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CRAIN’S CLEVELAND BUSINESS
WWW.CRAINSCLEVELAND.COM
JUNE 25 - JULY 8, 2012
United: Other cities have suffered after losing airline hubs continued from PAGE 1
United’s senior vice president/network. “It is incredibly helpful.� He added, “Year over year, (Cleveland Hopkins International Airport’s) performance is better than some other hubs in terms of profitability. The hub is in a far better place than it would have been without the efforts of the team in Cleveland.� Guidelines on the “United for Cleveland’s Hub� website suggest that small and midsized businesses allow employees to choose United when the carrier’s flight is within $200 of the competing lower airfare. Large corporations, the guidelines suggest, should consider a threshold as high as $300.
“Our anecdotal experience would suggest we’ve got several hundred companies now trying to do that,� said Joe Roman, president of the Greater Cleveland Partnership. “We’re seeing people creating those policies.� Following on that effort, United also is making a push to sign up Northeast Ohio companies to its RewardOne and PerksPlus programs, the corporate equivalent of frequent flyer reward programs. Evan Koppel, United’s Cleveland-based regional sales manager, said his sales staff is getting a positive response from their business clients. “Of those companies (the sales staff has contacted), we’re pretty pleased with our performance,� he
said. “What we are seeing in the community is a heightened awareness of how important this whole initiative is.�
Freshening up the place Mr. Roman said the focus of the marketing campaign is convincing businesspeople and business travel decision makers who buy the largest chunk of premium airline tickets — the kind that generates most of an airline’s profit — to fly United from Cleveland Hopkins even if it means paying a little more than a ticket on another airline or at another airport. In addition to a website (http://tinyurl.com/87c69xk), GCP is communicating regularly with its
14,000 members and is advertising on radio stations WCPN-FM 90.3 and WTAM-AM 1100. The marketing effort is designed to stay ahead of the game and avoid the fate of cities such as Cincinnati and Pittsburgh that have lost hubs in the last few years after their hub airline merged with another air carrier. In May 2010, Continental Airlines, which operated a hub at Cleveland Hopkins for several decades, announced it would merge with United, prompting fears the hub would be lost. Cleveland Hopkins itself is an active participant in the preservethe-hub effort, spending $60 million this year, and $530 million over five years, to improve the airport’s ap-
pearance and passenger experience. “We’re steadily trying to build a new airport in place,� said Ricky Smith, director of the Cleveland Airport System, which operates Hopkins and Burke Lakefront Airport. “We’re overhauling the ticketing area, and next year we’ll be refacing the terminal and then replacing the existing short-term parking lot.� Beyond physical changes, the airport is emphasizing its softer side to potential customers. Today, June 25, is Business Traveler Appreciation Day at Cleveland Hopkins. The airport is offering business travelers free coffee, free shoe shines and discounts at airport shops, among other perks. It even has created a Wall of Fame that will honor an inaugural group of road warriors.
A ‘pretty nice niche’ at Hopkins
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Not all firms, because of companywide travel policies, can jump on the bandwagon of this local program. But they understand the value of a higher level or air service. If an Eaton Corp. traveler tries to book a flight out of Akron-Canton Airport, a note pops up that suggests using Cleveland Hopkins as long as the airfare differential is $200 or less, said William B. “Barryâ€? Doggett, senior vice president of public and community affairs. Mr. Doggett added that of the 1,500 departures from Cleveland Hopkins by Eaton employees during the first five months of 2012, the share of United bookings is up “a couple percentâ€? over 2011. Lee Thomas, managing partner of the Cleveland office of the Ernst & Young accounting firm, said his 1,600 employees must adhere to firmwide travel guidelines and satisfy the clients who usually end up footing the bill for the firm’s travel. “There is not specific leeway for United,â€? he said. “But because their flights are the ones we want, we can get on the direct flight as long as the client is supportive of that.â€? United currently offers about 175 flights daily from Cleveland Hopkins, slightly lower than it did before the 2010 merger announcement. It has nonstop flights to 57 destinations, with about two-thirds of those being the only direct flights to those cities. With larger United hubs at Chicago’s O’Hare International Airport and Washington Dulles International Airport in the Washington, D.C., area, a Cleveland hub was viewed by many airline industry observers as excess baggage. And while many in the industry continue to question the ability of the Cleveland hub to survive, it has some supporters. Joseph Schwieterman, a professor and director of the Chaddick Institute for Metropolitan Development at DePaul University in Chicago, and a planner for United before he entered academia, thinks the hub can have a future. “They were making some good money in Cleveland,â€? he said. “I would be surprised if they substantially downsize Cleveland.â€? Noting that the majority of United’s flights in and out of Cleveland are on smaller, regional jets, Mr. Schwieterman said it wouldn’t make sense to move that traffic to crowded O’Hare or Dulles, taking slots now filled by more profitable international and transcontinental flights. “It’s a pretty nice niche for United that hasn’t been a drain on its bottom line,â€? he said. â–