Two years ago, a trio of economics professors at Stanford University’s Graduate School of Business, checked in on a model they built in 2008 to measure and predict the long-term effects of U.S. airline mergers on specific markets, including Memphis.

With data going back to 2003, the model tentatively offered predictions of several outcomes starting in 2009 from a set of three airline mergers known at the time.

One of them was the merger of Delta Air Lines and Northwest Airlines, announced in 2008. The team’s general conclusion in 2010 was that the mergers would improve competition at airports.

With a lot of caveats about surprises, unforeseen events and statistical data that could make their conclusions more than tentative, Lanier Benkard, Aaron Bodoh-Creed and John Lazarev got to the Memphis market.

“Our simulations show Southwest (Airlines Co.) entering Memphis in about year seven (2015) and JetBlue (Airways Corp.) entering not at all,” they concluded. “If Delta and Northwest merge, however, Southwest enters Memphis right away, JetBlue enters in year two (2010) and both expand operations to 14 and 18 nonstop destinations by year 10 (2018), respectively.

“In response, the merged firm is forced to substantially cut back service and in year 10 Memphis is actually much less concentrated than it would have been had there been no merger.”

Benkard this week said the prediction about Southwest entering the Memphis market involves some factors that make it “pretty unique.” He also cautioned that he is not familiar with some of the recent developments in the Memphis market.

“The model is suggesting that it is currently a close call for Southwest and that it wouldn’t take much to get them to enter,” Benkard told The Daily News via email. “The real question is when does it happen? Is it next year or three years from now, etc.? That’s hard to predict.”

As a second round of Delta flight cuts at Memphis International began last month, Southwest executives struck a match and dropped it into the well of years of speculation about Southwest competition for Delta. They announced the handful of AirTran flights at Memphis would become Southwest flights in the near future.

Southwest bought AirTran last year.

Benkard also said a merger between Delta and American Airlines could face difficulty winning approval from federal regulators because of route overlap between the two airlines and the impact that overlap would have on ticket prices.

American Airlines’ parent company, AMR Corp., filed for Chapter 11 bankruptcy protection in November, the last of the major air carriers to undergo bankruptcy.

Delta has not acknowledged its interest in an American merger. The Wall Street Journal reported last month that Delta has hired Blackstone Group as its financial adviser as it explores a merger. US Airways has acknowledged it is exploring an American merger.

But with American announcing this week it intends to cut 13,000 jobs – 15 percent of its workforce system-wide, including regional airline American Eagle – there are new questions about whether a merger is still on the table.

AMR CEO Tom Horton this week acknowledged attempts by other companies to downsize, acquire or take over American would be “all for the benefit of their own stakeholders.”

“I do not believe any of these outcomes are in the best interests of American, our people or our stakeholders,” Horton wrote in the written statement to American employees Wednesday. “But, as I have said since the start of this process, there will be many parties with input into the outcome of our restructuring.”

As part of the bankruptcy reorganization, AMR announced this week plans to increase American flights to New York, Los Angeles, Chicago, Dallas and Miami in the next five years. There were no details on the impact of job cuts on American’s operation at Memphis International.

American Airlines and its American Eagle regional brand accounted for eight scheduled flights at Memphis International Airport in December with 21,176 passengers enplaned and deplaned. That represented 3.3 percent of the passenger count at Memphis International for the month.

Delta President Ed Bastian told analysts Thursday, Feb. 2, at a Raymond James global airlines conference that American’s drastic jobs cuts are further confirmation that “the model is shifting.”

“We expect the industry to continue with the reshaping we’ve seen,” he said. “The improvements we are seeing are in the bottom line. Our focus is on returns, not market share.”

Bastian announced Delta will probably offer early retirement to some of its employees during 2012 and limit the number of those positions it will fill.

He also said Delta expects fuel prices, which Delta has adopted a hedging strategy to counter, may continue to rise in 2012.

“We’re no longer in the business of just expecting the forward curve is going to remain flat,” Bastian said of fuel prices. “We’re going to expect fuel prices are going to continue to escalate, continue to rise and adjust our capacity.”