of what is perceived locally as an acceleration in UA's price increases out of CLE. Whether that's factually true or not, quite a lot of people are grumbling about it.

EDIT: I'm also willing to believe that the push from the business community is working - and so loads are higher, and therefore the average prices we're seeing, particularly near-term, are higher than they used to be when loads were lower?? But if that's the case, I would think that UA would add capacity here rather than cede positive momentum to DL or AA (or CAK or PIT). And they're not doing that -- in fact, they're still cutting. So there's gamesmanship going on, without question, even if we don't know the reasons.

Last edited by Darlox; Sep 12, 12 at 3:53 pm Reason: Adding an additional thought...
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Old Sep 12, 12, 5:26 pm
  #13  
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There's also a big push here to "Save our Hub" from the local business community. They define saving the hub as going out of your way to fly UA when possible.
I think its fine for them to do what they're doing, but I don't think people need much reminder that they're in a UA/CO fortress hub; unless you never fly anywhere, you know that they're the big game in town.

as I said earlier, I think companies (and some individuals) are willing to pay a bit more for the convenience and yes, to support the hub in the sense that they want the variety and frequency of that in the future (UA understands CUSTOMERS paying for long term viability, but doesn't understand providing long term value...).

CO doesn't seem to be trying to extract the excess from leisure, as the FL/LAS pricing is 'reasonable' (and they rightly expect a family of 4 is much more likely to go to CAK over a $100/ticket price difference).

I don't like their "gun to the head" approach they're taking with local business, CLE traffic is at least as profitable as other hubs now, yet they want more money for providing less, and threaten that businesses need to pay up or they'll pack up and go. WN and FL both provide a better product (737/717) than most of CO's offerings out of CLE (which are mostly RJ and prop) to short-haul business destinations (CHI/NYC/BOS/WAS/ATL).
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Old Sep 12, 12, 6:06 pm
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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.
Company I work for has our corp HQ in Cleveland and the perception there is the fares have definitely skyrocketed since merger. I think above post is spot on. Speaking with one who coordinates bringing people in for meetings to offices the talk is it's becoming more challenging and doing a lot of transportation juggles with CAK that were never done before. I've also seen CLE based employees that fly here into the northeast, where I am, doing a lot more flying out of CAK as a result.

Those employees who live outside of CLE a bit and on the CAK side of it are flying almost exclusively out of CAK now as a result. Despite corp discounts UA has in place with our company it's become somewhat outrageous from second hand info I hear and admittedly this is a small sample size but UA is losing biz from company I'm with at quite a pace.
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Old Sep 12, 12, 7:12 pm
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It's merger related to the extent that you now have the UA revenue management, which was producing the best RASM in the business pre-merger, instead of PMCO revenue management, which was not nearly as good at extracting the most from every traveler.

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.
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