United’s decision could bring lower fares, longer travel times | Kent State University

United’s decision could bring lower fares, longer travel times

United Airlines’ decision to reduce its operations at Cleveland Hopkins International Airport could mean lower fares for many consumers, but that would be because travelers are forced to book less desirable flights with longer flight times and multiple connections.

That’s the conclusion of Kent State University’s Lockwood Reynolds, an assistant economics professor who follows the airline industry.

Reynolds said cities that were downgraded from “hub” status, including Pittsburgh, saw average rates go down.

“Part of the reason for that is there is a sort of premium on fares for flights from a major hub,” he said. “When you have a hub, the advantage is that you get direct flights to lots and lots of places, so, essentially, more options. The downside is that you tend to pay a premium for it. So when the hub status goes away, they can’t charge a premium.”

He also said those airports tend to see other airlines come into the market or add flights to already established schedules. Those airlines often offer discount fares.

“You can get anywhere you want,” he said. “It just depends on how inconvenient it’s going to be, how long it’s going to take and how many connections you will need to make.”

In a letter to its Cleveland customers, United said it will continue to offer as many as 72 daily flights from Cleveland and serve 20 destinations nonstop. It specifically mentioned New York-LaGuardia, Washington-Reagan and Boston. It currently offers 199 flights out of Cleveland.

The airline also acknowledged it will be telling some customers who have already booked flights after April that they will be rescheduled.

“We will reaccommodate any customer affected by the schedule changes and we will notify those customers of their proposed new itineraries.”

Reynolds said penny-pinching customers might be happy, but others not so much.

“Consumers who value low prices and don’t care as much about the time commitment, they could end up being pretty happy by the dehubbing process,” he said. “Consumers who would be willing to pay a little bit more for the convenience might be a little less happy.”

The airline’s letter said “this is a business decision resulting from more than a decade of financial losses. The City of Cleveland has been incredibly supportive of United and has tirelessly worked with us to try to make the hub profitable.”

The move has been anticipated since United’s merger with Continental was approved by the U.S. Justice Department in 2010, but Reynolds said it’s still a dent in Cleveland’s image.

“The corporate headquarters that was thinking about leaving already, this doesn’t help us keeping them,” he said. “This doesn’t change anyone’s mind about whether they want to be here, more than likely, it depends on their business, I guess. I think the bigger problem is more of trying to attract a corporate headquarters becomes a little more difficult. … It doesn’t help the sales pitch. But that sales pitch involves a lot of other things, not just the airport hub.”

Reynolds was unable to predict the decision’s effect on Akron-Canton Airport.

Some customers looking for premium flights might go to the airport in Green instead. Some discount fliers might skip CAK and go to Cleveland.

Kristie Van Auken, spokeswoman for Akron-Canton, declined to comment until Cleveland Mayor Frank Jackson responds at a news conference today.

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POSTED: Sunday, February 2, 2014 - 12:00am
UPDATED: Tuesday, August 9, 2016 - 8:34am