Published on : Monday, February 3, 2014
The United Airlines announced on the first day of February that it will no longer use Cleveland as its hub airport and will cut off its daily flights from this money losing hub and in turn eliminate 470 jobs. The airline wills no longer connect other flights with Cleveland announced the company’s CEO Jeff Smisek. The United’s daily departures from the city will fall to 72 from 199.
“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,” Smisek states. “We simply cannot continue to bear these losses.”
United Airlines said in November that it aims to cut $2 billion in annual costs in the coming year by shifting flights, making workers more productive and improving its maintenance procedures.
Similar cutbacks have affected many other small hubs in cities such as Memphis, Cincinnati and Salt Lake City amid a wave of airline mergers over the last five years.
Because it’s hard to fill a plane between, say, Indianapolis and Paris, airlines use hubs like Cleveland to gather passengers and connect them to the flights they want. People who live in a hub city get a wider selection of destinations because their airport has more flights than it would if it was limited to the flights supported by local traffic.
Cleveland was a hub for Continental when it merged with United in 2010 to form United Continental Holdings Inc. Ever since the merger; people in the industry have assumed it was in danger of losing its hub status, because the airline now has United’s Midwestern hub in Chicago.
“Ever since the merger everyone knew this was a risk, which is why economic development officials for the city, the region and the state have discussed options with United for keeping its presence in Cleveland,” Ohio Gov. John Kasich said. “This is a disappointing decision and one we disagree with, but a point that United stressed is that demand for air travel from Cleveland remains strong and that they’re maintaining virtually all of their flights to and from major markets.”
In June, Delta Air Lines Inc. announced it would be closing its Memphis hub, which it had inherited in its 2008 acquisition of Northwest Airlines. Delta already has a huge hub operation in Atlanta.
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