Continental Airlines' CLE Hub: Part 3
In Part 1 of this series of three articles on its hub at Cleveland Hopkins International Airport (CLE), we saw the initial investment by Continental Airlines and growth of the hub over its first decade. In Part 2, we saw the addition of the first new airline concourse at CLE in three decades with the opening of Concourse D for Continental Express service, along with the establishment of the first daily nonstop transatlantic airline service from Cleveland to London-Gatwick (LGW), along with the difficulties following the September 11, 2001, attacks faced by the airline industry.
In this final article, we will examine the short-lived expansion of the CLE hub, the impact of the Great Recession on Continental's operations at CLE, the merger of Continental and United Airlines, and the ultimate closure of the Cleveland hub by the merged carrier, United Airlines, for the second time in Cleveland Hopkins Airport's history.
A Big Expansion Announced On September 14, 2007, Continental announced a major $50 million 3-phase expansion of its hub at CLE that was to have added dozens of flights to numerous new spoke cities and increased capacity by 40% by the summer of 2009. An addition of over 700 new jobs, the retention of almost 3,200 existing jobs, the expansion of the ticketing and reception areas of the terminal, including new international gates and a new international arrivals hall off Concourse C, were also included in the plans. A $16+ million incentives package from the state of Ohio was offered to help the airline grow at CLE. While most other airlines at the time were actually decreasing capacity, Continental (and Southwest) were bucking the trend. Continental’s Newark hub also would see additional capacity. As the carrier refreshed some of its fleet at Newark with larger aircraft, it would shift smaller aircraft to Cleveland, with capacity expected to increase at both airports.
"If you look at their network as a whole, the balance of their hub structure is completely saturated," said Robert Mann, head of airline consultancy R.W. Mann & Co. "The Newark facility is completely saturated and, of course, the Newark/New York airspace is completely saturated. Houston is completely backed up, so this gives them the opportunity to grow at Cleveland." (Quoted in a report in Northstar Travel Media, September 24, 2007) Continental’s buildup actually began at the end of 2006. By year-end 2007, its Cleveland capacity was about 10 percent greater than in 2006. A statement from the carrier noted. that by June 2008, Continental expected to be providing 300 daily departures from Cleveland, up from 242 departures in June 2007. Total nonstop destinations served from Cleveland would grow from 80 in 2007 to 100. The addition of over a dozen mainline flights was expected in 2009 along with a projected 40% increase in passenger traffic at CLE (up to about 15 million).
Details of the planned expansion follow: Phase 1 was launched with the introduction of seasonal flight to San Diego (SAN) in December 2006, along with new service to Quebec City (YQB) launched in June 2007. The airline also added mainline capacity in summer 2007, including an increase of 45% to San Francisco (SFO), 33% to Orlando (MCO), 32% to Seattle (SEA), and 10% to Los Angeles (LAX). In addition, new services to Oklahoma City (OKC-2 daily flights) and Ottawa (YOW-1) were launched in late-September
Phase 2 saw the launch of twelve new nonstop destinations on Continental Express Embraer 135/145 regional jets (unless otherwise noted). Effective March 3, 2008:
Greensboro, NC (GSO-3 daily flights)
Omaha, NE (OMA-3)
Savannah, GA (SAV-2)
Effective April 6, 2008
Birmingham, AL (BHM-2)
Charleston, SC (CHS-1)
Green Bay, WI (GRB-2)
Tulsa, OK (TUL-2)
Effective May 4, 2008
Little Rock AR (LIT-2)
Memphis TN (MEM-2)
Lansing MI (LAN-3 with Dash 8-200s)
Effective June 12, 2008
Des Moines IA (DSM-2)
Kalamazoo MI (AZO-3 with Dash 8-200s)
Additional new cities were to be announced in the Phase 2 expansion.
Phase 3 details were to be announced later in 2008, with more nonstop destinations and increased frequencies to existing destinations, which were to be in place for the 2009 summer schedule The state's $16 million incentive package was a combination of grants, loans, tax credits and hiring services. In addition, Continental's new flights would be eligible for the airport's new airline incentive program that would waive up to $2.75 million in landing fees for new flights for six months. The money would come from the airport's parking, rental, and other fees. An airline that added a nonstop flight to a destination approved by airport officials also could receive up to $40,000 to promote the service. To get the most assistance, airlines had to agree to match the airport money.
Proposed Terminal Expansion (including a new International Arrivals area)
Continental and the city were also expected to expand the terminal. The plan entailed removing the glass wall at the south end of the terminal, to the left as you come in door 6 at the ticketing level. A lounge for people waiting for arriving passengers was to be built over the ground-floor baggage area, beyond the original glass wall. The new space also would clear the way for an expanded security checkpoint at Concourse C and a lengthened ticket counter for Continental. The build-out over the baggage area was ultimately replaced with more modest changes to smooth the flow of passengers and ticketing operations. Other changes created additional space for Continental baggage handling by moving offices that housed Cleveland police and the USO military lounge. In addition, a new customs area was expected to be built near Concourse C to replace the one at the end of Concourse A. An editorial in the Cleveland Plain Dealer (September 16, 2007) noted, “And Clevelanders will be relieved to know that the transformation will include bigger, more modern spaces for meeting and greeting arriving passengers, passing through security and clearing customs. (Passengers from London now find themselves crammed into what feels like a fluorescent-lit cave.)” It continued, “This expansion brings invaluable opportunities. Now is the time to resolve shortcomings that have long plagued the airport: untidy restrooms, substandard taxi service, uninspired retail and food choices and general shabbiness. Cleveland can't afford to leave visitors disappointed, even if they're here only for a brief layover. What's more, passengers given attractive shopping and dining options will want to spend their money on goods and services at the airport. And that revenue boost would allow Hopkins to stop relying as heavily on landing fees. When this investment takes flight, Continental and Greater Cleveland both will benefit.” The new international arrivals area was to have cost about $30 million and was in addition to the cost of Continental’s large expansion. Initial plans called for the relocation of three Northwest gates from Concourse C to Concourse A to make room for a new Federal Inspection Services (FIS) facility. Airport Director, Ricky Smith said that plan was scrapped because there is not enough room at the Northwest gates to accommodate the large planes that fly internationally (which seems strange as those gates routinely handled NW DC-10s and even the occasional 747 in the past, planes which are much larger than the B757s then used by CO). No new plans on where to build it were announced. Instead, a phased approach that involved remodeling the existing customs area on Concourse A to improve passenger circulation and reduce congestion, was proposed. The international arrivals area on Concourse A allows for the (smooth) processing of only one flight at a time, although its stated capacity is about 350 passengers per hour (the size of a B747). The new facility was to have allowed for several flights to flow through simultaneously. Another hurdle to overcome was the need for passengers terminating their international flight in Cleveland (and not connecting to another flight) to recheck their baggage, go through security to re-enter and walk through the A Concourse, and collect their luggage again in the main terminal. A “temporary” service was put into place prior to the start of the CLE-CDG flight in summer 2008 (see below). This enabled passengers, whose final destination was Cleveland, to take a shuttle bus directly from customs to the north end of the baggage claim level in the main terminal, rather than having to go through TSA security screening and walk to the terminal. For those with smaller, carry-on sized bags, this was a great interim solution that seems to have worked very well (based on personal experience several times) until the bus service was discontinued in the summer of 2018 (before Icelandair and WOW began CLE-Reykjavik nonstop service) and TSA screening was reinstated, while being announced as a “service improvement” for arriving international passengers! The only other change in international arrivals at CLE over the past several years has been the creation of so-called "swing gates" at the end of Concourse A. Instead of having just one gate (A14) connecting directly to the FIS, three additional gates (A9, A11, A12) can serve flights arriving from foreign countries as well as domestic flights. An opaque wall was constructed to allow “sterile” passage of travelers arriving from international flights to head downstairs to immigration and customs. However, the actual processing space of the FIS has not grown significantly since it opened in December 1979. As soon as March 2008, some of Continental's expansion plans were put on hold due to uncertainty in the airline business, the soaring price of jet fuel and faltering economy. Service was postponed to Lansing and Kalamazoo, MI., and five other destinations that had not been identified. Only about 200 of the expected 700 new jobs were added. And terminal expansion, including the new FIS, was now expected to be completed over the next decade, instead of by 2009. This revised timeline announced by Continental surprised many local officials, including Dennis Roche, president of the Convention and Visitor's Bureau of Greater Cleveland, who called the 10-year window "news to everybody, including me." However, Todd Payne, chief of marketing and air service development at Hopkins stated, "The airport is waiting patiently, but we understand if their plans have changed."
Bonjour Paris: Cleveland’s Second Transatlantic Flight The proposed relocation of international gates was, in part, to accommodate the new seasonal nonstop service between Cleveland and Paris (CDG) that launched on May 22, 2008. This was Continental’s second daily transatlantic flight after London-Gatwick. The author was lucky enough to be aboard this inaugural flight CO134 on a Boeing B757-224 (N41140). The seven-and-a-half-hour flight left a few minutes late due to the many festivities at Gate C27 celebrating the new service but arrived in Paris early. Continental President Jeff Smisek spoke at the event while passengers and guests enjoyed crepes and smoked duck, and art students from Hathaway Brown School drew street scenes of the French capital. Mini Eiffel Towers decorated the tables, and an oversized bottle of champagne shot out red, white and blue confetti. The aircraft received a celebratory water canon salute from two airport fire trucks as it taxied toward the runway. Onboard the first flight were Mayor Frank G. Jackson, Council President Martin J. Sweeney and several other business executives. Passengers in the BusinessFirst cabin of the aircraft enjoyed a meal designed by local celebrity chef, Paul Minnillo, a member of Continental's Congress of Chefs, who helped develop menus and advised the airline on food trends. Occasionally, Minnillo traveled on board flights to assist flight attendants and get feedback on the food and service from passengers. Among the selections on the two-hour, five course menu were New York sirloin steak with pepper rub, seared chicken breast filled with fontina cheese and spinach, and herb-crusted halibut, along with three appetizer choices, and ice cream sundaes made to order for dessert. Service enhancements in economy class on this flight included: a free glass of champagne prior to the meal service; a BusinessFirst amenity kit for all coach passengers, a passport holder, a piece of chocolate with the Eiffel Tower & "Cleveland-Paris Nonstop" imprinted on the label, and a welcome bag upon arrival at CDG with a small bottle of champagne, chocolates, and various literature about Paris. Passengers in both cabins also got to enjoy Continental’s new audio-video-on-demand (AVOD) service with an individual video screen, headphones and a choice of 21 movies, 18 TV shows, 50 songs and dozens of games, including "World Traveler" by Berlitz, where you could bone up on your French language skills. Top-notch service was provided by EWR, IAH and CLE based international crew members.
Officials from Positively Cleveland, the new name of the visitors’ bureau, had high hopes for increased travel and commercial ties between Europe and Northeast Ohio. They met the inaugural arrival flight on May 23, 2008, with French-English visitor packets and mini-itineraries for those with a layover in Cleveland. The organization also hosted five French journalists and travel professionals for a tour of Cleveland in late May, hoping to drum up interest in this lesser-known destination for savvy French travelers, especially with the bargain basement prices at the time due to the strength of the euro versus the US dollar. Another delegation from Cleveland, led by Mayor Jackson, traveled to France in July to attract interest in Ohio at a major tall ships gathering in Rouen, Cleveland's sister city in Normandy. The Greater Cleveland Partnership and the Northern Ohio chapter of the French-American Chamber of Commerce also worked diligently to establish links between the business communities on either side of the Atlantic, including for those connecting either in CLE or CDG, made easier by Continental’s new nonstop flight. It was expected that more than half of the passengers on the route would originate in cities other than Cleveland or Paris. The seasonal flight was scheduled daily through September 2, but CO would consider making it year-round or using larger widebody aircraft if demand were high enough.
CLE’s (& Continental's) Hopes Dashed by the Great Recession On June 5, 2008, Continental announced that record jet fuel costs would force it to cut 3,000 jobs, park 31 aircraft, and slash an unspecified number of flights across its entire system by the end of summer. Analysts feared that this would also cause fares to double in cost compared to the previous summer. This was also the start of unbundling of services, charging extra for things like checked baggage, ticket changes, and onboard meal services, in order to enhance revenue. This news sent waves of anxiety through the Greater Cleveland business and airport communities. A 2000 study financed by Continental found that the airline, which employed 2,400 workers (not including its subsidiaries), was the spur for over 90,000 jobs in the region accounting for $2.38 billion of the gross regional product. Comparing load factors at its three hubs, CLE at 79%, lagged slightly behind EWR at 81% and IAD at 82%. The dominance of more expensive 50-seat regional jets at Hopkins, however, put Cleveland at a competitive disadvantage to other hubs using more efficient larger jets. One possible solution involved the use of more efficient turboprop aircraft to replace the RJs, but the traveling public was not keen on flying propeller planes, even though they use 15% to 20% less fuel. There was hope that both transatlantic flights would be safe, as international flights were generally more profitable than shorter-haul domestic ones. A week after this announcement of looming cuts at all its hubs, the impact on flights at Continental’s Cleveland base came more into focus, with the airline’s plan to cut 16% of its daily departures, to drop nonstop service to 24 cities, and to reduce flights to other destinations! This came a mere nine months after announcing a huge expansion at CLE. Cuts included all twelve regional nonstop flights the airline unveiled the previous September, as well as flights to another twelve cities CO had been flying to longer. CommutAir turboprop flights took the biggest hit with a 58% cut in service. Decisions on which specific flights to cut were made by analyzing the profitability of every flight in the system and sorting them accordingly, and also determining if destinations could be reached through connecting service. Some flights had load factors as low as 31%! Systemwide, CO cut domestic capacity by 11% in the fourth quarter of 2008, with a 13% drop at CLE, 8% at IAD, and 3% at EWR. Specific routes cut from the CLE hub included service to the cities on the map below.
Sadly, service to Des Moines had just started the day specific cuts were announced. Continental did continue service to major markets with the most demand, and there was no decision made about the two seasonal transatlantic routes at this time. There was confidence among some quarters that flights would return when the economy brightened, but the immediate impact of the loss of time-saving nonstop service and reduced connectivity of Cleveland to other markets on local businesses and tourism was certainly less optimistic.
Some work on the terminal expansion had already been completed including extending Continental's ticket counter space and improving baggage facilities. But more ambitious plans to construct a new "meet-and-greet" waiting area, expand a security checkpoint and rebuild the customs area were put on hold and never started.
Adieu Paris (& Cheerio London)
While the Paris flight attracted a respectable number of passengers (73% load factor—not bad for a new international route), the global recession and soaring oil prices led Continental to shelve the flight after only three short months of operation. This decision was announced just before Christmas 2008, giving the city a proverbial lump of coal for the holiday. Cleveland Mayor Frank Jackson diplomatically stated, “Continental is making decisions that will help them remain competitive. Although I would like to see service to Paris continue, the economic climate we are in is a reality.” The previous month Delta Air Lines said it would start year-round nonstop service between Pittsburgh and Paris on June 3, 2009.
Cleveland Plain Dealer travel writer, Susan Glaser, commenting on the loss of nonstop service to the City of Light, stated, “…I wonder whether the airline could've done more to funnel passengers en route to Europe through Cleveland instead of Newark – by better marketing, lower introductory fares or rearranging "feeder" flights into the city. The airline spent three years getting ready for the flight, and only three months to decide it wasn't working.”
Airline analyst, John La Costa, said that the lousy economic environment did not offer airlines any wiggle room. "It never got its legs under itself," he said. "It was launched at the most inopportune time." Fuel prices were at an all-time high, the dollar was at an all-time low against the euro, the number of Americans visiting Europe declined by 7.3% during the peak tourist season, and the US economy was spiraling into what would later be known as the Great Recession. "In a good environment, Paris probably would have worked for Cleveland," said La Costa. "They were really looking for good things to happen here. I can't imagine that anyone is more disappointed than they are."
Another likely factor for the quick abandonment of the route was Continental’s plan to switch airline Alliances from SkyTeam (with a major Air France hub at Paris-CDG) to Star Alliance (with its main European hub at Lufthansa’s home base at Frankfurt). This raised some hope for a future CLE-FRA flight, particularly with Cleveland’s strong business ties to Germany and historical connections to Eastern Europe.
On a more positive note, the carrier decided to switch the summer London service to the more popular and better located London-Heathrow airport (LHR) starting on May 2, 2009. During the 2007 summer season, just under two-thirds of the seats were filled between Cleveland and London-Gatwick, except in June when flights had an 83% load factor. The arrival of “Open Skies” between the UK and US in 2008, permitted more access to the UK’s busiest airport. Continental switched its London flights to from Houston and Newark to Heathrow in October 2008.
It was hoped that more extensive connections offered at Heathrow would improve the performance of the Cleveland route and boost business development efforts. The new seasonal service was to operate through September 26, 2009, departing CLE at 8:25 p.m. and landing at LHR at 9:15 a.m. the following day. Return flights departed LHR at 11:40 daily and arrived at CLE at 3:30 p.m. the same day.
This service also eventually ended after the summer of 2009, actually a few weeks earlier than planned, with the last outbound flight on September 7, 2009. "Demand has really been so dampened by economic conditions that we're ending the summer season a couple of weeks earlier," Continental spokesperson Mary Clark said at the announcement on June 24, 2009. In another statement, the airline blamed "the inability to secure economically viable seasonal slots at Heathrow and the impact of the global recession on the performance of the route." Continental regrets the circumstances that led to the decision," said Jim Compton, executive vice president of marketing. "We remain committed to our Cleveland hub and will monitor the market and slot availability for any decision on resumption of the service."
In addition to the London and Paris service, Continental has offered over the decades non-stop service between Cleveland and San Juan, Puerto Rico, Cancun, Mexico, Nassau, Bahamas, and daily flights to a pair of Canadian destinations, Toronto and Montreal, as well as seasonal service to Quebec City, along with Express flights to London, Hamilton, and Ottawa, Ontario. International traffic at CLE peaked in 2008 when about 306,751 international passengers passed through Hopkins (2.8% of the total market), representing a 12.13% increase in international service compared to 2007 totals.
By the spring of 2009, the dominant air carrier at CLE, Continental Airlines, fielded an average of 38 mainline flights and Continental Express/Continental Connection (operated by Colgan and CommutAir) operated 149 flights, for a total of 186 daily departures to 68 nonstop destinations. Essential Air Service (EAS) contracts also were operated by Gulfstream International Airlines (now operating as Silver Airways) from Cleveland to nearby smaller cities, including Franklin, Bradford, and Dubois, Pennsylvania, Jamestown, New York, and Lewisburg, West Virginia. Together, the carriers controlled about 64% of Cleveland’s total airline market.
The airline also employed several thousand employees at Cleveland, including pilots, flight attendants, and customer service agents, but also air cargo and catering personnel and a highly regarded maintenance team responsible for the airline's Boeing 737 fleet.
Continental’s nearest competitors included Southwest Airlines (which tended to keep prices down, especially compared to other markets with dominant “fortress hubs” like Cincinnati) with about 11%, American and United each with 6%, Delta with approximately 5%, Northwest with 4% and US Airways and America West, each with about 2% of the market (all figures include their respective regional partners).
The Merger of Continental & United: The Beginning of the End for the CLE Hub
A shockwave rocked Cleveland when Continental and United announced plans to merge on May 4, 2010. The combined company was to keep the United name, be based in Chicago, and would have Continental Chief Executive Jeff Smisek at the helm. Rumors of consolidation in the US airline market had been swirling around for the previous two years, first involving US Airways and United Airlines, and then Continental. Some key dates leading to the eventual merger include (thanks to Alison Grant of The Plain Dealer, August 22, 2010):
In 2006, UAL Corp. and Continental Airlines engage in preliminary merger talks. But they are called off because Northwest Airlines holds a “golden share” in Continental stock, giving it the ability to block any merger. In 2008, Northwest and Delta Air Lines merge, which frees CO to redeem the preferred stock.
Continental enters talks with United and they draft a merger plan in April 2008.
In April 2008, United talks to Continental about leaving the SkyTeam global airline alliance and joining the Star Alliance.
Early in 2008, US Airways and United have preliminary merger discussions, but UA breaks them off in June 2008. UA and CO announce that CO will join the Star Alliance and that the two airlines will seek approval for “joint ventures in some international markets.”
UA and US re-enter merger talks in June 2009, they are suspended in September and resume in late January 2010.
CO and UA restart discussions on a merger and enter into a confidentiality agreement to exchange financial information on April 12, 2010.
US Airways breaks off talks with United on April 22, 2010. US would eventually merge with American Airlines.
On April 27, 2010, CO and UA figure out a stock exchange ratio.
The boards of directors of CO and UA both vote unanimously to approve a merger on May 2, 2010, and the merger agreement is executed shortly thereafter.
There was much consternation and worry by airport officials, business leaders, and frequent travelers about the impact this merger would eventually have on the combined airline’s smallest domestic hub, CLE, sandwiched between megahubs of Chicago (ORD), Newark (EWR) and Washington (IAD). A union between the two airlines could mean fewer nonstop flights, higher fares, a loss of prestige that comes with being a hub, less competitive advantage at attracting new business, and a sharply reduced work force at Cleveland Hopkins International Airport where Continental employed 2,200 workers, along with 1,000 others by its regional partner airlines.
Some industry experts and airport leaders predicted that CLE would be retained as a reliever hub (like a pressure valve) for those very congested nearby hubs, while others thought it could be a major focus city for the merged airline, a term that airlines use to designate strategically important markets that are not hubs that cater primarily for local demand rather than connecting traffic. Still others said that the new United would surely close the CLE hub, and that the airport needed to position itself as a low-cost airport with a large traffic base. Some also expressed hope that the higher airfares that come with a hub airport might fall if new airlines enter a changed CLE market.
Of course, the new carrier pledged to maintain hub operations at Hopkins. In an interview with The Plain Dealer (May 4, 2010), Jeffrey Smisek, Continental Airlines' chief executive officer, said that Northeast Ohio will benefit, in the long run, from Continental's merger with United Airlines. A merger will make Continental a sturdier competitor in a business that is unstable and fragile, subject to brutal cycles of boom and bust, He talked about why that will work in Cleveland's favor. Smisek pledged that Continental's Cleveland hub will look the same when the deal with United closes, expected to be at the end of 2010. “It's premature to speculate about details of routes and frequencies beyond then,” he said.
The US Department of Justice approved the deal on August 27, 2010. But documents presented in a lawsuit filed by opponents of the merger in a federal district court in San Francisco on August 31, 2010, showed a much different, less-rosy prospect for the Cleveland hub. An internal Continental "Hub Status" document projecting "optimized" flight networks for the merged Continental and United, suggested that mainline flights at CLE could drop more than half from 42 to 20 and regional flights could plummet from 168 to 13, a 92% reduction!
Smisek stated that he was not aware of these projections, but that no firm decisions had been made. "I hope we will keep all our hubs open, but I can't guarantee that," Smisek said in court. "I don't know what we'll do because we haven't done the optimization." This apparently was just one of several different merger scenarios studied by the carrier, and other hubs, except Washington-IAD, also showed cuts, but none as drastic as CLE. The federal court struck down the claim that the merger of United and Continental airlines would create a monopoly on September 28, 2010, clearing the way for the merger.
On September 13, 2010, Ohio Attorney General Richard Cordray announced an agreement settling an investigation by Cordray's office into the merger's effect on Hopkins and Northeast Ohio. Cordray launched the review in May, saying he wanted to protect jobs and the economic interests of Cleveland, the airport, and consumers. "I am confident that this resolution is the best possible outcome for Cleveland and the state of Ohio," Cordray said.
The deal stated that the new airline will maintain minimum daily departures from Hopkins at no less than 90 percent of the two airlines' average daily departures in the past year. After that, for three more years, the level of service would depend on whether the new airline is making money here, using a rather complicated formula using an imprecise, undefined measurement of "segment profitability." If the new United reneged on the agreement with the attorney general, it faced a fine of up to $20 million and a potential lawsuit. The airline refused to offer details on the hub’s level of profitability or how it compared to the other hubs in the combined system. The message from the new United was clear: The Cleveland hub stayed only if it made money for the airline!
CLE's Role in the Merged United Airlines
United Continental Holdings was created on October 1, 2010, upon the merger of Continental Airlines with United Airlines. Planes bore United's name, but United's "tulip" logo (actually a stylized "U," created by designer Saul Bass, who coincidentally also created Continental's former "meatball logo) was eliminated. Instead, plane tails received the crosshatched Continental globe.
Eventually, all services were operated under the United name with updated Continental branding, an attempt to demonstrate that this was a merger of equals. The very last Continental Airlines flight departed Phoenix (PHX) as CO1267 on March 2, 2012, and arrived in Cleveland (CLE) as UA1267 on March 3, 2012.
Two years after the merger, things were still looking good for the continuation of United’s hub at Cleveland Hopkins. "United is proud to call Cleveland a hub and serve the city's business and leisure travelers," said United spokesman Joe Micucci in Chicago in October 2012. "We continue our partnership with local business and community leaders to provide viable and sustainable air service for Cleveland."
United actually expanded its nonstop flights out of CLE. It added 10 daily nonstops during the summer of 2012: one daily flight each to Boston (BOS), Denver (DEN), Dallas-Fort Worth (DFW), Washington-Dulles (IAD), San Francisco (SFO), St. Louis (STL), and Portland, Maine (PWM); and three more daily flights to Chicago (ORD). On December 19, 2012, United re-introduced two daily nonstops to Nashville (BNA). Starting February 14, 2013, United again began flying nonstop to Oklahoma City (OKC).
Joe Roman, president and chief executive of the Greater Cleveland Partnership, said the message has changed from "Keeping the Hub" to "Growing the Hub" and increasing awareness of its importance to the business community.
The newly merged United soldiered on at Cleveland with about 200 daily departures for the next several years with an average of about 35 mainline flights and 165 regional flights per day to about 61 destinations. The airline averaged over 8,400 daily passengers and 3.1 million annual passengers (more than the big three Cleveland sports teams combined) in 2013.
Operationally, the CLE hub performed extremely well for the airline. For five months in a row in 2013, and for six of ten months starting in November 2012, the Cleveland hub won the United STAR Award for on-time performance. United created the STAR Award (Start the Airline Right) to encourage its hubs to put extra effort into getting the first flights of the day out on time, defined as within 15 minutes of their originally scheduled departures.
“The performance here is without a doubt the best, day in and day out, of all the hubs,” Charles Duncan, United’s vice president at Chicago O’Hare International Airport, said during a visit to Cleveland in September 2013. “On every measure we look at, Cleveland is the best. Coming from O’Hare, we look on with envy.” Cleveland also received the highest marks companywide in United’s email surveys asking MileagePlus frequent fliers about their flights into and out of the airport, although the company declined to share details. It was also announced that United’s shareholder meeting would be held in Cleveland in June 2014.
The End Came Quickly
The optimism of the past two years post-merger swiftly dissolved. On February 1, 2014, United Airlines told its employees in Cleveland in a letter from CEO Jeff Smisek that it would slash about 60 percent of the flights that depart from the city in a massive downsizing of what it called its unprofitable Cleveland operation. “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’s letter said. “We simply cannot continue to bear these losses.” He continued, no city has been as supportive as Cleveland, “but the demand for hub-level connecting flying through Cleveland simply isn’t there. We must make the right business decisions, even when those decisions are painful.” Contributing to these cuts were federally mandated changes to hiring requirements for regional pilots that disproportionally affected flights at the Cleveland Hub.
The incremental cuts would start in April and go through June 2014, and primarily impact regional flights out of Concourse D. Daily seats would drop 51% from 12,284 to 6,121. United intended to maintain 72 daily peak flights from CLE to 20 year-round destinations. Four seasonal destinations, including two international routes still flown today (Charleston-CHS, Cancun-CUN, Nassau-NAS, and San Juan-SJU) were also retained (see map below for details).
Additionally, 430 airport operations agents (mainly ticketing and ground crews), along with 40 catering staff, would lose their jobs in the cuts. United was able to maintain its pilot and flight attendant bases in Cleveland, as well as its technical/maintenance operations in Cleveland that work on mainline aircraft. Ironically, United’s inflight magazine, Hemispheres, featured Cleveland in a 56-page supplement within its February 2014, issue.
United Vice Chairman and Chief Revenue Officer Jim Compton said during a meeting with reporters and editors in February 2014, “The level of connecting traffic coming through Cleveland on regional jets simply cannot support a hub. We don’t create demand. We react to demand. Because of the losses over the last 10 years, it’s essential that we make this move,” he said. “And as difficult as this decision is, it was one that was well thought out over the past 10 years.”
No detailed financial results backing up these claims were ever produced by United, as the airline does not publicly break out financial results by market. However, several statements by Continental and United officials in the years prior to and after the merger seem to contradict the claim that Cleveland was a consistently unprofitable hub.
For example, in responding to the Greater Cleveland Partnership’s marketing effort in support of the hub dubbed “United for Cleveland’s Hub,” Greg Hart, United's senior vice president/network stated in June 2012, “Cleveland is to be commended” for encouraging customers to choose United Airlines. It is incredibly helpful.” He added, “Year over year, (Cleveland Hopkins International Airport's) performance is better than some other hubs in terms of profitability (emphasis added). The hub is in a far better place than it would have been without the efforts of the team in Cleveland.” (Click here for a more detailed list of these various comments about the value and profitability of the Cleveland Hub.)
Compton seemed to acknowledge that building Concourse D was a mistake, given the failure of regional jets to live up to their promise. “Terminal [sic] D served us in the strategies that we’ve had so far,” Compton said. “We’ll work with the city to determine what are the best ways to meet the needs of all parties. A lot of what we focused on — whether it was the hard work of the business community or some of the facilities — unfortunately, it just didn’t get us there.”
United shuttered Concourse D on June 5, 2014, moving all remaining flights to Concourse C. The 33-acre concourse on the east side of the airport was opened by Continental Airlines in May 1999, for use by its ExpressJet partner. The airline has continued to pay $1.11 million per month in rent to CLE and is obligated to continue these payments until 2027, regardless of its flight activity. The future of the concourse, which was used exclusively by United’s regional partners, has been the subject of much discussion.
Here is a gallery of photos of Concourse D taken by ExpressJet Captain Chris Belcastro on the final day of the concourse's operation. Captain Belcastro piloted one of the last planes to park there.
Cleveland Director of Port Control Ricky Smith stated that the concourse could be repurposed for mainline jet aircraft with relative ease. While Smith could not estimate the cost of such modifications, he said it would mean closing some gates to provide more wing space for larger planes, restriping, purchasing new jet bridges and reconfiguring passenger boarding areas. Smith also surmised that if United is paying for gates it is not using, it probably would consider a sublease to another carrier, subject to airport approval. The airport’s new strategic plan from 2021 calls for the newest concourse at Hopkins to eventually be demolished.
United also controlled all 25 gates on Concourse C but did not hold exclusive leases on all of them. This allowed the carrier to give up several gates on the lower end of C and focus its remaining operations in the newer, more spacious “banjo” area, along with Star Alliance partner, Air Canada. Of course, this means that all of United’s local customers must now make the long trek down Concourse C. Currently, American Airlines uses several former United/Continental gates as well as a few common-use gates, as do JetBlue and Alaska Airlines.
United Airlines finally drew down its hub at Cleveland Hopkins International Airport on June 30, 2014. CLE is unique (and not in a good way) in the airport world for having the same air carrier close a hub at its airport twice. For a story of the first United shutdown in the early 1980s, click here. Please stay tuned for a future article on the immediate aftermath of United’s hub closure and the rise of low-cost carriers at CLE.