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Cleveland, state assessing loss of United hub

By: THOMAS J. SHEERAN
February 2, 2014 Updated: February 2, 2014 at 4:17 pm
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CLEVELAND (AP) — State and local officials moved Sunday to assess the loss of 60 percent of United Airlines departures when the carrier drops its money-losing Cleveland hub.

The state of Ohio said it would try to reverse the decision, which will cost 470 jobs.

The loss had been feared at Cleveland Hopkins International Airport since United merged in 2010 with Continental, which had a hub in Cleveland.

The city-owned airport said Sunday it would not comment on the cutbacks announced in a letter from the airline's CEO to United employees.

Cleveland Mayor Frank Jackson's spokeswoman said Sunday the city is assessing the situation and will address the issue Monday.

"We received the information regarding United's announcement on air service reductions. We are reviewing the information and assessing the impact," spokeswoman Maureen Harper said in an email Sunday.

Ed FitzGerald, executive for Cuyahoga County, which includes Cleveland, said Sunday the county would help displaced workers and try to preserve air service.

"We will continue to focus on the future and work with the private sector and other government entities to increase air service to our area," he said in a statement.

Gov. John Kasich said Saturday night that the state would work to have United reconsider the decision.

"Hopefully this situation can be reversed over time and we're going to continue to work with United to try to eventually do that," he said.

"We've already set in motion outreach to the impacted employees and we'll have a team on the ground on Monday to start connecting them with the right state support and benefits."

Joe Roman, president and CEO of the Greater Cleveland Partnership representing the business community, said the group would try to replace the lost service.

"Our goal is to minimize the impact on travelers and to ensure convenient and affordable air service here," he said in a Partnership Web site posting.

"Therefore, we will now mount an aggressive effort to replace as many lost routes as possible."

Airline consultant Michael Boyd told The (Cleveland) Plain Dealer (bit.ly/1gDynI6) that carriers are not expanding in the United States and need fewer airports for connections to other destinations.

"The merger didn't take away the connecting hub, the economics of the airline industry did," he said. Among the bottom line pressures is the cost of jet fuel, Boyd said, that has made 50-seat commuters jets largely unprofitable.

The company's CEO Jeff Smisek said United's daily departures from the city will fall from 199 currently to 72 by June.

"We have no choice, given the level of continued losses we have suffered in Cleveland," the letter said.

United posted a message Sunday to customers and said Cleveland had been helpful in trying to save the hub.

"The city of Cleveland has been incredibly supportive of United and has tirelessly worked with us to try to make the hub profitable," the post said.

"This was an extremely difficult decision, but it is important to note that we will continue to be Cleveland's leading airline, providing great service to our customers."

The cutbacks will be in one-third increments in April, May and June, according to Smisek.

United said in November that it aims to cut $2 billion in annual costs in the coming year by shifting flights, making workers more productive, and improving its maintenance procedures.

Similar cutbacks have affected many other small hubs in cities such as Memphis, Cincinnati and Salt Lake City amid a wave of airline mergers over the last five years.

In June, Delta Air Lines Inc. announced it would be closing its Memphis hub, which it had inherited in its 2008 acquisition of Northwest Airlines. Delta already has a huge hub operation in Atlanta.

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