Any customer loyalty that remained was increasingly based on the traveler’s proximity to a hub

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For the airlines, as time went on, any customer loyalty that remained was increasingly based on the traveler’s proximity to a hub, not really anything else. For example, I live in Cleveland. As it emerged from bankruptcy, Continental became the major carrier here, operating one of its three hubs at Hopkins International: the others being in Newark and Houston. The economy in Northeastern Ohio has been tough for more than 30 years.

The population has barely grown. Many good jobs have left. Still, despite the constant economic challenges, the state and local governments, along with occasional support from the feds, have done all they can—and probably more—to incentivize the airline to keep its operations here. The airport, which is owned by the City of Cleveland, has been remodeled several times in recent years; runways have been expanded; and a new terminal, just for Continental flights, was added a little more than a decade ago. In addition, big tax breaks and subsidies have been handed out to the carrier from the State of Ohio, Cuyahoga County, and the City of Cleveland. Having Continental here is a big plus—and the politicians know it. The presence of the hub keeps us a “major league city”—despite the terrible history of our sports franchises. It also gives the nearly 4 million residents in the region great access to the global airline network. The airline’s pay-off came in the form of customers like me who faithfully flew the carrier, bought a President’s Club Membership, used the Continental MasterCard, and fought hard to get enough miles each year to make it to Gold Status. I would pay a bit more and even take a little longer trip if necessary so long as I could stay on Continental.

Recently, however, United has taken over Continental, and the future of the Cleveland hub is in grave danger. Already, many flights have been eliminated, ticket prices have risen, and it just seems a matter of time before I will have to connect through O’Hare in Chicago or Dulles in Washington, D.C.— United’s hubs—to get anywhere. As a result, I, along with a lot of people like me, have begun to expand my comfort zone with other carriers. I now increasingly use Air Tran out of the Canton-Akron Airport when the price and connection is better, although it is a farther drive from my home. Although I still have the Continental MasterCard and my President’s Club membership, I have resigned myself to not making Gold this year. Who knows what I will do next year when it comes time to renew?

This illustrates the fickle nature of most airline customers in the era of Flying Cheap. As the experience is pretty much the same across the industry; in other words, flying is now a commodity. The only real differentiators now for passengers are how low can the fare go, and does it fit into my schedule at this particular moment in time? As people worth their salt in marketing will tell you, it’s very, very difficult to build a sustainable business with customers who are overwhelmingly price-sensitive and transaction-focused.

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