masseybrown
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Re: UA in CLE: What's next?

Sun Sep 24, 2017 4:19 pm

toltommy wrote:
masseybrown wrote:
Eventually, if WN or somebody wanted to make CLE a smallish hub again, Concourse D could be turned into a nice 15-20 gate home for it. All it needs is a fairly cheap connector to the main terminal.


There are plenty of gates in the main terminal that could be used in such a case. UA is paying for more than they need. I suspect that their gate utilization is nowhere near max. Concourse D will never be used again. It would need retrofitted on the side that was designed for turboprops, and the existing jetbridges on the other side are configured for regional aircraft, not mainline. Concourse D should be repurposed (car rental center) or torn down, but only after UA has finished paying for it.


Yes, UA has more gates (14) than they need for 45-50 flights a day; but they RON a bunch of planes and use most of them for that. In addition, they recently renegotiated the Concourse C lease. They could have dropped more gates than they did. So either they wanted to preserve a cheap option to expand or they are gate-sitting; and I don't believe they are gate-sitting.

It's a mistake, however, to think CLE is full of empty gates. There are as many 10 free ones, but they are scattered in A and C Concourses; B is full. Of the free gates in A, a couple of them are operationally less desirable, so there is less there than you might think. Of the five common use gates in C, two are regularly used a couple of times a day by AA.

So if some airline other than UA wanted to expand, reopening D could be a quick and relatively cheap ($30 million?) way to do it. I'm not holding my breath, but it's a viable option and a reason not be in a rush to tear it down .
 
NWDALMSPDTW
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Re: UA in CLE: What's next?

Sun Sep 24, 2017 4:50 pm

masseybrown wrote:
toltommy wrote:
masseybrown wrote:
Eventually, if WN or somebody wanted to make CLE a smallish hub again, Concourse D could be turned into a nice 15-20 gate home for it. All it needs is a fairly cheap connector to the main terminal.


There are plenty of gates in the main terminal that could be used in such a case. UA is paying for more than they need. I suspect that their gate utilization is nowhere near max. Concourse D will never be used again. It would need retrofitted on the side that was designed for turboprops, and the existing jetbridges on the other side are configured for regional aircraft, not mainline. Concourse D should be repurposed (car rental center) or torn down, but only after UA has finished paying for it.


Yes, UA has more gates (14) than they need for 45-50 flights a day; but they RON a bunch of planes and use most of them for that. In addition, they recently renegotiated the Concourse C lease. They could have dropped more gates than they did. So either they wanted to preserve a cheap option to expand or they are gate-sitting; and I don't believe they are gate-sitting.

It's a mistake, however, to think CLE is full of empty gates. There are as many 10 free ones, but they are scattered in A and C Concourses; B is full. Of the free gates in A, a couple of them are operationally less desirable, so there is less there than you might think. Of the five common use gates in C, two are regularly used a couple of times a day by AA.

So if some airline other than UA wanted to expand, reopening D could be a quick and relatively cheap ($30 million?) way to do it. I'm not holding my breath, but it's a viable option and a reason not be in a rush to tear it down .


I thought UA was on the hook for all 14 gates for when they remodeled that part of the terminal? Are you suggesting UA could make a few adds in CLE?
 
masseybrown
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Re: UA in CLE: What's next?

Sun Sep 24, 2017 6:25 pm

^ At one point they (CO) were bound by provisions of the loan for rebuilding Concourse C, but I believe they got out of that a couple of lease revisions ago. There was a discussion of why they selected the banjo gates rather than the closer-in gates (that AA and B6 now use) and UA said it was a deliberate choice to be near the Club location and defended that 14 number, all of which led me to conclude they had other options.

CLE probably gave UA a good deal on the 14, so it wasn't too painful for the airline to hold excess gates.
 
Cointrin330
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Re: UA in CLE: What's next?

Sun Sep 24, 2017 6:32 pm

avi8 wrote:
How many flights did CO have at Cleveland during its peak? I can’t remember how CLE looked like post merger before they pulled the plug.


CLE as a hub peaked in 2007/08 when CO announced its last major expansion there and daily departures climbed to around 270. There were plans for further growth that were shelved because of the oil spike in 2008 and the concurrent global financial crisis.
 
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Re: UA in CLE: What's next?

Sun Sep 24, 2017 6:34 pm

NWDALMSPDTW wrote:
compensateme wrote:
Cointrin330 wrote:
The messy UA/CO merger, Smisek, or Cleveland's economic situation aside, the Cleveland hub would not have lasted. It wasn't profitable. It made sense only when CO was a stand alone airline in need of a midwest hub and RJ's went all jet and that trend was also what helped precipitate it's downfall. There is simply no need for a hub sandwiched between ORD and EWR/IAD which are much larger, have greater local O&D traffic. UA keeps a meaningful presence at CLE as a result of assets it has there or is still paying for. As someone who used the CLE hub from the early 1990's through to 2011, I always liked it because it was easy to connect through, not very exciting, but got the job done and allowed you to avoid congestion elsewhere in the system. As for non-hub cities served from CLE by UA, eventually, those will go with perhaps one or two remaining.


In an alternate universe in which CO continued as a standalone carrier, CLE may not have lasted as a hub. CO maintained for nearly a decade that CLE was not a financially successful hub, and data supports it: CLE peaked at about 6.6M enplanments in 2000, of which about 3M were local - and CO's share was around 1.2M. Low level of local traffic, large percentage of connection traffic and high-cost regional jets isn't the recipe for financial success -- and the situation continued to deteriorate as locals fled to CAK for relief, which FL turned into a small focus city.

Arguably the only reason CLE continued to reign as a hub for CO is because of its financial commitments (its facilities at CLE as well as regional jets & needing a place to use them) and opportunity cost (in other words, even though CLE was losing money, the losses would've been greater had CO closed the hub in the 2000s, due to its fixed financial commitments). CO simply did not need a Midwestern hub to be a successful airline.


Smisek and the then CFO remarked in 2014 when it was announced CLE was being axed as a hub that it had not been profitable for 9+ years.

Not saying I disagree, but could you provide some articles with CO talking about the losses of CLE? I haven't read many outside of the Bethune article above and would like to take a walk down memory lane if there are any out there.
 
SgtBarone
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Re: UA in CLE: What's next?

Sun Sep 24, 2017 6:58 pm

Eaton also has several large facilities in Milwaukee, so it's not surprising that UA serves this route. But yes, it will be interesting when WN also begins this route.
AGP ATL BCN BNA BOS CLE CLT DCA DEN FLG FLL FRA IAD IAH JAX LAX LGB MAD MCI MDW MKE MUC PHX RDU RSW SEA SJU SLC SNA TPA
 
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compensateme
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Re: UA in CLE: What's next?

Sun Sep 24, 2017 7:17 pm

NWDALMSPDTW wrote:
Not saying I disagree, but could you provide some articles with CO talking about the losses of CLE? I haven't read many outside of the Bethune article above and would like to take a walk down memory lane if there are any out there.


As mentioned by another poster, here's an article in which UA says the CLE hub was unprofitable for over the last 10 years of its existence:

http://www.cleveland.com/metro/index.ss ... ill_d.html

And if you want more, there's a wealth of information if you do a search - it was a hot topic here in the 2000s, with CO routinely claiming CLE was unprofitable and the CLE faithful decrying it was lies :). Of course, from a rational perspective, CO didn't spend hundreds of millions building CLE only to fabricate stories of its profitability because it developed some weird grudge.
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compensateme
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Re: UA in CLE: What's next?

Sun Sep 24, 2017 7:26 pm

masseybrown wrote:
Yes, UA has more gates (14) than they need for 45-50 flights a day; but they RON a bunch of planes and use most of them for that. In addition, they recently renegotiated the Concourse C lease. They could have dropped more gates than they did. So either they wanted to preserve a cheap option to expand or they are gate-sitting; and I don't believe they are gate-sitting. ... CLE probably gave UA a good deal on the 14, so it wasn't too painful for the airline to hold excess gates.


I disagree. CLE was adamant that they weren't going to allow UA off the hook for any monies owed; while UA ultimately returned a fair amount of real estate to CLE, they also extended their leases on remaining real estate into 2029. I suspect the deal struck between CLE & UA was to accept less money money (less obligations) for more later (longer terms on remaining obligations). I wouldn't be shocked to see UA rescind capacity before the grow it again, and I'd surprised if UA showed any hesitation in giving up gates.
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NWDALMSPDTW
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Re: UA in CLE: What's next?

Sun Sep 24, 2017 8:48 pm

compensateme wrote:
masseybrown wrote:
Yes, UA has more gates (14) than they need for 45-50 flights a day; but they RON a bunch of planes and use most of them for that. In addition, they recently renegotiated the Concourse C lease. They could have dropped more gates than they did. So either they wanted to preserve a cheap option to expand or they are gate-sitting; and I don't believe they are gate-sitting. ... CLE probably gave UA a good deal on the 14, so it wasn't too painful for the airline to hold excess gates.


I disagree. CLE was adamant that they weren't going to allow UA off the hook for any monies owed; while UA ultimately returned a fair amount of real estate to CLE, they also extended their leases on remaining real estate into 2029. I suspect the deal struck between CLE & UA was to accept less money money (less obligations) for more later (longer terms on remaining obligations). I wouldn't be shocked to see UA rescind capacity before the grow it again, and I'd surprised if UA showed any hesitation in giving up gates.


That is an interesting point. From my knowledge, the low C Gates are the only ones that United is not on the hook for payment wise. CLE was for sure going to make them pay every cent for Concourse D, no doubt about that. As far as how good of a deal they were given in regards to the banjo, who knows.
 
joeman
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Re: UA in CLE: What's next?

Mon Sep 25, 2017 1:17 am

compensateme wrote:
NWDALMSPDTW wrote:
Not saying I disagree, but could you provide some articles with CO talking about the losses of CLE? I haven't read many outside of the Bethune article above and would like to take a walk down memory lane if there are any out there.


As mentioned by another poster, here's an article in which UA says the CLE hub was unprofitable for over the last 10 years of its existence:

http://www.cleveland.com/metro/index.ss ... ill_d.html

And if you want more, there's a wealth of information if you do a search - it was a hot topic here in the 2000s, with CO routinely claiming CLE was unprofitable and the CLE faithful decrying it was lies :). Of course, from a rational perspective, CO didn't spend hundreds of millions building CLE only to fabricate stories of its profitability because it developed some weird grudge.

Even as a CLE person I'm not a total believer in the CLE profitability as CO and then UA eroded ops with focus on their more prestigious hubs. But since at least I don't believe everything a CEO or politician say, I found these in my website research that discuss other factors than a non CLE a.netter might read/consider, none of which was local propaganda:

https://webcache.googleusercontent.com/ ... clnk&gl=us

https://www.dansdeals.com/points-travel ... -a-decade/

https://skift.com/2016/06/14/united-air ... eland-hub/
 
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compensateme
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Re: UA in CLE: What's next?

Mon Sep 25, 2017 2:01 am

joeman wrote:
Even as a CLE person I'm not a total believer in the CLE profitability as CO and then UA eroded ops with focus on their more prestigious hubs. But since at least I don't believe everything a CEO or politician say, I found these in my website research that discuss other factors than a non CLE a.netter might read/consider, none of which was local propaganda:

https://webcache.googleusercontent.com/ ... clnk&gl=us

https://www.dansdeals.com/points-travel ... -a-decade/

https://skift.com/2016/06/14/united-air ... eland-hub/


As we've discussed in the past, these are propaganda pieces that largely take a collection of "facts" out of context.

For example, each blog piece refers to a "former United route planner" who claims CLE was profitable. What they fail to mention is that he worked for UA in the 1980s and wouldn't be privy to any knowledge of the financial performance of then-CLE hub (Schwieterman has been a college professor since he left UA in 1991 and has sold himself as a media "expert" on the airline industry since).

Another example: the article fails to address that Bethune made his comments when UA & CO were flirting with merger prospects. Reality is, Bethune knew CLE was likely unprofitable (he had threatened to dehub CO just months before his exit, and a few years before the quote was made). Bethune knew the pending CLE expansion was a derivative of the mainline fleet growing -> upgaguing at EWR and the need to fly the 50-seaters some place. But Bethune also knew that the chances of a Democrat being elected into office that year was fairly strong, and a Democratic administration may not have been friendly toward mergers. Thus, CO/UA had no time to waste -- imagine the backlash (delay) if CO/UA had acknowledged that CLE was a money loser and would likely be de-hubbed. Sometimes people lie... if you like your insurance, you can keep it! Bethune merely used a logical fallacy to dance around the topic.
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ATA1011Tristar
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Re: UA in CLE: What's next?

Mon Sep 25, 2017 2:41 am

NWDALMSPDTW wrote:
Okay everyone, I thought I was dreaming but UA is operating a flight CLE-MSN-CLE today. Just watched it rotate in MSN. UA 4136/3841 looking at the seat map it's a pretty full flight both ways.


Mmm, a special flight for Bengals fans to get to WI for the Packers game?
 
flight152
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Re: UA in CLE: What's next?

Mon Sep 25, 2017 3:42 am

ATA1011Tristar wrote:
NWDALMSPDTW wrote:
Okay everyone, I thought I was dreaming but UA is operating a flight CLE-MSN-CLE today. Just watched it rotate in MSN. UA 4136/3841 looking at the seat map it's a pretty full flight both ways.


Mmm, a special flight for Bengals fans to get to WI for the Packers game?

If that was the case they would probably be flying to GRB and leaving out of CVG.
 
flyua
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Re: UA in CLE: What's next?

Mon Sep 25, 2017 4:49 am

Every year, for the past several years, United operates nonstops to MSN from all of its hubs (and from CLE this year) to support Epic System's annual users' convention. This year, flights bring in the attendees on September 24th and take them back home on September 28th.
 
masseybrown
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Re: UA in CLE: What's next?

Tue Sep 26, 2017 5:17 pm

compensateme wrote:
joeman wrote:
Even as a CLE person I'm not a total believer in the CLE profitability as CO and then UA eroded ops with focus on their more prestigious hubs. But since at least I don't believe everything a CEO or politician say, I found these in my website research that discuss other factors than a non CLE a.netter might read/consider, none of which was local propaganda:

https://webcache.googleusercontent.com/ ... clnk&gl=us

https://www.dansdeals.com/points-travel ... -a-decade/

https://skift.com/2016/06/14/united-air ... eland-hub/


As we've discussed in the past, these are propaganda pieces that largely take a collection of "facts" out of context.


You could say the same thing about Smisek's comments. At the time of the hub announcement, UA was close to operational collapse. Nice going, Smisek.
 
plinth857
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Re: UA in CLE: What's next?

Tue Sep 26, 2017 6:05 pm

masseybrown wrote:
Yes, UA has more gates (14) than they need for 45-50 flights a day; but they RON a bunch of planes and use most of them for that. In addition, they recently renegotiated the Concourse C lease. They could have dropped more gates than they did. So either they wanted to preserve a cheap option to expand or they are gate-sitting; and I don't believe they are gate-sitting.
.


I had a late arrival Sunday night/Monday morning and most of the visible C gates were occupied - there were at least 12 UA aircraft and 8 AA aircraft (including the one I was on).
 
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mbm3
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Re: UA in CLE: What's next?

Tue Sep 26, 2017 7:20 pm

compensateme wrote:
NWDALMSPDTW wrote:
Not saying I disagree, but could you provide some articles with CO talking about the losses of CLE? I haven't read many outside of the Bethune article above and would like to take a walk down memory lane if there are any out there.


As mentioned by another poster, here's an article in which UA says the CLE hub was unprofitable for over the last 10 years of its existence:

http://www.cleveland.com/metro/index.ss ... ill_d.html

And if you want more, there's a wealth of information if you do a search - it was a hot topic here in the 2000s, with CO routinely claiming CLE was unprofitable and the CLE faithful decrying it was lies :). Of course, from a rational perspective, CO didn't spend hundreds of millions building CLE only to fabricate stories of its profitability because it developed some weird grudge.


UA was in the process of downsizing IAD in favor of CLE when Smisek made the surprise announcement about Cleveland. It surprised almost everyone in management, both in Cleveland and Chicago. Cleveland was an award winning hub in the Continental days, had lower operating costs, had several of the top performing routes and several of the top revenue customers. And yes, despite what many armchair CEOs claimed here on a.net, it also served a valuable role as a reliever for the megahubs. To this day there are many industry contacts of mine who do not have a clue why he decided to claim profitability issues with Cleveland given that official filings do not support his claim. Cleveland was simply the smallest CONUS hub and they needed to make Wall Street happy as well as adapt to the regional pilot shortage. Only Smisek can answer why he took the scorched earth tactics rather than be transparent.
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Trk1
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Re: UA in CLE: What's next?

Tue Sep 26, 2017 9:12 pm

United is the carrier with the most service from Cleveland. It will remain the largest carrier far into the future.
They do a good job with frequent service across the nation and most of the world. Why they cut the hub really does not matter
and what is the present is what does. 2MM on United- based in Cle and just fine with service level.
 
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compensateme
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Re: UA in CLE: What's next?

Tue Sep 26, 2017 9:15 pm

There's absolutely no truth to this, UA

mbm3 wrote:
UA was in the process of downsizing IA in favor of CLE...


UA was never "in the process" of downsizing IAD. The number of scheduled flights has been dropping, but that's a derivative of dwindling 50-seat jets (from IAD, the number of departures on 50-seaters has dropped by nearly two-thirds). Physical capacity and ASM has remained fairly consistent.

...when Smisek made the surprise announcement about Cleveland. It surprised almost everyone in management, both in Cleveland and Chicago.


Do you seriously believe this? UA is a large, publicly traded company. The decision to close CLE was likely gradually planned, as a result work, analysis & meetings amongst "everyone in management [in] Chicago." Their findings would've moved through the management ranks and board of directors before a decision would've been made. In other words... the recommendation to close CLE came from a management team well below Smisek. And while it might've surprised low-level employees in Cleveland, odds are that Cleveland's management team was fully aware of the direction UA was taking.

Only on a.net could Smisek himself be fully responsible for a shock decision. :cloudnine:

Cleveland was an award winning hub in the Continental days.


PIT won a ton of awards too in its lifetime, but unfortunately they don't generate profits. (Not that it was hard for CLE to beat EWR & IAH in operational metrics, anyway. It'd be pathetic if they didn't.)

CLE had lower operating costs...


False. CLE had among the higher fees in the country, a fact CO whined about for over a decade. When UA decided to close the hub, its landing fees and CPE was among the highest in the country (and that was several years AFTER they were lowered):

http://www.cleveland.com/metro/index.ss ... _airl.html

Nor is a hub built around high-cost 50-seaters going to have low operation costs -- the contrast is true.

...had several of the top performing routes and several of the top revenue customers.


Do you have any proof of this? The revenue produced by CLE's top routes in terms of local traffic was dwarfed by oodles of routes at EWR, SFO, ORD, IAH, DEN and even IAD. I doubt CLE's best performing route was anywhere near UA's top performing.

And yes, despite what many armchair CEOs claimed here on a.net, it also served a valuable role as a reliever for the megahubs.


Too bad it was redundant with IAD.

To this day there are many industry contacts of mine who do not have a clue why he decided to claim profitability issues with Cleveland given that official filings do not support his claim.


It sounds like your contacts are giving you bad information. Exactly what are those official filings? Fact is, CLE is a high cost airport, was comprised of high cost regional jets and was a low O/D operation. Not hard to figure out why it was unprofitable.

Only Smisek can answer why he took the scorched earth tactics rather than be transparent.


:crazy: :crazy: :crazy:
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NWDALMSPDTW
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Re: UA in CLE: What's next?

Tue Sep 26, 2017 10:20 pm

compensateme wrote:
There's absolutely no truth to this, UA

mbm3 wrote:
UA was in the process of downsizing IA in favor of CLE...


UA was never "in the process" of downsizing IAD. The number of scheduled flights has been dropping, but that's a derivative of dwindling 50-seat jets (from IAD, the number of departures on 50-seaters has dropped by nearly two-thirds). Physical capacity and ASM has remained fairly consistent.

...when Smisek made the surprise announcement about Cleveland. It surprised almost everyone in management, both in Cleveland and Chicago.


Do you seriously believe this? UA is a large, publicly traded company. The decision to close CLE was likely gradually planned, as a result work, analysis & meetings amongst "everyone in management [in] Chicago." Their findings would've moved through the management ranks and board of directors before a decision would've been made. In other words... the recommendation to close CLE came from a management team well below Smisek. And while it might've surprised low-level employees in Cleveland, odds are that Cleveland's management team was fully aware of the direction UA was taking.

Only on a.net could Smisek himself be fully responsible for a shock decision. :cloudnine:

Cleveland was an award winning hub in the Continental days.


PIT won a ton of awards too in its lifetime, but unfortunately they don't generate profits. (Not that it was hard for CLE to beat EWR & IAH in operational metrics, anyway. It'd be pathetic if they didn't.)

CLE had lower operating costs...


False. CLE had among the higher fees in the country, a fact CO whined about for over a decade. When UA decided to close the hub, its landing fees and CPE was among the highest in the country (and that was several years AFTER they were lowered):

http://www.cleveland.com/metro/index.ss ... _airl.html

Nor is a hub built around high-cost 50-seaters going to have low operation costs -- the contrast is true.

...had several of the top performing routes and several of the top revenue customers.


Do you have any proof of this? The revenue produced by CLE's top routes in terms of local traffic was dwarfed by oodles of routes at EWR, SFO, ORD, IAH, DEN and even IAD. I doubt CLE's best performing route was anywhere near UA's top performing.

And yes, despite what many armchair CEOs claimed here on a.net, it also served a valuable role as a reliever for the megahubs.


Too bad it was redundant with IAD.

To this day there are many industry contacts of mine who do not have a clue why he decided to claim profitability issues with Cleveland given that official filings do not support his claim.


It sounds like your contacts are giving you bad information. Exactly what are those official filings? Fact is, CLE is a high cost airport, was comprised of high cost regional jets and was a low O/D operation. Not hard to figure out why it was unprofitable.

Only Smisek can answer why he took the scorched earth tactics rather than be transparent.


:crazy: :crazy: :crazy:


One thing I will share is that I have personally seen the correspondence between UA and CLE when they decided to dehub CLE. The first pieces of information contained several grammatical errors and the wrong routes in which they would cut. It seemed to be very rushed and shortly after the announcement when they announced the routes to the media it was corrected and finalized. At the time it was a very rushed process and was not well planned out. I think everyone had the idea the CLE Hub had a death date, it just came a lot earlier than anyone was anticipating. My best guess is the writing was on the wall that with the pilot shortage and summer schedule coming up something had to go, and CLE just made the most sense. Maybe someone can find Smisek sitting in the back row of one of his wives Woman in Economics speeches and get the real information, he has nothing to lose at this point ;)
 
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compensateme
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Re: UA in CLE: What's next?

Wed Sep 27, 2017 3:07 am

NWDALMSPDTW wrote:
One thing I will share is that I have personally seen the correspondence between UA and CLE when they decided to dehub CLE. The first pieces of information contained several grammatical errors and the wrong routes in which they would cut. It seemed to be very rushed and shortly after the announcement when they announced the routes to the media it was corrected and finalized. At the time it was a very rushed process and was not well planned out. I think everyone had the idea the CLE Hub had a death date, it just came a lot earlier than anyone was anticipating. My best guess is the writing was on the wall that with the pilot shortage and summer schedule coming up something had to go, and CLE just made the most sense. Maybe someone can find Smisek sitting in the back row of one of his wives Woman in Economics speeches and get the real information, he has nothing to lose at this point ;)


Here's what I find fascinating: in order to win Ohio's approval for the merger, UA agreed to keep the hub open for at least five years or pay substantial penalties UNLESS they could approve -- to an independent auditor hired by Ohio -- the hub was losing money. So after three years UA pulled the plug on the hub, Ohio hired an independent auditor and the auditor determined that UA kept its terms of the agreement:

https://skift.com/2016/06/14/united-air ... eland-hub/

In other words, the auditor verified that the CLE hub was, in fact, unprofitable. Again... a Cleveland audit team hired by the state of Ohio determined that UA was being truthful in its claim that CLE was unprofitable. This should've really ended this nonsense, but it hasn't.

And yet a faction of the CLE faithful on here simply cannot accept reality and cling to this notion that Jeff Smisek was an evil, evil man who pulled the plug on CLE for no other reason than the fact he has it out for CLE.
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greenair727
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Re: UA in CLE: What's next?

Wed Sep 27, 2017 4:40 am

^Smisek was evil. Or at least incompetent.

The point of mergers is to make more money through economies of scale (and eliminating competition), meaning, in this case closing hubs. The minute the CO-UA merger was sealed, hubs and jobs had to go. That's the point of the merger. So they clearly wanted to close CLE as geographically its redundant once the combined airline had hubs at both EWR and ORD (not to mention also at IAD). But the airline can't look evil. or greedy. so they MAKE CLE unprofitable. That's VERY EASY to do if you control a business. Connections through CLE were more expensive, even if more direct, than other connections. Sometimes connections through CLE didn't appear until page 4 of UA's website, so to many would-be pax, it didn't exist. That's some of the obvious stuff. They could also overload it with staff. There are many many things a company can do to make a unit unprofitable, thus making it easier to eliminate. That's what Smisek did.
 
masseybrown
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Re: UA in CLE: What's next?

Wed Sep 27, 2017 5:09 am

We're not going to settle this hub closure business until Kellner or Smisek writes his memoirs; the people who know aren't talking. Meanwhile, I can't see UA adding flights at CLE ever, despite their 14 mostly empty gates and ability to do it for little more than the variable cost of flying. Any flight they could add might make money, but so would doing a half-dozen other things with the plane.

What could happen in CLE involves other airlines. WN seems to be adding routes regularly. AA has added DCA and LGA. Both have some room to grow. UA will shrink to ORD, EWR, IAD, and maybe DEN as soon as the dim bulbs schedulers in Chicago figure out what to do with the LGA and DCA slots.
 
joeman
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Re: UA in CLE: What's next?

Wed Sep 27, 2017 5:26 am

greenair727 wrote:
^Smisek was evil. Or at least incompetent.

The point of mergers is to make more money through economies of scale (and eliminating competition), meaning, in this case closing hubs. The minute the CO-UA merger was sealed, hubs and jobs had to go. That's the point of the merger. So they clearly wanted to close CLE as geographically its redundant once the combined airline had hubs at both EWR and ORD (not to mention also at IAD). But the airline can't look evil. or greedy. so they MAKE CLE unprofitable. That's VERY EASY to do if you control a business. Connections through CLE were more expensive, even if more direct, than other connections. Sometimes connections through CLE didn't appear until page 4 of UA's website, so to many would-be pax, it didn't exist. That's some of the obvious stuff. They could also overload it with staff. There are many many things a company can do to make a unit unprofitable, thus making it easier to eliminate. That's what Smisek did.

Lol scenarios non CLE faithful could never accept
 
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compensateme
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Re: UA in CLE: What's next?

Wed Sep 27, 2017 5:38 am

greenair727 wrote:
The point of mergers is to make more money through economies of scale (and eliminating competition), meaning, in this case closing hubs. The minute the CO-UA merger was sealed, hubs and jobs had to go. That's the point of the merger. So they clearly wanted to close CLE as geographically its redundant once the combined airline had hubs at both EWR and ORD (not to mention also at IAD). But the airline can't look evil. or greedy. so they MAKE CLE unprofitable. That's VERY EASY to do if you control a business. Connections through CLE were more expensive, even if more direct, than other connections. Sometimes connections through CLE didn't appear until page 4 of UA's website, so to many would-be pax, it didn't exist. That's some of the obvious stuff. They could also overload it with staff. There are many many things a company can do to make a unit unprofitable, thus making it easier to eliminate. That's what Smisek did.


joeman wrote:
Lol scenarios non CLE faithful could never accept


I realize you desperately want this to be true, but facts tell a different story: from the second half of 2010 until the announcement of the hub closure in 2014, CO/UA's enplanements and LF were consistent, which proves that any notion that UA "made" CLE unprofitable making its pricing unattractive thus 'forcing' potential passengers to be total B.S. Not to mention that the bread and butter of any legacy hub is walk-up fares, which would be similar no matter the connection point - put simply, UA doesn't make money selling $49 tickets to MCO.

masseybrown wrote:
We're not going to settle this hub closure business until Kellner or Smisek writes his memoirs; the people who know aren't talking.


They don't have to - facts speak for themselves.
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StuckinCMHland
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Re: UA in CLE: What's next?

Wed Sep 27, 2017 12:30 pm

I know this comment is a little off topic, but IMO if CLE wants to have a future with UA (or any other airline for that matter) they had better clean up the mess of an airport they have. The city government needs to get some competent people running the airport and get its grubby hands out of it. Then they need to really fix the facility so passengers can use it. Parking is a wreck, the terminal is awful, Terminal D needs to either be rehabbed and used (the better choice) or demolished, and they need to upgrade the infrastructure (baggage handling, etc.) into the 21st Century.

A new regional airport might be the better answer to keep UA around or even make it possible to 'rehub' there, but the facts on the ground as they are now make any expansion of UA at CLE a pipe dream.
 
izbtmnhd
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Re: UA in CLE: What's next?

Wed Sep 27, 2017 12:46 pm

Most of the people who crowed over the UA hub CLE closure were also saying that Hopkins enplanements would be severely reduced and that the airport was essentially dead. Some even said that CLE's passenger totals would be down to 4-5 million a year. They never saw WN expansion or F9/NK entering the market at the level that they did. They didn't see G4 moving ops from CAK to CLE. They certainly never saw WW/FI entering the market.

So great, you got one obvious thing right: UA was going to close the hub. Airport "gurus" you are! Congrats! It's been 3 years now, can you get over yourselves?
 
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compensateme
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Re: UA in CLE: What's next?

Wed Sep 27, 2017 2:07 pm

izbtmnhd wrote:
Most of the people who crowed over the UA hub CLE closure were also saying that Hopkins enplanements would be severely reduced and that the airport was essentially dead. Some even said that CLE's passenger totals would be down to 4-5 million a year. They never saw WN expansion or F9/NK entering the market at the level that they did. They didn't see G4 moving ops from CAK to CLE. They certainly never saw WW/FI entering the market.

So great, you got one obvious thing right: UA was going to close the hub. Airport "gurus" you are! Congrats! It's been 3 years now, can you get over yourselves?


I never "crowed" over the hub closure. But I see new, young posters who come to the forums seeking knowledge and ultimately end up believing nonsense/propaganda because there's little counterbalance. Shame on me for providing a factual argument! Fact is, an independent Cleveland-based audit team hired by the state of Ohio, after thoroughly reviewing the books for over a year, issued an opinion supporting UA's claims. That by itself should end the Cleveland Conspiracy Theories but nope, because the CLE faithful cling to the comments made by a network planner at a "FlyerTalk DO" as absolute proof Smisek is a liar. Imagine that -- at what was suppose to be a marketing event for UA's top FF, a question was about the future of CLE and a positive spin was given for an answer. What did you seriously expect him to say? 'Well, CLE hasn't performed to expectations in over a decade and it'll likely be de-hubbed..." well before UA was ready to make the announcement, thus alienating its consumers/airport/state? Yes, absolute proof Smisek is a liar! :drunk:
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masseybrown
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Re: UA in CLE: What's next?

Wed Sep 27, 2017 2:52 pm

compensateme wrote:
Shame on me for providing a factual argument!


I don't see your comments being any more fact-based than others'. You cite steady traffic, but you pick the sample dates; other dates would produce a different story. You cite an outside auditor who had to rely on UA assumptions and allocations; all he proved is that the numbers add up correctly. Whereas the other side of the issue cites multiple sources that contradict what UA said. Not even Smisek could keep his story straight. First he said CLE had bad O&D. When that was proved wrong, he said oops, no it has bad flow traffic. How can you wonder why the controversy persists?
 
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compensateme
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Re: UA in CLE: What's next?

Wed Sep 27, 2017 3:15 pm

masseybrown wrote:
I don't see your comments being any more fact-based than others'. You cite steady traffic, but you pick the sample dates; other dates would produce a different story. You cite an outside auditor who had to rely on UA assumptions and allocations; all he proved is that the numbers add up correctly. Whereas the other side of the issue cites multiple sources that contradict what UA said. Not even Smisek could keep his story straight. First he said CLE had bad O&D. When that was proved wrong, he said oops, no it has bad flow traffic. How can you wonder why the controversy persists?


For years you've been one of the more knowledgeable, fact-based posters within these forums and quite frankly I expect more from you.

The facts support UA's claims that CLE was a money-losing hub more so than the "other side's" claims that it was a very profitable hub. You're fully aware of what an audit is -- it isn't "proving the numbers add up correctly," it's verifying that the numbers given are accurate and add up correctly. Again... a Cleveland-based audit team hired by Ohio spent over a year performing a full analysis on the numbers UA provided and issued an opinion supporting UA's claims, they did not simply "add the numbers up"

Look at the facts the "other side" has presented -- Smisek made a shock announcement that surprised UA management (false), CLE was a low-cost airport to operate from (false), UA programmed its booking engine to discourage people from booking via CLE (false). The only "facts" that truly exist are quotes attributed to Bethune and Znotins -- but put those quotes in context. Bethune was attempting to sell the merger and presented a logical fallacy (and had left CO 4+ years earlier). Znotins was speaking informally at a "FlyerTalk DO." What did you expect him to say -- he HAS to protect UA's business interests, and his comments are't binding. People lie to protect business interests - I know that (I've actually been asked to tell a group of employees their jobs were safe when I knew it wasn't true), you know that.

As for my comments not being more fact-based... most of what I've written I've supported with numbers. Can't say that about "the other side."
Last edited by compensateme on Wed Sep 27, 2017 3:28 pm, edited 2 times in total.
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LifetimeGS
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Re: UA in CLE: What's next?

Wed Sep 27, 2017 3:23 pm

LF does not equal profit.
 
gwrudolph
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Re: UA in CLE: What's next?

Wed Sep 27, 2017 5:02 pm

I think the fact that they closed the CLE hub (vs. closing other hubs) substantiates the fact that based on the data they had available to them, it was the weakest hub. I'm a bit surprised that anyone would think United would close a hub if they thought that it (or many of its routes) was/were the most profitable relatively speaking.

Now, if we want to debate whether or not they should have kept CLE and all the other hubs open, I believe they saw other more lucrative short term or long term strategic opporunities such as rebuilding strength in some of the other hubs they'd allowed to dwindle (ORD, DEN, and LAX, for example) and further capitalizing on their strengths at some of their stronger hubs (SFO and EWR, for example). Given the mainline aircraft shortage, does anyone think they would have been able to make some of these other short and and long term hub investments without closing a weaker hub?

Referencing the discussion on IAD vs. CLE, I would say that troubled as IAD may be, United has a very good TATL gateway and local franchise at IAD. If they had elected to close IAD vs. CLE, there's no way that important part of their network could have been replicated at CLE and EWR (being slot restricted at the time), simply couldn't fully replace the IAD local/connecting traffic.
 
plinth857
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Re: UA in CLE: What's next?

Wed Sep 27, 2017 5:35 pm

As to UA's future in CLE, though, would there ever be a circumstance where they would expand (even if it is just a few flights)? I'm being serious, are there potential (realistic) scenarios that would result in growth rather than shrinkage?
 
ncflyer
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Re: UA in CLE: What's next?

Wed Sep 27, 2017 5:56 pm

Wish I had evidence to the contrary but since the hub closed there is no evidence whatsoever that UA is interested in anything but shrinking CLE. Though gradual, routes have only been taken away, not added. I’m glad at least seasonal to FL remains, and even though loads pathetic especially mid week, DCA and LGA are still hanging around. Unfortunately cle fortunes are tied to UA, which, unlike DL (IND, PIT, PDX), has no demonstrated zero interest in international outside of its hubs. Evidently UA feels there is more money to be made flying to secondary markets in Portugal from Newark rather than using that aircraft in cleveland.
 
gwrudolph
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Re: UA in CLE: What's next?

Wed Sep 27, 2017 5:59 pm

plinth857 wrote:
As to UA's future in CLE, though, would there ever be a circumstance where they would expand (even if it is just a few flights)? I'm being serious, are there potential (realistic) scenarios that would result in growth rather than shrinkage?


Maybe upgauge, but I don't see any additional cities being added. Excepting a very few flights (almost all of those few are in CLE), United seems to be focused on everything originating or ending at a hub vs. point-to-point and CLE is already connected to all of their hubs.
 
commavia
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Re: UA in CLE: What's next?

Wed Sep 27, 2017 6:07 pm

izbtmnhd wrote:
Most of the people who crowed over the UA hub CLE closure were also saying that Hopkins enplanements would be severely reduced and that the airport was essentially dead. Some even said that CLE's passenger totals would be down to 4-5 million a year. They never saw WN expansion or F9/NK entering the market at the level that they did. They didn't see G4 moving ops from CAK to CLE. They certainly never saw WW/FI entering the market.

So great, you got one obvious thing right: UA was going to close the hub. Airport "gurus" you are! Congrats! It's been 3 years now, can you get over yourselves?


Quite the rewriting of history. Nobody was "crowing" or celebrating the inevitable closure of CLE. Anybody serious knew that the experience in CLE post-hub would be just like those in RDU, BNA, PIT, STL, and on and on - more competition, lower fares, more O&D, less connections. This isn't hard - pretty much exactly what was predicted is what has happened.

plinth857 wrote:
As to UA's future in CLE, though, would there ever be a circumstance where they would expand (even if it is just a few flights)? I'm being serious, are there potential (realistic) scenarios that would result in growth rather than shrinkage?

ncflyer wrote:
Wish I had evidence to the contrary but since the hub closed there is no evidence whatsoever that UA is interested in anything but shrinking CLE. Though gradual, routes have only been taken away, not added. I’m glad at least seasonal to FL remains, and even though loads pathetic especially mid week, DCA and LGA are still hanging around.


United's approach to its domestic network, like AA's, seems primarily focused on bulking up its hubs. In that context, I'd say the fact that CLE has been able to retain the level of non-hub United flying it has is, in and of itself, pretty impressive. Although personally, I expect much of that will go away in coming years - and as such, I think United is more likely to, net-net, shrink versus grow at CLE relative to where it is today. The seasonal leisure markets seem particularly susceptible to the growing influx of low fare competition in the market, and even some of the business markets appear vulnerable. As more and more 50-seat flying comes out of the United network, it is quite easy to imagine how United would justify exiting a market like, say, CLE-BOS where JetBlue is now a viable competitor, or CLE-MKE where enough business traffic may well migrate to Southwest's new flight to render United's RJ unprofitable. And with respect to CLE-LGA and CLE-DCA, the business traffic on both routes is obviously big, but both routes are competitive, and there is an opportunity cost because of the slots tied up at both airports.

ncflyer wrote:
Unfortunately cle fortunes are tied to UA, which, unlike DL (IND, PIT, PDX), has no demonstrated zero interest in international outside of its hubs. Evidently UA feels there is more money to be made flying to secondary markets in Portugal from Newark rather than using that aircraft in cleveland.


On the contrary, CLE's "fortunes" are less tied to the hub carrier than they have been in years - there is a growing presence of new competitors on both domestic and international routes.
 
joeman
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Re: UA in CLE: What's next?

Wed Sep 27, 2017 6:26 pm

Many a.netters proclaimed that hubs no longer can work in "2nd tier" cities, but we have them (geography is the excuse) and they can't be so close together (but there are examples because maybe the O&D is just so rich).

Either way, Hub reduction post merger has been a fact of life and I'll automatically accept the findings of that publically undisclosed audit report, the superior word/knowledge of a.netters that are in the know that airline management is always transparently truthful, and go on with my life.
 
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mbm3
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Re: UA in CLE: What's next?

Wed Sep 27, 2017 7:04 pm

compensateme wrote:
There's absolutely no truth to this, UA

mbm3 wrote:
UA was in the process of downsizing IA in favor of CLE...


UA was never "in the process" of downsizing IAD. The number of scheduled flights has been dropping, but that's a derivative of dwindling 50-seat jets (from IAD, the number of departures on 50-seaters has dropped by nearly two-thirds). Physical capacity and ASM has remained fairly consistent.

...when Smisek made the surprise announcement about Cleveland. It surprised almost everyone in management, both in Cleveland and Chicago.


Do you seriously believe this? UA is a large, publicly traded company. The decision to close CLE was likely gradually planned, as a result work, analysis & meetings amongst "everyone in management [in] Chicago." Their findings would've moved through the management ranks and board of directors before a decision would've been made. In other words... the recommendation to close CLE came from a management team well below Smisek. And while it might've surprised low-level employees in Cleveland, odds are that Cleveland's management team was fully aware of the direction UA was taking.

Only on a.net could Smisek himself be fully responsible for a shock decision. :cloudnine:

Cleveland was an award winning hub in the Continental days.




PIT won a ton of awards too in its lifetime, but unfortunately they don't generate profits. (Not that it was hard for CLE to beat EWR & IAH in operational metrics, anyway. It'd be pathetic if they didn't.)

CLE had lower operating costs...


False. CLE had among the higher fees in the country, a fact CO whined about for over a decade. When UA decided to close the hub, its landing fees and CPE was among the highest in the country (and that was several years AFTER they were lowered):

http://www.cleveland.com/metro/index.ss ... _airl.html

Nor is a hub built around high-cost 50-seaters going to have low operation costs -- the contrast is true.

...had several of the top performing routes and several of the top revenue customers.


Do you have any proof of this? The revenue produced by CLE's top routes in terms of local traffic was dwarfed by oodles of routes at EWR, SFO, ORD, IAH, DEN and even IAD. I doubt CLE's best performing route was anywhere near UA's top performing.

And yes, despite what many armchair CEOs claimed here on a.net, it also served a valuable role as a reliever for the megahubs.


Too bad it was redundant with IAD.

To this day there are many industry contacts of mine who do not have a clue why he decided to claim profitability issues with Cleveland given that official filings do not support his claim.


It sounds like your contacts are giving you bad information. Exactly what are those official filings? Fact is, CLE is a high cost airport, was comprised of high cost regional jets and was a low O/D operation. Not hard to figure out why it was unprofitable.

Only Smisek can answer why he took the scorched earth tactics rather than be transparent.


:crazy: :crazy: :crazy:


I will believe my direct conversations with management and document review over your conjecture and hypothesizing. Try checking SEC filings, the operation cost of business at CLE (beyond landing fees) and the performance metrics of the hub. Close it because it was smallest, fine. Compose a story to look like a big boy to Wall Street is another. And that is exactly what happened.
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ncflyer
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Re: UA in CLE: What's next?

Wed Sep 27, 2017 7:39 pm

Have no inside info, but having worked with many auditors in my career they bring no black magic to the equation. Let us not discount the possibility that the auditors would have been hired as a big CYA for politicians who failed to retain the jobs. Have seen too many times when audit findings are preordained to consider them any kind of gospel. I really don’t have side in this debate except except to be cynical of that element of this debate.

No way for example could I see an auditor really being critical of how an airline allocates cost and revenue to a hub. What a complex proposition to begin with.

Cleveland’s fortunes are tied to UA because they are too big to allow the other US3 much of a presence, yet too small to introduce anything exciting such as transatlantic to LHR, CDG, FRA, etc. I love thes new flights to Iceland but I’m not surprised that other US markets are seeing more love to major business centers in Europe.
 
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compensateme
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Re: UA in CLE: What's next?

Wed Sep 27, 2017 8:48 pm

mbm3 wrote:
I will believe my direct conversations with management and document review over your conjecture and hypothesizing. Try checking SEC filings, the operation cost of business at CLE (beyond landing fees) and the performance metrics of the hub. Close it because it was smallest, fine. Compose a story to look like a big boy to Wall Street is another. And that is exactly what happened.


Please point me toward the "SEC filings" I should be looking for. (Hint: if the SEC filings disagreed with UA's public narrative, UA would've been sued by now.)

Please show me which operation costs would demonstrate that CLE was a low-cost airport to operate from (Hint: before you spew nonsense, you might want to look up the definition of CPE and study how it's calculated).

Please show me the financial performance metrics of the hub that have been released to the public (Hint: there is none).

I doubt you ever had any "direct conversations" with management (and that's putting it lightly) given the content of the conversation your reported happening.

ncflyer wrote:
Have no inside info, but having worked with many auditors in my career they bring no black magic to the equation. Let us not discount the possibility that the auditors would have been hired as a big CYA for politicians who failed to retain the jobs. Have seen too many times when audit findings are preordained to consider them any kind of gospel. I really don’t have side in this debate except except to be cynical of that element of this debate.


You're suggesting the audit firm risked its license to "CYA for politicians?" Seriously?
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joeman
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Re: UA in CLE: What's next?

Thu Sep 28, 2017 12:15 am

Always found a Smisek remark at the time of the CLE dehub interesting. He basically said passengers don't want to connect in CLE. That would be quite a different tone in the general public mindset than a.netter comments as they purported to pity the inevitable. Customer service and easy connections without the overcrowding was often cited as favorable. Like non elite flyers care where they change planes. Reminds me of the ill conceived fear of them caring about what kind of plane they were flying on when major airlines dared to experiment with TATL 757 outside CLE-LGW. Ya we all know there was a handful of other and short lived TATL 757 before the CLE experiment. The "nobody wants to theme" brought in comments on this forum and to other web sites citing higher fares connecting thru CLE.

True or false on these claims I'll accept the private audit finding numbers, whatever they are.

Everyone knows CLE was a huge dwindling/reducing priority before merger and more so after. The audit probably determined the loss numbers were materially correct. Management decisions affecting those numbers were not audited.

So for the nth degree time discussed in these forums CLE was the weakest hub at merger to the point its flow could easily be transferred elsewhere and mergers have naturally reduced the number of needed hubs especially when geographically too close - with the exception of EWR and IAD - because of all that O&D - and because EWR has limitations - despite reliever hubs not being a sound concept per a.net
 
greenair727
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Re: UA in CLE: What's next?

Thu Sep 28, 2017 1:36 pm

compensateme wrote:
You're suggesting the audit firm risked its license to "CYA for politicians?" Seriously?


You've said this several times now, which caused me to think you didn't quite get what many were saying on here (including your uncalled for jab at MasseyBrown). And then I thought, perhaps you were one of the auditors in the case, as you kept referring to the very personal side of an auditor's firm--losing a license. Either way, this is the point:

UA MADE Cleveland unprofitable. Whether or not CLE was the 'weakest hub' is not the point---even if it were it could be profitable---say EWR made $10M, and IAH made $9M, IAD made $3M and CLE made $2M---in this example CLE is the weakest, but not unprofitable. But many, including me, are saying, UA made CLE unprofitable....so a assume an unchanged number of aircraft movements and types at landing fees and rents and fuel and payroll constant. So the only variable is revenue. So, for an extreme example, take a pax looking to travel BUF to STL. CLE and ORD are the logical connection points. But UA priced it as follows (this is an example): BUF-CLE-STL-$2,000; BUF-IAD-STL--$300, BUF-EWR-STL--$300; and BUF-ORD-STL--$300. This is what UA did. So pax didn't take the Cleveland option even if they saw it as it was usually buried in the later pages on their website. So now, costs are constant, but revenue is down. No fudging of the books---it was accurate reporting---so an auditor see only that--that the numbers make sense. They don't see the policies behind the numbers. So, the Auditor's report means absolutely nothing in terms of what UA did behind the scenes to make CLE unprofitable.
 
flyguy89
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Re: UA in CLE: What's next?

Thu Sep 28, 2017 2:36 pm

greenair727 wrote:
compensateme wrote:
You're suggesting the audit firm risked its license to "CYA for politicians?" Seriously?


You've said this several times now, which caused me to think you didn't quite get what many were saying on here (including your uncalled for jab at MasseyBrown). And then I thought, perhaps you were one of the auditors in the case, as you kept referring to the very personal side of an auditor's firm--losing a license. Either way, this is the point:

UA MADE Cleveland unprofitable. Whether or not CLE was the 'weakest hub' is not the point---even if it were it could be profitable---say EWR made $10M, and IAH made $9M, IAD made $3M and CLE made $2M---in this example CLE is the weakest, but not unprofitable. But many, including me, are saying, UA made CLE unprofitable....so a assume an unchanged number of aircraft movements and types at landing fees and rents and fuel and payroll constant. So the only variable is revenue. So, for an extreme example, take a pax looking to travel BUF to STL. CLE and ORD are the logical connection points. But UA priced it as follows (this is an example): BUF-CLE-STL-$2,000; BUF-IAD-STL--$300, BUF-EWR-STL--$300; and BUF-ORD-STL--$300. This is what UA did. So pax didn't take the Cleveland option even if they saw it as it was usually buried in the later pages on their website. So now, costs are constant, but revenue is down. No fudging of the books---it was accurate reporting---so an auditor see only that--that the numbers make sense. They don't see the policies behind the numbers. So, the Auditor's report means absolutely nothing in terms of what UA did behind the scenes to make CLE unprofitable.

And I think this is the more obvious point: you have absolutely zero facts/proof to back up your claim that UA "made" CLE unprofitable while there's ample evidence and history otherwise. Everything you just posted above is purely made-up guessing on your part. And the claim that the audit firm colluded with politicians to let UA slide? That doesn't even pass the smell test considering the more obvious politically expedient thing to do to puff themselves up to voters was to go after UA for any potential breach in their agreement. Honestly, some of this conjecture regarding UA "making CLE unprofitable" borderlines on tinfoil hat nonsense at this point.
 
greenair727
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Re: UA in CLE: What's next?

Thu Sep 28, 2017 2:41 pm

^I PERSONALLY many times ran test flights on UA's website---and personally--not hearsay--saw UA making CLE the most expensive or difficult to find connection route even if it made the most geographic or minimal travel time sense. As for proof, it was my own analysis---I should have taken thousands of screenshots.....
 
flyguy89
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Re: UA in CLE: What's next?

Thu Sep 28, 2017 3:10 pm

greenair727 wrote:
^I PERSONALLY many times ran test flights on UA's website---and personally--not hearsay--saw UA making CLE the most expensive or difficult to find connection route even if it made the most geographic or minimal travel time sense. As for proof, it was my own analysis---I should have taken thousands of screenshots.....

Then you should be able to pull and show us all here DOT fare/loads/yields data for CLE over an extended period of time bearing out your conjecture...otherwise your amateur and anecdotal analysis amounts to a hill of beans and provides us zero insight other than what you say you saw at one specific snapshot in time.
 
greenair727
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Re: UA in CLE: What's next?

Thu Sep 28, 2017 3:17 pm

^I ran many tests--O&D, dates, etc.---not a specific snapshot. My point was that an auditors work can be sound, but doesn't necessarily reflect a that an action--by policy--was implemented.
 
flyguy89
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Re: UA in CLE: What's next?

Thu Sep 28, 2017 3:53 pm

greenair727 wrote:
^I ran many tests--O&D, dates, etc.---not a specific snapshot. My point was that an auditors work can be sound, but doesn't necessarily reflect a that an action--by policy--was implemented.

The, again, your conclusions should be supported by the reams of DOT data available from that time. Show us.

Anecdotal searches on UA's customer-facing website are meaningless without supporting fare/load/yield data to back it up.
 
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compensateme
Posts: 3279
Joined: Wed Jan 28, 2009 4:17 am

Re: UA in CLE: What's next?

Thu Sep 28, 2017 4:03 pm

greenair727 wrote:
You've said this several times now, which caused me to think you didn't quite get what many were saying on here (including your uncalled for jab at MasseyBrown). And then I thought, perhaps you were one of the auditors in the case, as you kept referring to the very personal side of an auditor's firm--losing a license. Either way, this is the point:

UA MADE Cleveland unprofitable. Whether or not CLE was the 'weakest hub' is not the point---even if it were it could be profitable---say EWR made $10M, and IAH made $9M, IAD made $3M and CLE made $2M---in this example CLE is the weakest, but not unprofitable. But many, including me, are saying, UA made CLE unprofitable....so a assume an unchanged number of aircraft movements and types at landing fees and rents and fuel and payroll constant. So the only variable is revenue. So, for an extreme example, take a pax looking to travel BUF to STL. CLE and ORD are the logical connection points. But UA priced it as follows (this is an example): BUF-CLE-STL-$2,000; BUF-IAD-STL--$300, BUF-EWR-STL--$300; and BUF-ORD-STL--$300. This is what UA did. So pax didn't take the Cleveland option even if they saw it as it was usually buried in the later pages on their website. So now, costs are constant, but revenue is down. No fudging of the books---it was accurate reporting---so an auditor see only that--that the numbers make sense. They don't see the policies behind the numbers. So, the Auditor's report means absolutely nothing in terms of what UA did behind the scenes to make CLE unprofitable.


I get exactly what you and others are saying: CO/UA forced CLE into profitability. But here's the problem: there's absolutely no supporting evidence to support your claims. Instead, you and others retort to MAKING THINGS UP.

Let's look at what you wrote above:
(1) If UA had overpriced CLE so that "pax didn't take the Cleveland option," then passenger numbers would've dropped. Instead, UA's available capacity, enplanements and load factor remained consistent from the last round of cuts in 2010 until the hub closure in 2014. In other words - what you're suggesting did not happen, otherwise available capacity and enplanements would've dropped.
(2) Cost accounting methods HAVE to follow GAAP which means they HAVE to be consistent and the auditors HAVE to check for this. In other words, in order for the auditors to have issued a favorable opinion for UA, they would've HAD to conclude that UA was consistently allocating & booking revenue throughout its network. In other words, what you're suggesting is nothing more than a pure fairy tale.

What you and others don't get (or won't accept) is that the available evidence supports CO/UA's claims more than it does yours. One poster above said he rejected the evidence as "hypothesizing" and said he'd stick with a facts -- you know, a "conversation with some high level UA executive" who told him things that anybody who took a business class in high school would've known aren't true.

You do realize CO spend hundreds of millions of dollars on CLE? You do realize UA's on the hook for nearly $15 million/a year in payments toward Concourse D, and millions more for real estate it really doesn't need? In other words, you're suggesting UA's committing itself to hundreds of millions in losses toward what was a profitable hub just because it (or ONE person) had a vendetta against CLE? Do you realize how delusional that is?
We don’t care what your next flight is.
 
joeman
Posts: 827
Joined: Fri Apr 22, 2005 11:55 am

Re: UA in CLE: What's next?

Thu Sep 28, 2017 8:55 pm

Just curious why CO announced a major expansion to CLE that started to happen in 2008 (soon killed and gutted below prior ops with the great recession) when the place was loosing money since 2004 or 10.years prior to the final hub closure. Were they really planning to allocate some resources to the a.netter coined "red herring" in an effort to improve performance rather than devoting all attention to IAH and EWR?
Last edited by joeman on Thu Sep 28, 2017 9:04 pm, edited 3 times in total.
 
joeman
Posts: 827
Joined: Fri Apr 22, 2005 11:55 am

Re: UA in CLE: What's next?

Thu Sep 28, 2017 8:56 pm

So much expertise out there someone should know
Last edited by joeman on Thu Sep 28, 2017 9:03 pm, edited 3 times in total.

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