US airline consolidation: United Airlines reduces service as Cleveland's hub role is pared back

Shortly after Cleveland Hopkins International airport reported a slight uptick in passenger counts for FY2013 - the first such increase since 2007- the airport's anchor carrier United Airlines tabled plans to downsize its Cleveland hub significantly.

The move is neither surprising nor unexpected given Cleveland's proximity to United's large hub at Chicago O'Hare. With all US major carriers moving to centralise their operations in hubs where they maximise connecting revenue, Cleveland's fate has been sealed for quite some time. In order to gain US government approval for the 2010 merger of United and Continental, the carriers agreed to uphold a certain level of operations at Cleveland for about two years after the merger. So it appears United now has some leeway to overhaul and downsize Cleveland, a hub it claims has been unprofitable for more than a decade.

United's moves in Cleveland reflect its stated philosophy of ensuring every market makes a positive contribution to the carrier's entire system. Many markets on the chopping block from Cleveland simply could not drive the connecting revenue necessary to make the hub viable. The next chapter, yet to be written, is how the ever-present ULCCs and other low-cost airlines will respond to the opportunities opened up in this way.