United Airlines has moved to do away with its Cleveland hub in the latest part of an effort to streamline its expenses since the company merged with Continental in 2010. United has made the decision to axe the Cleveland hub on the heels of consistent losses it has been suffering as a result of its continued operation. The decision has resulted in mixed responses from Cleveland residents, along with statements by State and local officials voicing their aim to open discussions with United in an effort to reverse the decision.
The move will make a dent in the Cleveland job market to the tune of 470 lost jobs, along with a 60 percent decline in average daily departures. United CEO Jeff Smisek apparently broke the news via letter, and it was confirmed by a copy of the memo detailing exactly why the decision was made. At the core of the decision appears to be the fact that, even despite small hints at a possible future turnaround, Cleveland simply was not worth keeping for the new Airline giant made up of the merged components of Continental and United. Smisek highlighted that the hub had been costing United Airlines tens of millions in losses and that the company simply could not justify its continued operation as one of its major connecting locations. As it stood, Cleveland was the smallest of United’s domestic hubs, and many have been doubtful of its long-term survivability after the 2010 merger.
Smisek, in his letter detailing the decision, attempted to point to some brighter points which focused on the fact that while Cleveland’s hub status was going to change, it wasn’t to be construed as United simply vacating in full. The company stated that it would still keep Cleveland as a to-and-from destination, but would be eliminating its function as a connecting hub. The statement may have calmed some fears that the news indicated a full-scale departure of United’s presence to and from Cleveland. Regardless of attempts to placate worried former employee’s and State officials, the lost jobs are still lost. The State has stepped in to ensure that individuals, hurt by the United Airlines decision to scale-down its Cleveland operations, will be taken care of in the wake of the decision.
Smisek pointed out that Cleveland, although losing its connecting flight use as it loses hub-status, would still enjoy non-stop flights to and from about 34 destinations. Though better than nothing, that figure is down by nearly half of what used to be offered by United and its affiliates.
Despite the gravity of the decision regarding the individual jobs lost, along with heavily reduced traffic to and from Cleveland, careful analysts had long speculated that Cleveland’s future would be uncertain after the 2010 merger between United and Continental. Cleveland was United Airlines’ smallest hub, and Continental already had a presence in the same location. The combination of these facts pointed analysts to view Cleveland’s long-term viability as a United hub with heavy skepticism.
Now, on the heels of the United Airlines decision to drop Cleveland as one of its domestic hubs, the city joins a growing list of US locations battered due to financial cuts by major airlines. Ever since 2003, there has been a growing laundry list of cities seeing their hub-status disappear as major airliners aim to cut domestic costs. Cleveland appears to have found itself the latest casualty on that growing list.
By Daniel Worku