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Letter from Jeff Smisek: United to Reduce Flying from Cleveland
Read a letter from Jeff Smisek to UA employees here: From: JeffSmisek Sent: Saturday, February 01, 2014 4:39:31 PM (UTC-05:00) Eastern Time (US & Canada) Subject: United to Reduce Flying from Cleveland Dear Cleveland co-worker: I want to let you know that we have made the difficult decision to substantially reduce our flying from Cleveland. We will make this reduction in stages beginning in April. (www.opshots.net) Mais...Sort type: [Top] [Newest]
I believe that there were earlier claims that the hub was profitable.
I just read an article from the pre-merger days in which civic leaders were shown the books, which apparently showed a comfortably profitable operation. The conclusion is that the airline would never need to exercise their profitability clause in their hub agreement with the city/state.
It was a guaranteed 2 years, with years 3-5 depending on the profitability of Cleveland, as compared to all other United hubs.
With the cost of fuel, and the earlier 50-seat limit on regional planes, hubs with the least amount of mainline flying will easily be among the least profitable with little effort.
This accelerated schedule has more to do with the pilot shortage that is already starting to show at the regional level. Rather than trim all their regional flights at all hubs across the entire network, it made the most sense to dehub Ckeavland and use the displaced resources to keep their other hubs stronger.
It was a guaranteed 2 years, with years 3-5 depending on the profitability of Cleveland, as compared to all other United hubs.
With the cost of fuel, and the earlier 50-seat limit on regional planes, hubs with the least amount of mainline flying will easily be among the least profitable with little effort.
This accelerated schedule has more to do with the pilot shortage that is already starting to show at the regional level. Rather than trim all their regional flights at all hubs across the entire network, it made the most sense to dehub Ckeavland and use the displaced resources to keep their other hubs stronger.
This isn't the article that I reference above, but us fri. ThR sane paper and gives a great background on the hub agreement back in 2010, and compares to some other hub merger agreements.
http://www.cleveland.com/business/index.ssf/2010/11/deal_to_retain_united-continen.html
http://www.cleveland.com/business/index.ssf/2010/11/deal_to_retain_united-continen.html
* but is from the same newspaper
Interesting article. The airline still plans to keep its domicile here however.
The FTB article opens with, "In a letter to employees, United Airlines said it will substantially reduce flying from Cleveland and no longer offer flights that allow fliers to connect through Cleveland to other destinations."
But the actual letter states:
"Together, this will reduce our capacity (available seat miles) out of Cleveland by around 36%."
"When the schedule reductions are fully implemented in June, we plan to offer 72 peak-day flights from Cleveland, and serve 20 destinations from Cleveland on a non-stop basis, including to all our hubs, and to key business markets like LGA, DCA and BOS. We will also serve from Cleveland on a non-stop basis key leisure markets, like FLL, MCO,TPA and RSW."
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So, even after the reduction, United will still be the largest carrier at CLE. And United will still clearly ALLOW PASENGERS TO CONNECT THROUGH CLEVELAND.
Writing that United won't allow passengers to connect through Cleaveland is the most idiotic thing a professional aviation writer could pen (especially with all the facts known and easily available).
But the actual letter states:
"Together, this will reduce our capacity (available seat miles) out of Cleveland by around 36%."
"When the schedule reductions are fully implemented in June, we plan to offer 72 peak-day flights from Cleveland, and serve 20 destinations from Cleveland on a non-stop basis, including to all our hubs, and to key business markets like LGA, DCA and BOS. We will also serve from Cleveland on a non-stop basis key leisure markets, like FLL, MCO,TPA and RSW."
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So, even after the reduction, United will still be the largest carrier at CLE. And United will still clearly ALLOW PASENGERS TO CONNECT THROUGH CLEVELAND.
Writing that United won't allow passengers to connect through Cleaveland is the most idiotic thing a professional aviation writer could pen (especially with all the facts known and easily available).
You are correct that United would "allow" it, and they may even sell tickets that have it, that will yet to be seen, but they are only going to serve large markets now, and most large markets have flights to other large markets. So connecting in Cleveland won't be necessary anymore. But, in the end, you are correct, that is poorly written.
They'll sell them.
O&D traffic alone won't sell every seat that will remain available at CLE.
You're right that most large markets already have direct service. But many people still fly a one-stop itinerary. Usually because the fare is better.
United can still offload some traffic from other hubs. CLE still has quite a lot of seats into and out of Cleveland. (much more than O&D traffic alone would demand.
This seems more about staffing concerns on regional flights. Flights will be reduced by 60%. That's more than half of flights, but seat miles only drop by 36%. Almost all of the reduction will come from regional flights. The only mainline destination dropped is Phoenix. All regional flights to smaller regional cities are all dropped. All that traffic will be handled through other hubs, mostly Chicago and Newark. Gets rid of poorly filled flights thru CLE, helps fill flights at the other hubs. That helps profitability on both ends.
But as far as staffing, with fewer regional pilots and tighter rest rules, and with the 1500 hour rule for new hires making it hard to staff up; having fewer bases with regional pilots makes it easier to schedule them.
But all that mainline connecting traffic seems largely intact. So it's not just poorly written. Shows a complete lack of understanding of: commercial aviation, spoke and hub networks, O&D vs transfer traffic, staffing and scheduling, impact of recent rules and regulations, etc.
O&D traffic alone won't sell every seat that will remain available at CLE.
You're right that most large markets already have direct service. But many people still fly a one-stop itinerary. Usually because the fare is better.
United can still offload some traffic from other hubs. CLE still has quite a lot of seats into and out of Cleveland. (much more than O&D traffic alone would demand.
This seems more about staffing concerns on regional flights. Flights will be reduced by 60%. That's more than half of flights, but seat miles only drop by 36%. Almost all of the reduction will come from regional flights. The only mainline destination dropped is Phoenix. All regional flights to smaller regional cities are all dropped. All that traffic will be handled through other hubs, mostly Chicago and Newark. Gets rid of poorly filled flights thru CLE, helps fill flights at the other hubs. That helps profitability on both ends.
But as far as staffing, with fewer regional pilots and tighter rest rules, and with the 1500 hour rule for new hires making it hard to staff up; having fewer bases with regional pilots makes it easier to schedule them.
But all that mainline connecting traffic seems largely intact. So it's not just poorly written. Shows a complete lack of understanding of: commercial aviation, spoke and hub networks, O&D vs transfer traffic, staffing and scheduling, impact of recent rules and regulations, etc.