United Continental Holdings Inc (UAL.N), the parent company of United Airlines, plans to lower the number of daily departures from its unprofitable Cleveland hub starting in April because of insufficient demand, according to a memo to employees.
Average daily departures will fall by around 60 percent, leading to 36 percent less capacity based on seats, Chief Executive Jeff Smisek said in the memo.
“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 reduction could result in up to 430 airport operations staff and 40 catering personnel losing their jobs, Smisek said.
A pilot shortage accelerated the decision to reduce flights, Smisek said.
New federal regulations implemented last year require more flight experience from pilots than previously needed, resulting in a shortage of pilots across the industry.
Local officials had expressed concern that United would drop Cleveland because the airline has a hub in its headquarter city of Chicago, and because the two cities are relatively close to each other.
But United plans to keep pilot and flight attendant bases there as well as technical operations, Smisek said.
United was formed by a merger of UAL and Continental in 2010.
(Reporting by Nivedita Bhattacharjee and Nicola Leske; Editing by Christopher Cushing)