More MEM cuts

Discussion in 'Delta Air Lines' started by Kev3188, Oct 22, 2013.

  1. Kev3188

    Kev3188 Veteran

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    Company cites poor revenue performance.

    Will be down to 40 peak day departures.

    16/20 top O& D markets still served

    126 ACS & Cargo employees whacked

    IFS base to close in Jan. '14.

    MEM:DL :: PIT:US :(
     
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  2. 737823

    737823 Veteran

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    Is anyone surprised? I imagine DL has more m/l flying at BOS than MEM

    Josh
     
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  3. Kev3188

    Kev3188 Veteran

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    I doubt it. Still sad, though- especially for those of us that remember when it was (relatively) booming...
     
  4. eolesen

    eolesen Veteran

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    It would have been better for everyone if DL had just closed it down quickly, instead of putting on appearances.

    Of course revenues and local demand suffered -- everyone knew DL wasn't going to stick around, so they flew on other carriers...
     
  5. Kev3188

    Kev3188 Veteran

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    Wish I could disagree, E...
     
  6. robbedagain

    robbedagain Veteran

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    Just waiting for wt spin on this..... kev youre right only though cvg n mem are what us is to pit sad good luck to all the dl folks affected by that
     
  7. WorldTraveler

    WorldTraveler Corn Field

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    Of course I wish the DL people affected the best in an unfortunate situation. What is there to spin about that?

    It doesn’t change that MEM was a hub that worked based on low fuel prices during the era when NW operated it. Fuel prices spiked AFTER the DL-NW merger, fares were increased to cover costs, and demand went down not only at MEM but in many of the O&Ds that flew over MEM. MEM doesn’t generate the level of local demand that other cities have generated and it is precisely for that reason that the city can’t support more service on larger, more cost efficient aircraft.

    The simple fact is that CVG is not in the same boat as MEM because CVG had a stronger business community before the merger and is now. MEM might be a great town but people somehow forget that DL’s history has been intertwined with MEM for decades… DL’s birthplace is just down the river from MEM. DL is fully aware of what the MEM market can deliver and is willing to give MEM all of the resources necessary to make money but DL isn’t going to lose money to hold onto a hub that existed based on much lower fuel prices.

    No US carrier is a charity operation and has to make money. If DL can’t make it work even as the lowest CASM network carrier, then the chances aren’t real great that MEM is going to find a lot of hope expanding air service with other carriers.

    DL's market share at MEM is still higher than for other carriers in other former hubs. Perhaps you can tell us, E, what AA's market share is at RDU, BNA, SJC or US' is at BWI or PIT? Then you can go ahead and note DL's market share at MEM.

    As for pulling the market down in one fell swoop, why hasn’t AA done that at JFK? It’s been pretty clear that AA continues to find one more route here or there to lop off or downgrade and yet they haven’t thrown in the towel. Maybe AA thinks they can downsize to a point where they can make money in the same way that DL keeps looking for the sweet spot at MEM?
     
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  8. 737823

    737823 Veteran

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    I agree, what business community is there in MEM? International Paper, Fedex and maybe a few holdovers from the former Morgan Keegan? Steve Cohen and the MEM leaders can cry DL and the media a river, no one cares. CVG at least has a more vibrant business community and the area leaders have been more supportive of DL and recognize that the airports role has changed in DL's network. Seems the adjustments they have made to the market are working.

    Unlike other former and dying hubs (ie CLE, PIT, STL) MEM hasn't had other carriers enter and pick up DL/NW's slack. Not surprising given the fact that the MEM area is ridden with crime, household incomes well below national average and among the highest poverty rates in the nation. If the market brought anything to the table you would see B6 or WN chasing after the opportunity for a major expansion there but they haven't. As for DL putting on appearances, didn't AA more or less do the same at STL with gradual cuts over the years? Same could be said for BOS with AA, although it was never intended to serve as a hub, but rather larger focus city tailored to the local market. DL is under no obligation to continue unprofitable flying at MEM. It is not in the interests of DL employees, passengers, or shareholders.

    Josh
     
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  9. eolesen

    eolesen Veteran

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    Interesting to note that in the AA forum, WT can't help but make it all about DL, yet here, he has to make it all about AA....

    DL's origins "just down the river" is one of the dumbest comments yet. Monroe is over 300 miles away from Memphis, and that was an oversized crop-dusting operation almost 100 years ago. What possible relevance could there be from a 'tween the wars economy in the 30's to today?

    The fact is that MEM has had the Sword of Deltaclese hanging over its head since the merger, and they chose the death of 1000 cuts instead of just getting rid of it as they should have done.

    If there's any comparison to be made, it's about intent.


    When AA made their decisions to de-hub, they didn't dance around the issue -- they just got it done quickly. Even at STL, the largest axe was swung in 2003. The Old DL showed that sort of resolve when it abandoned DFW.


    Your comments about share shift illustrate how you like to cherry pick your comparisons....

    Josh already noted that in the BWI, RDU, SJC, and BNA examples,someone else came in and backfilled.

    Those cities all shrank down to spoke status with AA quickly, and WN came in as it was during their explosive growth phase.


    Yet, in your Litany of AA's Woes, you failed to mention STL.

    Maybe that's because when it was de-hubbed, nobody else moved in with substantial capacity, just like what happened at CVG.

    It wasn't done as quickly, but the largest axe was swung within 2 years of the merger. There was no doubt in anyone's minds about the future of STL. No pretending that it was a significant station, no promises made to the unions or local community. AA abandoned half the airport and paid the lease for empty gates for years afterward.


    So, feel free to enlighten all of us low information pundits, oh Great Cherry Picker of Statistics, on the history of hublets.

    Just try to do so a little more honestly, and that means having a full sample size that considers not only just market share, but growth by other carriers in the aftermath.
     
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  10. WorldTraveler

    WorldTraveler Corn Field

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    Yes, I am sure it MLU is as disconnected from MEM as LGA is from DFW... which might explain why AA's former headquarter status in NYC has no correlation on heir market share now.

    Of course you are right... I just forgot to draw the right correlation.

    You do realize that AA's passenger share in STL is now in the double digits, less than half what WN has? I guess they didn't move in but just stood around waiting for AA to leave so they could fill their planes with former AA revenue?

    DL's market share in MEM remains at 60%. Maybe it will fall but DL's market share in CVG is far north of that.

    Josh was indeed right. If there is a market for someone else, they will be there. Or maybe, just maybe, DL is cutting because the market is not there and at current fuel prices what market that does exist can't be served profitably.

    Go ahead with the "it was all planned" strategy... it plays into the hands of people like Kev who feel that DL had it in for the IAM and the PMNW people before the earth was ever created.

    Never mind that fuel increased more than 50% after the DL-NW merger announced, something that did not happen with any of the subsequent mergers.

    Your a reasonably smart guy but apparently can't seem to grasp that demand really does go down when prices go up... which is what happens when fuel goes up.

    Unless of course you have an airline like AA with a Pacific strategy that is hellbent to have a presence regardless of the financial results - and is willing to flush $200M a year in employee cost cuts down the drain in order to make their "dreams" come true.
     
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  11. Kev3188

    Kev3188 Veteran

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    C'mon E--

    You know none of that fits the narrative...
     
  12. WorldTraveler

    WorldTraveler Corn Field

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    yeah, the narrative is DL was out to screw us at NW before the merger.

    DL bad, IAM good, never give up the fight.....


    guess what, Fred, DL peeps could care less about the IAM when the company said that DL is now paying 20% profit sharing for the first time in history... at least of DL.

    Perhaps you can tell us, Freddy, when else in the history of aviation profit sharing has been paid at the 20% rate.

    Freddy? where art thou?
     
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  13. 737823

    737823 Veteran

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    Seriously what does MEM contribute to the network? All the flying at MEM could be done from ATL and offer better connectivity. If DL stayed at MEM all these years and lost tons everyone would be harping on them for not cutting unprofitable flying. No markets are immune in the current environment, if the route isn't profitable or served for strategic purposes (which MEM isn't) the airlines shouldn't be flying it.

    This sounds like all the UAW workers that knew years ago their plant was slated for closure but carryon about how efficient and productive the workforce is, how skilled they think they are at their craft, etc. MEM served a role in NW's, today it is insignificant for DL. Give it up, move on.

    Josh
     
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  14. Kev3188

    Kev3188 Veteran

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    Josh--

    Is this a rhetorical statement? I haven't seen anyone on here saying it should have stayed at previous levels of flight activity...
     
  15. 737823

    737823 Veteran

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    Everyone keeps reminiscing about MEM and the good ole days. DL has drastically scaled back many other markets-BOS, DFW, MCO, PDX over the years and countless international routes from ATL but there just seems to be something special about MEM. Don't get it.

    Josh
     

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