VOL. 128 | NO. 108 | Tuesday, June 04, 2013
Delta to De-Hub Memphis
By Bill Dries
Memphis is losing its status as a passenger hub for Delta Air Lines.
Delta executives announced Tuesday, June 4, the Atlanta-based airline will cut service to Memphis International Airport to approximately 60 daily flights starting in September, down from 92.
Leaders of the Atlanta-based global air carrier told airport officials of the latest cuts over the last three years Tuesday morning.
“We will no longer be a Delta hub,” said Jack Sammons, chairman of the Memphis-Shelby County Airport Authority. “We will rely purely on origination and destination traffic for the Delta passengers.”
But a letter to Memphis Delta employees from Delta senior vice president Gil West and senior vice president Tony Charaf said the new Memphis schedule will “preserve nearly all the top destinations for Memphis customers,” adding the biggest part of the reduction will be in 50-seat regional air service that Delta and other major air carriers are abandoning.
West and Charaf also wrote employees that the service cuts will mean “a reduction” of about 230 airport customer service employees in Memphis as well as Delta cargo positions in Memphis. The job losses are also effective Sept. 3, according to the letter.
“We knew there was a risk, but just a month ago I had a meeting with top management there,” Sammons said. “No need for me to go there. It’s their company and it’s their investment for their stockholders. We have no ability to dictate what they do.”
Memphis International Airport became a hub for Delta following the airline’s merger with Northwest Airlines, which had operated a hub here.
City leaders said the merger brought assurances from Delta executives that Memphis would not only remain a hub but that service would at least remain constant if not increase.
But in time, Delta executives adopted an operating philosophy that Memphis International would serve as an overflow airport for Delta service out of Atlanta. Service cuts followed and already high airfares jumped with the cuts.
Meanwhile, competing airliners were hesitant to exploit the drop in service at Memphis International, fearing Delta would do what Northwest did at Memphis International when Frontier Airlines tried to enter the market. Northwest increased its service and discounted rates until Frontier couldn’t compete.
But as Delta leaders cut service at Memphis International, they emphasized that the cuts here and elsewhere were permanent cuts in capacity that would not be restored even if gas prices dropped lower than expected. The rapid rise in gas prices is blamed by Delta leaders for the shift in philosophy that prompted the series of air service cuts for Memphis.
With the Delta cuts, Sammons and other airport authority board members, along with other civic leaders, have been hopeful that domestic air carriers like Southwest and Jet Blue would fill the void.
Southwest is expected to switch its AirTran flights to full Southwest service in November, two months after the latest Delta cuts take effect.
In April, Delta daily scheduled flights including regional air service under the Delta brand totaled 92.
Last September, Delta’s daily scheduled flights at Memphis International numbered 120.
“I said we are going to be relentless in our effort to obtain frequent and affordable air service for Memphis,” Sammons said. “I’d be less than candid if I didn’t say this is a significant setback. But it doesn’t change our plan one iota. We move forward with our efforts to secure other carriers. I know that Southwest has indicated that in time they will be the largest provider of service to this region.”
The previous Delta cuts meant that origin and destination traffic at Memphis International Airport has already outpaced connecting traffic, a reflection of the drop in Delta service – most of which was connecting flights – not an increase in O&D flights.
Sammons estimated the percentage mix is about 60/40 with O&D traffic being the majority. With the Delta cuts to come in the fall, he said that will probably go to a 90-10 percentage split for Memphis International.