United Continental to reduce departures from Cleveland hub

Sun Feb 2, 2014 9:57pm EST

Customers of United wait in line to check in at Newark International airport in New Jersey, November 15, 2012. REUTERS/Eduardo Munoz

Customers of United wait in line to check in at Newark International airport in New Jersey, November 15, 2012.

Credit: Reuters/Eduardo Munoz

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(Reuters) - United Continental Holdings Inc (UAL.N), the parent company of United Airlines, plans to lower the number of daily departures from its unprofitable Cleveland hub starting in April because of insufficient demand, according to a memo to employees.

Average daily departures will fall by around 60 percent, leading to 36 percent less capacity based on seats, Chief Executive Jeff Smisek said in the memo.

"Our hub in Cleveland hasn't been profitable for over a decade, and has generated tens of millions of dollars of annual losses in recent years," Smisek said.

The reduction could result in up to 430 airport operations staff and 40 catering personnel losing their jobs, Smisek said.

A pilot shortage accelerated the decision to reduce flights, Smisek said.

New federal regulations implemented last year require more flight experience from pilots than previously needed, resulting in a shortage of pilots across the industry.

Local officials had expressed concern that United would drop Cleveland because the airline has a hub in its headquarter city of Chicago, and because the two cities are relatively close to each other.

But United plans to keep pilot and flight attendant bases there as well as technical operations, Smisek said.

United was formed by a merger of UAL and Continental in 2010.

(Reporting by Nivedita Bhattacharjee and Nicola Leske; Editing by Christopher Cushing)

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Comments (1)
TomMariner wrote:
The idiots running the government green lighted all of these airline mergers and reduced competition in most places to zero. Oh, wait, they gave up slots — which is exactly what the new monopolies want and the opposite of what is good for consumers. Pretty soon there will be like three non-stops and everything else will go through hubs so the surviving airlines can operate a whole year without an empty seat or a non-revenue passenger.

The answer of the regulators ought to be “You’re going out of business — good — some bunch that knows how to run an airline will buy your planes at a discount, hire your employees — and your shareholders — they get to lynch the CEO because he destroyed their investment.”

Feb 02, 2014 10:37pm EST  --  Report as abuse
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