ANALYSIS: United shutters Cleveland hub

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United Airlines has officially closed its hub at Cleveland Hopkins International airport, ending service to the last batch of cities in its three-phased drawdown at the Ohio airport.

The Chicago-based Star Alliance carrier’s last flights to cities including Atlanta, Grand Rapids, Phoenix and Toronto departed on 5 June. It continues to operate about 70 peak day flights to its seven domestic hubs as well as select other cities, including Boston, New York LaGuardia and Orlando.

The Cleveland Airport System, which operates the airport, officially closed concourse D at midnight on 5 June, according to local reports. The 16-gate facility had handled regional flights for United.

“The demand for hub-level connecting flying through Cleveland simply isn't there," said Jeff Smisek, chairman, president and chief executive of United, in a letter to employees in February. "Ultimately, we can't create demand, but we do have a responsibility to react to it.”

United routes from Cleveland, March 2014 (top) and July 2014 (bottom)

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Innovata FlightMaps Analytics

Seat capacity on United will decrease by more than 40% to about 180,000 seats in July from March, the last month that the airline operated a full schedule from Cleveland, Innovata FlightMaps Analytics shows.

Many of the discontinued flights were operated by inefficient 50-seat or smaller regional jets, which United is replacing with larger 76-seat Embraer 175s. The airline plans to remove 43 of the small jets and add 27 of the larger aircraft to its regional fleet in 2014.

Monthly seat capacity will fall even further once Silver Airways ends service to six essential air service (EAS) cities in July. The Fort Lauderdale-based regional carrier was scheduled to discontinue the United Express flights to the cities in May, however, the US Department of Transportation (DOT) extended the service obligation through 14 July when it hopes to have found replacement carriers.

The discontinued cities include Bradford, Dubois and Franklin/Oil City in Pennsylvania, Jamestown in New York, Marietta in Ohio and Parkersburg in West Virginia.

United has shifted some connecting service from Cleveland to its hub at Chicago O’Hare International airport. New flights began to Erie, Pennsylvania, and Flint, Michigan, on 5 June.

Other airports, including Richmond International, have yet to see the seats lost by the Cleveland cuts replaced by additional flights or higher gauge aircraft to other United hubs.

Closing Cleveland is expected to benefit United, which has lagged the industry financially since 2012.

Smisek called the move to eliminate its hub in Cleveland a “tough decision” that the carrier had to take in order to maximise profit, at an industrials conference earlier in June.

“Cleveland had good local traffic but it had underperforming flow traffic,” he says.

United reported an operating loss of $349 million on $8.7 billion in operating revenues in the first quarter, a period when all other mainline carriers reported record or near record profits.

Fitch Ratings said the decision was a credit positive after the announcement was made in February.

Delta Air Lines and Frontier Airlines are expanding in Cleveland as United exits. The former has added service to Hartford, Indianapolis and Raleigh/Durham, while the latter plans to add service to Atlanta, Fort Lauderdale, Fort Myers, Orlando, Phoenix, Raleigh-Durham, Seattle/Tacoma and Tampa later in June.

Overall seat capacity at Cleveland Hopkins will only decline 16.5% to about 390,000 seats with the service additions from March to July, according to Innovata. However, the airport will lose nonstop service to 25 cities.