I posted an article to Twitter recently about how United was planning to shut down its hub at Cleveland Hopkins. I wasn’t planning to blog about it – after all, it’s not exactly health care or public health related – but an article in the Pittsburgh Post-Gazette about how Pittsburgh can sympathize with Cleveland caught my attention. The article reports that a group of prominent business organizations were touting the United magazine spread about their wonderful city as a hub for the airline – two days before United announced that it would be slashing flights. Yes, Pittsburgh went through a similar disappointment and betrayal by USAirways, but after reading the article, I couldnt help but wonder if perhaps Cleveland was being a little too smug?
United Airlines decision to abandon Continental’s old hub at Cleveland shouldn’t have surprised anyone. United claims the hub is a money losing operation; no doubt the hub was a money-loser under Continental, and the city of Cleveland’s fortunes haven’t exactly been stellar in recent years. But further more, Cleveland should have looked at the writing on the wall. If recent history serves us right, the airline industry is rife with examples of medium sized cities in the nation’s heartland being stripped of their hub status. St Louis lost hub status after American took over bankrupt TWA, Pittsburgh (a mere two hour drive from Cleveland) saw enormous reductions and loss of hub status shortly after USAirways merged with America West, and Delta just dumped Memphis this past summer having gained the Tennessee hub from its 2008 merger with Northwest.
Promises from the airline industry that mergers would bring “additions, not subtractions” have thus far largely been untrue – one only need look at St Louis, Pittsburgh, and Memphis as prime examples. Even Delta’s Cincinnati hub has seen dramatic cutbacks from it’s hub heyday under Northwest The only bright spot for some of these cities has been the addition of “low-cost carriers” like Southwest, JetBlue, and Spirit. But with the impending merger of American and USAirways, certainly other hub cities should be nervous. After all, upper management at the new combined airline will be largely spearheaded by USAirways executives – the very executives who slashes Pittsburgh and quietly let go of Las Vegas as hubs when USAirways and America West joined forces. Additionally, many of the American and USAirways hubs are located relatively close to one another – potentially putting a number of them on the chopping block. Certainly the new airline will not want to maintain expensive hub operations at close geographic cities like New York/Philadelphia and Phoenix/Los Angeles. And while Charlotte and Miami may not be geographically close, they play a similar role for both airlines in feeding an extensive Caribbean network. Phoenix, however, may have the most to worry about – geographically, it’s between American’s home airport of Dallas/Fort Worth and Los Angeles, a huge market where American is now the largest airline.
Much like health care, the airline industry is again consolidating – a move that only produces winners and losers. Some of these cities (Phoenix, Charlotte) were winners in the last wave of mergers, and may soon find themselves losers in the airline wars. Time will only tell if new airlines will sprout up to fill in the gaps left by the legacy carriers and what role the “low cost” behemoths Southwest and JetBlue will play.