While Atlanta-based Delta has grown into the largest airline in the world through its merger with Northwest, its presence at one of its longtime hubs has been rapidly shrinking.
Delta’s Cincinnati hub is less than half the size it was four years ago, one of the company’s most dramatic areas of cuts. A major question in the merger was whether it would cut a hub from its combined network, which now includes Delta’s hubs in Atlanta, New York, Salt Lake City and Cincinnati and Northwest’s hubs in Minneapolis-St. Paul, Detroit and Memphis.
With its larger presence, Atlanta-based Delta is now a key economic force in more cities around the country. That means that the strategic decisions Delta’s executives make at their headquarters near Hartsfield-Jackson International Airport are being scrutinized by more civic leaders, travelers and companies all over, who depend on Delta flights for business trips and vacations, to boost tourism and to attract corporate headquarters.
And Cincinnati is not going quietly. The Cincinnati USA Regional Chamber launched an effort to keep its Delta flights to London and Frankfurt, which Delta plans to cut this fall.
Delta worked hard to gain support for the merger by pledging not to eliminate hubs or lay off front-line employees as a result of the deal. Now as the company cuts flights amid the recession, that amounts to growing pressure to balance maintaining its service while cutting costs.
For a city, major flight cuts “can be devastating,” said Darryl Jenkins, an airline consultant. But at an airline, “sometimes you just put on the shades and make real tough decisions.”
Delta is cutting its fall schedule in Cincinnati by 17 percent, after a 22 percent capacity cut last fall. Including Delta Connection flights, it will be down to about 215 flights a day there, down from more than 600 in 2005, before Delta’s bankruptcy, according to Northern Kentucky Tri-County Economic Development Corp. President Daniel Tobergte. Last year, Delta moved out of one of the three concourses it operated out of the Cincinnati airport.
Cincinnati boosters say the discontinuation of the London and Frankfurt routes will be detrimental for local companies such as Procter & Gamble and GE Aviation and for efforts to attract more businesses to the city.
A hub brings air service “that the community itself could never warrant,” acting as a catalyst for economic growth, said Cincinnati airport executive director John Mok.
The Cincinnati area has attracted companies because of the international flights it has had for more than 20 years, Tobergte said. “Hub status sets a community apart.”
In a memo, Cincinnati civic leaders implored Delta chief executive Richard Anderson to at least maintain three to four flights a week to London and Frankfurt. Delta now flies each route six times a week.
In response, Anderson wrote, “We cannot afford to continue to operate at the same level as prior years when both demand and revenue do not support the routes,” he added. Officials from Cincinnati and Delta plan to meet this month.
“In this economy, you have to be very careful,” Jenkins said. Delta is “probably losing a lot of money in Cincinnati, and you just can’t afford to do that right now.”
Some are already questioning whether Cincinnati is still a full-fledged hub.
“I’m pretty sure that it’s not a hub right now,” said Jenkins, who is also founder of Theairlinezone.com.
Delta is “way over-hubbed. They don’t need that many places to transfer traffic,” Jenkins said. “I think over time Cincinnati will become a nice focus city for them, and I think that’s pretty much it.”
Mok said, “It comes down to the definition of what constitutes a hub,” but the Cincinnati hub will still be larger than Continental’s hub in Cleveland.
At the Cincinnati USA Regional Chamber, President Ellen van der Horst said, “I have no idea how to define the term ‘hub,’ nor do I have a crystal ball. ... It is certainly my hope that we will continue to see strong service from Delta out of this airport.”
Regardless of the merger, Cincinnati is not big enough to support as many flights as it once had, said aviation consultant Mike Boyd. Delta uses mostly regional jets operated by Delta Connection carriers for its flights out of Cincinnati. Those aircraft “are very hard to make money with” when oil costs $60 a barrel, Boyd said. “When Cincinnati was built up as a hub, oil was $18 a barrel.
“The chamber can write all the letters they want. It’s not going to change economics,” Boyd added. “Call our friends in Pittsburgh, who lost their hub entirely.”
Another challenge in Cincinnati is high fares and competition with airports in Dayton and Columbus. To address that issue, Delta lowered its fare structure in Cincinnati earlier this year.
Now, the airport is urging travelers to “take another look at our airport,” van der Horst said. “A lot of people had stopped even looking.”
Meanwhile, other Delta hubs, including Memphis and Detroit, have also suffered cuts but still held onto most of their flights. Delta has also maintained the heft of its Atlanta hub, the largest operation in its network, though it is eliminating flights to Shanghai, Seoul and Mumbai.
Delta subsidiary Comair, based in the Cincinnati area, has also been cutting its work force.
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