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Not immune: Domestic capacity at busy hub set to drop 6 percent year-over-year.
The Atlanta Journal-Constitution
Published on: 07/16/08
As Delta Air Lines cuts back flights to cope with high fuel costs, its largest hub in Atlanta won't be immune to the reductions.
Delta is cutting about 6 percent of its domestic capacity out of Atlanta in September compared with a year earlier, part of a move to reduce domestic capacity by 13 percent across its system.
Among the cuts are international routes to Vienna, Austria; Ottawa, Ontario; and Leon, Mexico. The elimination of the three routes in the next few months is part of Delta's decision to pull its service entirely from those cities and others.
The reduction in capacity will also mean fewer flights on routes from Atlanta to cities including Ontario, Calif.; Norfolk, Va.; Myrtle Beach, S.C.; and Savannah.
According to a research report from Credit Suisse analyst Daniel McKenzie, Delta and United Airlines are making some of the biggest capacity cuts among U.S. airlines.
Delta's cutbacks in the fall come on top of route cuts it has already made in the past year, including the elimination of routes from Atlanta to Atlantic City, N.J.; Corpus Christi, Texas; Sioux Falls, S.D.; Green Bay, Wis.; McAllen, Texas; Oakland, Calif.; State College, Pa.; and Toledo, Ohio. Delta has also cut other international routes from Atlanta in the past year, including to Merida, Mexico, and Point a Pitre and Fort de France in the Caribbean.
Atlanta is seeing a smaller cut than other cities around Delta's network as the airline focuses many of its reductions on flights between smaller cities that don't go through hubs, other smaller markets and flights to leisure destinations such as Orlando. The carrier is also cutting some of its cross-country flights and plans to route passengers with connections through hubs instead.
"Regional nonstop flights that bypass hubs are the ones that in this fuel environment are not economical," said Delta spokesman Kent Landers.
The cuts to smaller markets come as Delta cuts its fleet by 15 to 20 mainline aircraft and 60 to 70 regional jets by the end of 2008 and reduces the number of regional carriers it uses.
According to the Credit Suisse report, Delta is cutting service where there is no direct competition, such as in Cincinnati and Salt Lake City.
Landers said Salt Lake City and Cincinnati are primarily domestic hubs and that Delta's objective is to cut domestic capacity.
Delta this month announced it would end its agreement with Delta Connection carrier ExpressJet, and has attempted to end agreements with Delta Connection carriers Pinnacle Airlines and Mesa Air Group subsidiary Freedom Airlines. When Delta announced capacity cuts earlier this year, it said much of the shrinkage would be among the company's contract carriers and its Comair regional subsidiary in Cincinnati.
Among Delta's hubs, Atlanta and New York have the advantage of having most of Delta's international flights.
"We have greater opportunity to have a higher mix of international passengers on our flights who are connecting to international flights," Landers said. Those passengers bring in higher average fares that "better cover the cost of fuel."
Delta is adding other international routes, including Atlanta-to-Stockholm, started in June.
Delta's cutbacks come as other carriers also cut back, including Atlanta's second-largest carrier, AirTran Airways. AirTran is cutting its capacity by 5 percent instead of its previous plans to grow 10 percent.
And there are likely more airline capacity cuts and fare increases to come, said Colorado-based aviation consultant Mike Boyd.
"We've seen one shoe drop," he said. "We've got Imelda Marcos' closet to go."
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