We’ve been seeing this strategy play out for the past few years now: U.S. airlines shifting flights away from smaller cities to mega-hubs. The latest victim is Memphis.
Memphis Loses Nearly 200 Flights Since 2009
As the AP reports, Delta Air Lines is downgrading its once-busy Tennessee hub by slashing flights and jobs starting Sept. 3. The airport reportedly offered as many as 240 Delta flights just four years ago, but there are less than 100 today and the number will dip to 60 in the fall.
Mid-Size City Blues
Asked if other Delta hubs will be cut, the airline told the AP there are no plans for this but the door was left wide open as the airline rep stated, “Delta continually reviews the viability of all markets.”
And yes, such reviews can lead to a lot of pain. Just ask the 230 people who will be losing jobs in Memphis, or those at smaller airports who worry about future unemployment. As airfare analyst Rick Seaney pointed out recently, “We’ve seen airlines defocus cities like Cincinnati and Cleveland” and more would not be surprising. And as travelers shop smarter, they realize that larger airports usually offer cheaper flights than those in smaller cities.
Mergers, Oil, Survival
Are mergers part of the problem? In a word, yes. As the AP reports, “When it bought Northwest in 2008, Delta executives said repeatedly that no hubs would be closed because of the merger. The possibility of hub closures was a major topic of Congressional hearings into the deal.”
In Delta’s defense, times changed. In 2008 alone, oil prices began a roller coaster ride that saw crude hit a peak of nearly $150 per barrel before dropping down to $37 later that year. By then of course, the recession was walloping everyone, and airline capacity cutting shifted into high gear while new fees were introduced and travelers grudgingly got used to them.
Thanks to cuts and fees, many airlines weathered this critical time (but not all, including Aloha, Skybus and ATA). As analysts have noted before, defunct airlines can’t get anyone anywhere.
American, US Airways Merger
What about the latest merger – the Valentine’s Day deal between American and US Airways? As Rick Seaney reported back in April, “As of January 2014, many of the codeshare flights that US Airways and United currently team up for will go away.” What this will mean for mid-size or smaller cities is not yet clear but one thing is for certain: change is inevitable.