STT757 From United States of America, joined Mar 2000, 16560 posts, RR: 52 Reply 1, posted (10 years 8 months 3 weeks 4 days 16 hours ago) and read 4467 times:
"Continental warns it will cut Cleveland flights unless business improves
By PAUL SINGER
The Associated Press
3/25/03 1:50 PM
CLEVELAND (AP) -- Continental Airlines will continue scaling back service to Cleveland unless regional business travel through Cleveland Hopkins International Airport increases, the airline's chairman said Tuesday.
Gordon Bethune, also chief executive of the Houston-based airline, warned that Cleveland could ultimately lose its status as hub for the airline, though he called that "worst-case scenario."
He said the airline, already losing passengers since the Sept. 11 terrorist attacks, has seen bookings drop again with the onset of war with Iraq. Of Continental's three U.S. hubs -- Cleveland, Houston and Newark, N.J. -- the airline is showing its biggest losses in Cleveland, he said.
"We have to survive," he said. "We're not going to go out and lose money providing services that people don't want. If you don't want it, then fine. We won't give it to you."
Bethune said the airline is switching to smaller planes at Hopkins to reflect the reduced demand and will suspend its direct flights from Cleveland to London beginning in October. The airline is now cutting back from seven to five flights a week to London, he said.
"In October we are going to discontinue it because it traditionally does not do well in the winter," he said. "Hopefully we will reinstate it again next spring," if demand picks up, he said.
Continental announced last week that it needs to cut $500 million in annual operating expenses. The airline also plans to cut 1,200 jobs throughout its 50,000-worker system, close some ticket offices and renegotiate contracts with suppliers. The company hopes to cut most of the jobs through attrition, leaves of absences and voluntary buyouts.
More layoffs are planned if war with Iraq is prolonged and air travel remains soft. Continental's flight attendant staff already has been reduced through company-offered leaves of absence and its maintenance work force is reduced by a previously announced hiring freeze.
Bethune made his remarks to reporters before delivering the same message to area business leaders at a meeting of the Greater Cleveland Growth Association.
Dennis Eckart, the association's president, said Bethune's warning "is not a threat, it's a statement of fact. We have to put business travelers in Continental seats to preserve our hub status."
Eckart said the association will work with the city to reduce the costs of operations at Hopkins, and work with businesses to ensure a steady flow of customers to Continental.
Maintaining hub status is as important as keeping the city's professional sports franchises, Eckart said."
Flyinryan99 From United States of America, joined Feb 2001, 1948 posts, RR: 10 Reply 4, posted (10 years 8 months 3 weeks 4 days 15 hours ago) and read 4279 times:
With the return of the Beechers and some feed at CLE, maybe things will perk up a ways. CLE doesn't seem to have much feed there when you consider that most major destinations out of CLE have the ERJs. I think with the increased feed by Commutair, revenues will definitely rise.
DCA-ROCguy From United States of America, joined Apr 2000, 4420 posts, RR: 35 Reply 8, posted (10 years 8 months 3 weeks 4 days 13 hours ago) and read 4103 times:
This speech is probably also a warning shot over Cleveland's bow about Hopkins. Have landing and rental fees there, some of the highest in the nation, been reduced?
Sadly, it's quite possible that CO could pull the Cleveland hub altogether; industry yields are not improving, and as Portcolumbus noted the CLE hub doesn't have the density of the bigger hubs around it.
If CO goes, though, and CLE has cut its fees, look for a big expansion by Southwest. Fees are why they haven't expanded as it is. And JetBlue might sniff around again--CLE fumbled them the first time, though I think that wasn't entirely accidental. Keeping CO happy is a very high priority, to the extent there's any competence in the management of CLE. If CO goes, JetBlue would probably be very welcome.
HlywdCatft From United States of America, joined Jan 2001, 5321 posts, RR: 7 Reply 12, posted (10 years 8 months 3 weeks 4 days 13 hours ago) and read 4037 times:
**Might this be the warning to CLE that if United shuts down CO will pull CLE and move Ops to ORD?**
No more likely moving to DEN. If AA doesn't go under, they would be too much competition at ORD. DEN they would have no competition except Frontier which I believe CO has a stake in, I could be wrong though.
Ncflyer From United States of America, joined Sep 2000, 449 posts, RR: 2 Reply 13, posted (10 years 8 months 3 weeks 4 days 13 hours ago) and read 4024 times:
Jim, do you know how many markets say they are on SWA's radar for huge expansion? Islip, RDU, New Orleans, BWI (with the terminal expansion), MDW (ditto), are all places rumored for big expansion on this forum and elsewhere, along with a new city in 2004. WN expands very very deliberately, and they are just as cautious as anyone else about expanding in an airline environment that is permanently altered. So I'm not holding my breath on that one, other than adding a few flights here and there. They don't have loads of airplanes on order. Believe me, I'd love to see SWA in Cleveland with bigger presence, as they are the most financially healthy airline out there, but SWA's network is pretty well established also. Yesterday I was on SWA to MDW and while my flight was full, BNA and STL loads leaving at the same time were terrible-- at 7AM on a Monday, one of the weeks' busiest times.
And CO moving to CMH? A main problem is that the midwest is oversaturated with hubs, and cleveland is by far the weakest one standing-- in terms of O/D (yeah I know PIT and CVG are smaller cities, but they surely have better support to their hometown airlines if for no other reason than they have been hubs for a long time). CLE's airport has been atrocious for too long to catch up to far better facilities in CVG, DTW, PIT, ORD. And CLE doesn't serve ANY unique destinations-- PIT has great coverage in small PA and NY markets, DL has excellent coverage of Ohio Valley and appalachian regions out of CVG, DTW is fantastic O/D market and also has good coverage to upper midwest. Heck, even MDW is a terrific new terminal and offers excellent low fare nonstops to the west coast which CLE can't match. CLE's coverage is so sparse as to not offer anything special or different to connecting passengers. I just don't see CMH offering a single thing to resolve any of these issues.
So I'm not optimistic for CLE-- the airline industry is overcapacity, the weakest hubs have to go, and CLE is #1 on the list of the weakest ones left. CO would gladly shut it down and operate with 2 hubs cause Gordon is pretty good about running his income statement first and not being concerned with being the biggest one out there.
Heavymetal From , joined Dec 1969, posts, RR: Reply 14, posted (10 years 8 months 3 weeks 4 days 12 hours ago) and read 3993 times:
I've lost so much respect for this guy in the past year.
'Mr. Turnaround' was the hottest CEO going when times were phat and he was flying those shiny new Boeings out of the factory to carry those high revenue suits around.
Then comes 9/11, the fires are still raging and he's screaming for federal money.
Then he spends last year spouting off about how it seems no other airline except CO is worthy of a federal bailout.
Now, he's being Mister Alpha Male with a community that has paid to build infrastructure for his RJ experiments and expanded it's airport for his international whims. And he's reduced to a petty, childish "If you don't want it, then fine. We won't give it to you."
Then move, smartass. Find the city where the worst economy in 30 years hasn't reached. What's the airport code for Valhalla? At least they'll be rid of your cranky rants.
Artsyman From United States of America, joined Feb 2001, 4745 posts, RR: 36 Reply 15, posted (10 years 8 months 3 weeks 4 days 11 hours ago) and read 3919 times:
Then he spends last year spouting off about how it seems no other airline except CO is worthy of a federal bailout.
Actually, he has spent the last year saying that he doesnt want bailout money, he has said that he doesnt want to pay all the added security taxes that we now have to pay post 9.11. Continental is also 8-9% more efficient than the rest of the majors as far as costs.
It's funny, I remember on this message board pre -9.11, everyone was complaining that Continental were underpaying their employees and soon they would have to pay loads more to stop a revolt. Now, you complain that they pay too much and the model is all wrong... yet, still no employee revolt.
Continental employees in general, love Continental and there will be no revolt. Yes there will be disgruntled employees, but they exist at all companies
ContinentalEWR From United States of America, joined May 2000, 3762 posts, RR: 14 Reply 16, posted (10 years 8 months 3 weeks 4 days 9 hours ago) and read 3792 times:
You cannot compare CLE to CMH. CO's CLE hub, smaller now than it was at its height in 1999, is still many times larger than what HP had at CMH. Objectives were also much different. CO's CLE hub is generally billed as a hassle free, less congested alternative to Midwest hubs like ORD, DTW, etc...but it is also a major intra-Mid West traffic hub. Unfortunately for CO, the facilities are outdated, despite a major overhaul of Concourse C in the early 1990's and the addition of Concourse D. The runways cannot accomodate higher capacity aircraft for long haul routes and the Cleveland economy is probably not that good at the moment.
HP on the other hand used CMH as a way to connect traffic from Phoenix and Las Vegas, its two hubs, to East Coast cities like New York, Newark, Boston, etc...It became obsolete as soon as HP acquired A319 and A320 aircraft that had the range to fly nonstop. HP had at most 35-60 departures a day at CMH, whereas Continental has about 200-250 daily departures out of CLE.
Finally, CLE is outsized by CVG, DTW, and ORD, which have many more flights and perhaps a larger population pull, although Cleveland is bigger than Cincy. There are also more direct long haul flights to the West Coast, Europe, and Asia from most of the above mentioned competitor hubs. CLE also competes with PIT, which is about 150 miles away and Southwest flies into CLE, which helps to drive down fares on some routes, which is not a good thing given that Hopkins has very high landing fees, making it harder for CO to break even.
I hope Continental doesn't leave Cleveland. I went to college nearby in the late 1980's through the early 1990's and watched CO build up its presence there, renovate and expand, and do a lot more than most other carriers there. However, it is clear that CO's hubs at EWR and IAH are much more profitable and have critical mass. Perhaps, if UA folds, CO will look at the possibilty of swapping CLE for DEN.
777gk From United States of America, joined Jun 2000, 1641 posts, RR: 19 Reply 17, posted (10 years 8 months 3 weeks 4 days 9 hours ago) and read 3742 times:
I can tell that many "experts" have lost their respect for Gordon over the last year, but I can guarantee to you that the opinion of these people has very little bearing on the decisions he will make as the leader of this airline.
Gordon has a confident, "tell-it-like-it-is", almost cocky attitude, which in good times won him a lot of respect and established him as almost a living legend in the airline industry. By that same token, in bad times, his style has gained him quite a few enemies for telling people exactly what they didn't want to hear, even though his statements usually are pretty close to the mark. We caught most of the flak for announcing the first cutbacks after 9/11, being the first to call for a federal bailout, remarking that the failure of a key few airlines will stabilize the market, and being the first to announce a new series of temporary war-related cutbacks. While Continental gets the most recognition for these moves, most other airlines followed suit and most on an even larger scale, only without the negative response received by those of us here at CO. And regarding his comments about the "market choosing its own winners and losers", well, he echoes the sentiments of most people here at Continental, Northwest, Delta, and other relatively well-positioned airlines, just that he is the only person who will publicly state it.
Gordon's high profile has made him out (almost undeservedly) to be the scapegoat of the post-9/11 airline industry malaise. While some people will criticize his handling of the situation, the undeniable reality is that Continental is in the best position out of the majors, and in the situation that we are faced with right now in this industry, I think you would be hard-pressed to find a more suitable leader for an large airline than Mr. Bethune. When this is all said and done, there is a good chance that Continental will still be operating, and, that being our primary objective at this time, would make his tenure with this airline legendary, at least within those of us who work for him.
DCA-ROCguy From United States of America, joined Apr 2000, 4420 posts, RR: 35 Reply 18, posted (10 years 8 months 3 weeks 4 days 5 hours ago) and read 3610 times:
What effect would the loss of the CLE hub, should that happen, have on CO's status as a major network carrier? They would be down to two major hubs, which granted are very successful and well located. CO pretty much doesn't "connect dots" either; most flights (other than Micronesia, etc) would be either EWR or IAH.
Is that really critical mass for a USA Cartel-network type carrier? Bethune, I think, would have to pray for UA's demise, since DEN is excellently located to complement EWR and IAH, and would give CO much better overall national coverage.
Artsyman From United States of America, joined Feb 2001, 4745 posts, RR: 36 Reply 19, posted (10 years 8 months 3 weeks 4 days 5 hours ago) and read 3606 times:
While Continental would love to see CLE / KCLE), USA - Ohio">CLE survive, CLE / KCLE), USA - Ohio">CLE has to help out. At the moment the landing fees are way out of proportion for what is offered. At the end of the day, Continental has to make profits, and if Cleveland isnt growing, making money, then it needs to go. What is the logic in keeping it ? Even if Den doesnt come up, CLE / KCLE), USA - Ohio">CLE has to be worth keeping in order to keep it.
The days of airlines keeping routes / hubs to be everyones friend as opposed to making money are done
Soku39 From United States of America, joined Nov 2000, 1797 posts, RR: 9 Reply 20, posted (10 years 8 months 3 weeks 4 days 5 hours ago) and read 3603 times:
"I think Bethune is just making moves to have an excuse to ferry all those planes to Denver if things continue down the same track with UA"
LV the only problem with saying that is: we have some of the highest landing fees in the country. God knows why (maybe for that waste of a behind schedule runway). Also you must not have flown through here in awhile or if you did ya mighta missed the ductape holding the carpets together. If I was Bethune I'd want Denver over the hell hole that CLE is. So an exscuse maybe, but a damn good one.
P.S. Jane Cambell better get CLE management back together since Mike White screwed it up, and please get B6 to fly here.
Alpha 1 From , joined Dec 1969, posts, RR: Reply 21, posted (10 years 8 months 3 weeks 3 days 23 hours ago) and read 3451 times:
Everyone seems to be jumping to conclusions that CLE's demise is imminent, which, I think, it is not, for several reasons.
1. The economic climate. Right now, with all the losses being incurred by the carriers, opening a new hub is probably economically not viable at the moment. With red ink flowing, putting out the costs of relocating a hub is probably prohibative.
2. CO has invested hundres of millions of $$$ into CLE, and will not abandon it unless absolutely forced to.
3. CLE takes a lot of pressure off of EWR, and to give it up would leave a large hole in midwest service, despite certain people saying it doesn't serve any "unique" markets. A hub's job isn't to serve "unique" markets, it's to fly to markets that best serve the airline into making a profit. Unique markets are great, but you don't fly to a market simply for it's uniqueness.
Closing CLE would leave a huge gap in the Midwest, leaving CO as the only major without a Midwest hub. Despite the fact that some on here seem to belittle that service, it would leave a huge gape in the CO route system.
CLE can still work, but it may take time to undo all the damage that Mayor White and his hacks have caused. CLE needs to take better care of basic maintainence. CLE needs to forster a better relationship with it's carriers, especially CO. Northeast Ohio needs to reconsider whether it's air travel is best served by a land-locked facility, or if it should move the airport, preferably southwestward, into Lorain County. CLE needs to make sure that pro's, not political apointees, are permanently in charge of the airport.
This was a warning shot. CLE has until the end of this year, or early next year, to show a real committment to CO. CO has put up with 15 years of a less-than-stellar attitude from the city. CO get's top-of-the-line treatment in EWR and IAH, and is simply growing weary of a city that doesn't seem to embrace it. That will either change, or, when conditions get better, the hub will be moved or closed.
And, despite the fact that WN will probably increase service no matter what, and that B6 could come in, if CLE loses another hub for the 2nd time in 25 years, it may never regain the status of "hub" again.
Alpha 1 From , joined Dec 1969, posts, RR: Reply 23, posted (10 years 8 months 3 weeks 3 days 23 hours ago) and read 3423 times:
OPNLguy, you didn't read what I said. This is nothing imminent. He wouldn't make a statement like he made yesterday, then move it in two weeks. He's giving CLE time. CLE deserves the chance to help make things better.
Plus, at a meeting with the VP running CLE, employees were told that CO would increase service dramatically if UA shuts down DEN, but there are no plans for a full-fledged hub at this time.
OPNLguy From , joined Dec 1969, posts, RR: Reply 24, posted (10 years 8 months 3 weeks 3 days 23 hours ago) and read 3415 times:
Oh, I read what you said alright, and my opinion (which is -not- based on any two-week timeframe) stands as is.
Given that UAL is not hedged on its fuel, and fuel is going down (oil down to $26 a barrel I do believe), I think they'll be around longer than a couple of weeks. Whether the amount of time that UAL will be around corresponds to how much time Gordo is giving CLE to improve, I can't say precisely. I do think the two are interrelated.
25 Alpha 1: I look at it this way OPNLguy: if Gordon wasn't interested in really giving CLE time, he wouldn't have taken the time out of his schedule to meet with
26 EA CO AS: P.S. Jane Cambell better get CLE management back together since Mike White screwed it up Wasn't it Kathleen Keefe who screwed up CLE?
27 FrequentFlyKid: Being a Cleveland area resident this doens't suprise me. He is absolutely right. CLE's fee's are too high across the board. They do need to be lowered
28 Alpha 1: Jane Campbell is Mayor of Cleveland, EA CO AS. Kathleen Keefe was Station VP for CO, and her tenure there was not well received by the employees. The
29 DCA-ROCguy: I look at it this way OPNLguy: if Gordon wasn't interested in really giving CLE time, he wouldn't have taken the time out of his schedule to meet with
30 MasseyBrown: FrequentFlyKid, aren't CAL, DAL, and NW planning to honor each other's FF plans? You can probably do whatever you want (CAL or DAL) without hurting yo
31 EA CO AS: Jane Campbell is Mayor of Cleveland, EA CO AS. Kathleen Keefe was Station VP for CO, and her tenure there was not well received by the employees. Than
32 Soku39: EA CO AS It was definitely Mike White who screwed us up (but thanks for the commuter terminal) First White wanted to take out the IX center. No one wa
33 FrequentFlyKid: I agree that ex-Mayor White is primarily to blame, if blame can be assessed at all.
34 STT757: CLE is EWR's 4th runway, EWR in '99 was at capacity. And when things pick up again EWR will get back to capacity, they need CLE to relieve the traffic
35 Boeingfan: The Continental (CO) team will keep CLE if the business is there. CO will move some resources to ORD and some to DEN (though DEN has some of the highe
36 MAH4546: If CO did pull out of CLE, they will be left with alot of domestic N/S service choice: MEM, DFW, DTW, PIT, ORD, JFK, CVG, STL, ATL, EWR, IAH, IND, BOS
37 Ncflyer: To those who say CO won't shut down CO because of all the money CO has invested at the airport-- every heard of SUNK costs. That money is gone, it's s
38 PSU.DTW.SCE: Going by the current schedule here is what is going on at CLE for CO: ABE 3x (ERJ) ALB 4x (ERJ) ATL 5x (ERJ) AZO 4x (BE1) BDL 4x (ERJ) BNA 3x (ERJ) BO
39 Ncflyer: And that's a Monday Thursday Friday schedule. Go to midweek or Saturday Sunday and it gets a heck of a lot more sparse than that. For example, on Wedn
40 Ual777contrail: What is the biggest plane that CO takes into CLE? ual 777 contrail
41 ConcordeBoy: and even then, not for long... MSY and a few others set to go RJ soon
42 ConcordeBoy: What is the biggest plane that CO takes into CLE? their 752A/752ET are the biggest aircraft scheduled regularly into CLE.
43 STT757: The bigges planes CO flies into CLE are 757s.