Volga981

If UA cuts off feeders (express), it soon might start cutting mainliners, becuse CLE to hubs demand will decrease without all those people from small towns. Who knows how many flights at CLE UA will have in 2 years.

ianmanka

Looking at the CLE Wikipedia page, am I reading it correctly that they had 8 different UAX carriers operating their Express routes? Probably only have one or two UAX carriers operate the remaining routes?

Although, looking at the other hubs -- EWR has 4 UAX carriers, IAD has 9 UAX carriers, ORD has 7. So maybe not too out of the ordinary after all.

grahampros

You said yourself why it would never work. " nicer then a city it's size could sustain" Then you were flying around to get out. Problem solved.

Volga981

I am confused. The first sentence says they are not profitable, and the second says they are profitable.

ianmanka

I think the OP means the RJ flights are not profitable, but the mainline flights are. The mainline flights make up for the RJ flight loss.

username

Sorry I did not read through the whole thread...any chance that capacity will be moved to the southeast to plug the hole left by US?

us2

What matters to an airline isn't sheer operating cost -- it's the difference between cost and revenue. A route that costs $1 per available seat mile but which rakes in $2 in revenue per available seat mile is ten times more profitable than a route that costs only $.25 per ASM and brings in $.35 per ASM despite the fact that the less profitable route costs only 1/4 of what the other one does to operate.

That said, shorter routes tend to have higher costs per seat-mile, which is primarily a function of the fact that shorter routes tend to consume more fuel per mile as they operate at lower and thus less efficient altitudes.

Delta dropped CMH-CVG, but they still operate CMH-DTW. One's a little longer, but not by a whole lot. And it was dropped because it made the decision to deemphasize the CVG hub in favor of DTW after the merger. Another aspect of the economics of the industry to consider is the fact that some routes are more profitable than others; profitable routes can be dropped in favor of routes that are more profitable.

grahampros

No. It struggled years before the merger. At the time CO was mostly using it for overflow from EWR and said for years before it was a loss leader. CLE got a gift it stayed as long as it has. It was always CO's by far weakest hub.

however, the airport, Cleveland community, and Continental developed something of an uneasy relationship beginning in the late 1990s. In 2003, the tension became public when Continental then-CEO Gordon Bethune publicly scolded the Cleveland business community and encouraged business flyers to support Continental at Hopkins rather than to take cheaper fights from neighboring Akron-Canton Regional Airport, which at the time advertised itself as the "preferred alternative" to Hopkins and "a better way to go."[38] Around this time, Akron-Canton Airport was undertaking an ambitious expansion in response to substantial increases in enplanements while Hopkins boardings declined.[39][40] Shortly thereafter, Continental reduced the size of its board of directors by halving the number of representatives from the Cleveland area, began to more closely scrutinize local passenger traffic volume, and closed its four off-airport ticket offices in the Greater Cleveland area (while maintaining offices near its Houston and Newark hubs).[41]
On September 14, 2007, Continental announced what was at the time called a "major expansion" at Hopkins that would have increased the hub's capacity by some 40% over a two-year period. The expansion would have entailed some 20 new destinations served primarily on regional aircraft, followed later by a dozen new destinations served on mainline aircraft. This expansion was expected to create 700 jobs, and the state of Ohio offered a $16 million incentive package to help bring the service increase to fruition.[42] However, when record-high fuel prices forced Continental to cut capacity in the summer of 2008, the airline reduced its workforce, eliminated service between Cleveland and 24 cities (including 12 cities that were part of Phase I of its hub expansion program), and reduced the frequency of its flights to a number of others; the service cuts in Cleveland were deeper as a percentage of overall flight volume than concurrent cuts at Continental's Houston and Newark hubs.[43] In March 2009, Continental indicated that it would continue to make capacity cuts in response to reduced demand for seats.[44] Also in March 2009, Continental CEO Larry Kellner omitted Cleveland but referenced Newark and Houston when commenting on the carrier's strengths, stating, "We are strong in the Atlantic, we are strong in Latin America, we are strong in New York, we're strong in Houston."[45]

LaserSailor

Very little chance if either, and in particular DEN has exclusive rights on connections to MRY JNE so I don't see them giving up that green grass run.

RNE

The pell-mell rush is what I find so despicable about Jeff Jong Un's axe wielding. Adversely affected employes have little time to be absorbed at other locations. Passengers with nine month's worth of booked flights may find most of them cancelled. The business community has to scramble. Other airlines will fill in some of the capacity, but that'll take time. The Supreme Leader could have given us that time. He didn't.

RNE, opining that difficult decisions are sometimes unavoidable, but handling them correctly is always possible.

3Cforme

Fuel prices have been pretty stable at this level since the beginning of 2011, really. It's taken a while for carriers to accept that 'cheap' fuel may not return, and to adjust routes and fleets (25-year life cycles) accordingly.

3Cforme

Smisek's letter says CLE hasn't been profitable in over a decade. The agreement to keep CLE from less than 3 1/2 years ago wasn't/isn't the problem.

Xyzzy

Thanks for the link! So it seems they getting out of the cntract with the city of Cleveland after three years using the 'we're losing money' clause...

SFO777

Any half competent accounting department can make any "profit center" show a loss, whether or not it really is.

Xyzzy

Abslutely! UA/CO clearly knew what it was doing when it signed that contract.