Ohio city faces difficulties similar to US Airways axing Pittsburgh in ’04
February 3, 2014 11:00 PM
Paul Sakuma/Associated Press
United Airlines passengers check in at San Francisco International Airport.
By Mark Belko / Pittsburgh Post-Gazette
On Thursday night, a Cleveland business group threw a party to tout the new issue of United Airlines' inflight magazine, which has a big spread about the city, home to one of its hubs. Some 250 people, including United executives, attended.
Two days later, the airline had a much different story to tell the city -- it would be shutting down the hub.
Nearly 20 years after Art Modell shocked Cleveland by saying that he would move the Browns to Baltimore, United delivered a blow of its own, announcing Saturday that it would close its money-draining hub by June, slash service by 64 percent and eliminate 470 jobs.
By the time the airline is done cutting, its average daily departures from Hopkins International Airport will plummet from 200 to 72 and the number of nonstop markets it serves will fall from 59 to 20.
With the reductions, Cleveland will lose service to Oklahoma City, Philadelphia, Nashville, Minneapolis, Atlanta, Buffalo, Indianapolis, Kansas City, Phoenix, Toronto and, yes, Pittsburgh, among others.
Overall, it will be left with 140 daily departures to 32 cities.
"I think the director and the mayor said it best. They were taken aback. I don't think they were shocked. I think, if anything, they were more disappointed because they had worked so very hard with United to create a place for them," said Jacqueline Mayo, an airport spokeswoman.
In a letter to Cleveland Mayor Frank Jackson, United blamed the decision on "significant financial losses" at the airport and a change in regulations affecting regional jet flying. It said that most of the cuts would involve regional departures, not mainline service.
The move came despite a concerted four-year effort by Ohio politicians and business leaders to safeguard the hub after Continental Airlines became part of United in 2010. They launched a "United for the Hub" campaign and urged travelers to fly the airline even if it cost more than taking another carrier.
In the end, it didn't matter.
"We regret the actions we have to take, but we have no choice. Our hub in Cleveland hasn't been profitable for over a decade and has generated tens of millions of dollars of annual losses in recent years. We simply cannot continue to bear these losses," United stated in its letter to Mr. Jackson.
The Thursday night reception to celebrate the United's inflight magazine coverage was organized by the Greater Cleveland Partnership, the region's chamber of commerce, according to the Cleveland Plain Dealer. The newspaper reported that United officials who spoke at the event had kind words for the city.
"We're celebrating this great thing, and now this is happening," Ms. Mayo said.
Despite a bitter rivalry on the football field, if anyone can commiserate with what Cleveland is going through, it is Pittsburgh, which lost its US Airways hub in 2004.
Over the past 13 years, the airline, now part of American Airlines, has cut the number of daily nonstop flights at Pittsburgh International from a high of 542 to 41 today. Employment has plunged from a peak of 12,000 jobs to 1,800. Pittsburgh will lose another 600 jobs over the next 18 months as American closes a flight operations control center in Moon and transfers the work to Dallas-Fort Worth.
Once United is finished cutting in Cleveland, Pittsburgh and its rival will be nearly even in terms of daily departures, 139 to 140, and nonstop destinations, 36 to 32.
William Lauer, an Allegheny Capital Inc. principal who has followed the airline industry for years, said losing hubs is the kind of bad news mid-sized cities need to get used to. He noted that airlines have shut down such facilities in Cincinnati, Memphis and Salt Lake City in recent years.
He suspects a former US Airways hub in Phoenix will be next, though American has vowed to maintain it. He said he was not surprised by United's decision in Cleveland, given that hubs in smaller so-called "originating and destination" markets are taking a beating.
"It really is completely consistent with the problems any mid-sized city is going to have," he said. "It's why [Allegheny County Executive] Rich Fitzgerald has a real challenge in front of him if he's looking to interest other carriers to come to Pittsburgh despite the economics of operating in and out of Pittsburgh."
Despite the loss, Clevelanders tried to put on a brave front Monday.
While saying he was "disappointed" with United's decision, Mr. Jackson said the city plans to work hard to attract new airlines and to encourage existing ones to expand. With the improvements made to the terminal, runways and concessions in recent years, the airport can be competitive, he said.
Any pangs of sympathy aren't preventing officials at Pittsburgh International Airport from looking for ways to capitalize on Cleveland's misfortune.
The county airport authority plans to beef up marketing and advertising in Cleveland and other parts of eastern Ohio in an effort to entice their fliers to Pittsburgh, said Bradley D. Penrod, president and chief strategy officer. That, in turn, could improve Pittsburgh originating and destination numbers and make the airport more attractive to airlines.
It wasn't that long ago that some Pittsburghers, including former mayor Tom Murphy, were driving to Cleveland to catch a cheaper flight. Now the shoe may be on the other foot.
"In some respects, we hope to take advantage of the opportunity," Mr. Penrod said.
Mark Belko: email@example.com or 412-263-1262.
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