UAL Stock — United Airlines to Drop Cleveland as a Hub

Some 470 employees also losing jobs

   

UAL Stock — United Airlines to Drop Cleveland as a Hub

United Continental Holdings (UAL) is dropping Cleveland as a hub due to its failure to be profitable for the company.

While United Continental — the world’s second-largest airline after a 2010 merger between United and Continental Airlines — is also cutting 470 jobs in a profitability move, UAL stock didn’t show any upward momentum.

UAL stock is up 21% year to date.

The average amount of daily departures will be reduced by some 60% by June by dropping regional flights from Cleveland, Chief Executive Officer Jeff Smisek wrote in a letter.

“Our hub in Cleveland hasn’t been profitable for over a decade, and has generated tens of millions of dollars of annual losses in recent years,” Smisek said. “The demand for hub-level connecting flying through Cleveland simply isn’t there.”

New schedules will be in place by June, he stated in the letter.

The move is part of a larger plan to reduce costs by some $2 billion by 2017.

Pilot and flight attendants will still use Cleveland as a base.


Article printed from InvestorPlace Media, http://investorplace.com/2014/02/united-airlines-cleveland-hub-ual-stock/.

©2014 InvestorPlace Media, LLC

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