United kills another airline hub. What happens next in Cleveland?

Dan Weissmann Feb 3, 2014
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United kills another airline hub. What happens next in Cleveland?

Dan Weissmann Feb 3, 2014
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When United Airlines announced that it will be dropping Cleveland as a hub, the move itself wasn’t a huge surprise. The city’s been working overtime to keep United there, knowing the ice was thin.

But the timing was awkward. Just last week, United executives came to town for a big party hosted by the Chamber of Commerce, celebrating the new issue of United’s in-flight magazine, which features a 56-page insert about Cleveland.  

Joe Roman, who heads the Greater Cleveland Partnership, puts on a resolutely brave face.  “Well, we’re certainly disappointed,” he says, “but I don’t feel as though we left anything out on the table.”

With Roman’s urging, the airport got some upgrades, the city pulled back on some airport fees, and Roman says hundreds of local businesses encouraged their employees to fly United for work. 

He says some of them adopted policies putting United’s bottom line ahead of their own.  “Companies have created specific threshhold policies, where they said: ‘If the price of flying United falls within $300 or $400 of a competitor’s ticket, fly United.'”

But it didn’t work out. The airline says it was losing tens of millions of dollars a year on its operations there. The company is pulling 470 jobs from Cleveland. 

The worst-case scenario would be that other businesses pick up and move.  

“The major example in recent memory is Chiquita,” says Adie Tomer, from the Brookings Institution.

Delta pulled its hub out of Cincinnati’s airport, and Chiquita Brands moved its headquarters to Charlotte.

“It offered them a metropolitan area of similar size, but more-expansive flight connections,” Tomer says.

That kind of pullout seems unlikely in Cleveland’s case, says Michael Boyd, president of Boyd Group International, an aviation-industry consulting firm.

“Cleveland will do fine,” he says. “They’ll end up with 35 to 40 non-stop destinations. They won’t have non-stop flights to Albany anymore, and all seven people who took that flight every day will be upset, but other than that, it’ll be back to normal.”

Other, smaller, cities—places that the Cleveland hub serves—will get hurt more. He offers Parkersburg, W.V., as an example.  “Their main access to the rest of the world is on a commuter flight that connects to that hub” in Cleveland, he says. “That hub is gone.” 

Tomer and Boyd agree, the smaller number of hub airports, and the smaller number of flights to smaller cities, are part of the consolidation of the airline industry in recent decades.

“Thirty years ago, there were something like 40,000 people who flew between Albany and Boston,” says Boyd. In those days, smaller regional airlines made money flying those routes.  

Not anymore. Today, he says, “there’s probably not one-tenth that number” flying from Albany to Boston.

“And almost none of them are flying non-stops. There aren’t any flights.”

So, how are people getting from Albany to Boston?  “They’re not,” he says.  “The travel paths have changed. You can’t fly there anymore, so people just don’t travel it.”

 

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