United came in DEAD LAST in the latest Brand Keys Customer Loyalty Engagement Index. The index includes the results of a survey of over 36,000 people in 64 categories (total of 540 brands), which includes airlines. Interestingly, word of mouth is considered one of the most important marketing tools for airlines, and brand loyalty increases the odds of positive word of mouth comments. The winner? Air Canada. If you've flown them in recent months, you'd find out they're everything United is not - reasonable fees, pleasant crews, better services, etc.
In these litigious times where companies will go out of their way to sue you for unsubstantiated negative comments on the internet, it's good to know there's solid, well-researched data which strongly supports your view on a product or company. It is my personal view that United Airlines is horrible, and thank goodness there is reputable data out there which supports my view.
I was recently talking with a consultant to the airline industry while traveling back from Austin (on Southwest, which was half the price of United). Interestingly, his comments echoed yours. He feels that Cleveland is the lead city to capture a new hub, most likely from Jet Blue. He thinks they will cover around 12-15 cities, mostly Midwest traffic with some E-W coverage (which is what United should have focused on in Cleveland, which is a low congestion air space and as an airport has some of the FEWEST weather delays in the nation). He also felt that Concourse D will eventually come back to life, but that United (it figures) will hold it hostage for a while.
On that topic, it's costing United over $12 million a YEAR to hold on to Concourse D, so I have to wonder how much money were they REALLY losing in Cleveland, or did Mr. Smisek just want to get out of Dodge. When you add up all of their exit costs, and I'm by no means any financial wizard, I have to wonder if it was worth it. Couple that to all the delay costs they have added in ORD and EWR (especially ORD) such as accommodation, food and "bumping" costs, and I'm willing to bet a thorough financial analysis will demonstrate that Mr. Smisek and his executive team made a bone-headed decision on Cleveland.
If I were a UAL shareholder (and I think I may buy 1 share so I can speak out at the next annual meeting), I think I would be asking Mr. Smisek and his team what the TRUE cost savings were with closing Cleveland. I'm willing to bet a dozen doughnuts they would have a hard time showing any savings within 5 years, and if they HONESTLY figured in the additional costs due to delays, etc., I'll add a second dozen doughnuts that says they are actually HURTING their profitability. They need to ADD to their "per seat mile" costs the delays, etc., rather than bury them as "misc" expenses.
Let me throw some more tinder on this topic...
* ORD delays have INCREASED since the close of the CLE hub (see numerous articles in Chicago Sun Times and FAA statistics).
* United has to pay just over $1 million a MONTH through 2027 to pay off the debt for Cleveland Hopkin's Concourse D (a little factoid most of you shareholders probably DON'T know)
* Eaton, Parker, Rockwell, Sherwin Williams, and several other Cleveland-based blue-chips are hammering the Cleveland Port Authority and other local agencies to improve the flight situation in Cleveland. The result appears to be the emergence of Jet Blue as a potential developer of a new mini hub in Cleveland over the next 3-4 years so they can expand within the Midwest market slot.
* Most importantly, Jeff Smisek LIED to shareholders last year when he made the following WRITTEN statement: "Our hub in Cleveland hasn't been profitable for over a decade..." Just a couple years earlier, then-United Senior Vice President of Network Greg Hart, who has since moved into a new role as Chief Operating Officer as of December 2013, commented, "Year after year, (Cleveland Hopkins International Airport's) performance is better than some of the other hubs in terms of profitability." OK, so which is it, Mr. Smisek? You realize that LYING as an OFFICER of a publicly traded company potentially violates Sarbanes Oxley, as it is basically a lie to your auditor? (See Crains Cleveland article among others for more on this topic).
United F*&KED Cleveland when they moved out. The company's CEO LIED to local employees, and LIED to its own shareholders. Many of us understand the business reasons for the closure - per seat mile costs for Embraer regionals were (key word - WERE) higher vs. larger jets, FAA meddling in pilot regulations, etc. However, the way it was done has materially harmed the economic market of Northeast Ohio.
I continue to say...Mr. Smisek has a good airline. Trouble is, he started with a great one!