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Closing of Cleveland United hub could benefit Pittsburgh International Airport

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Tuesday, Feb. 4, 2014, 12:01 a.m.
 

United Continental Holdings Inc.'s plan to ditch Cleveland as a hub provides a sliver of hope that Pittsburgh International Airport will scoop up passengers in nearby markets because of fewer options in the Ohio airport.

The decision puts Cleveland Hopkins International Airport in a position similar to the Pittsburgh airport when US Airways pulled out its hub a decade ago, slashing flights and jobs and reducing choices for fliers.

United's announcement gives Pittsburgh an opportunity to gain passengers, said Brad Penrod, Allegheny County Airport Authority's president and chief strategy officer. The airport has spent about $450,000 annually for five years to advertise in the Cleveland, Akron and Youngstown markets.

“Because of that advertising presence as these people seek to fill that void, we'd like to think a few more passengers out of that region will be Pittsburgh passengers,” Penrod said. “This will give us an opportunity to expand our marketplace area. It's a positive for us.”

United CEO Jeff Smisek announced Saturday in a letter to employees that the airline was cutting daily departures from Cleveland by 60 percent and shedding 470 jobs. United inherited the Cleveland hub from Continental. The airlines merged in 2010.

Pittsburgh is no stranger to the effects of mergers. The airport recently learned that 600 airline jobs will vanish when the new American Airlines, formed through a merger with US Airways, closes a flight operations center in Moon by next year.

“Cleveland is going the way of Pittsburgh, but Pittsburgh has survived. Pittsburgh has access to all major destinations in the world with only one connection,” said Mike Boyd, a Colorado-based airline industry consultant. “Really there won't be much impact for Pittsburgh. It's on the margins. You're fighting over Youngstown.”

When the United cutbacks are completed in June, Cleveland will have 140 departures, down from June 2013, when it had 242 departures. Including seasonal destinations, that will leave Cleveland with 36 nonstop destinations — one less than Pittsburgh serves.

Among United's cuts at Cleveland include the direct flight linking that city to Pittsburgh, which averaged two daily departures. That flight will be eliminated in June.

A decade ago, Pittsburgh was one of the nation's busiest airports, with more than 600 daily departures. Traffic plummeted when US Airways closed its hub in 2004. Pittsburgh International now averages 140 departures per day.

“(Cleveland's hub elimination) might affect Pittsburgh. With the oil and gas industry, there's a lot of need to fly to the southwest. Potentially there's some marginal business that could be picked up in the mid-Ohio, Utica region,” said William Lauer, an airline industry analyst who chairs Allegheny Capital Management Inc. in Downtown. “At the margins, it could be helpful to Pittsburgh.”

A bright spot for Cleveland could be fare reductions, experts said. Hubs in midsized airports tend to have higher fares because of one carrier's dominance. Cleveland's average domestic fare of $472.01 during last year's third quarter ranked as the nation's eighth highest, according to the latest Department of Transportation data.

Pittsburgh's average domestic fare totaled $406.70 during last year's third quarter, hovering around the national average of $390.43, the data showed. That's a sharp contrast from 1995, when former Pittsburgh Mayor Tom Murphy famously drove to Cleveland to save taxpayer money on airfare because of Cleveland's low fares at the time.

Staff writer Tom Fontaine contributed to this report. Bobby Kerlik is a staff writer for Trib Total Media. He can be reached at bkerlik@tribweb.com.

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