How Deep Will Delta Cut at its Cincinnati Hub?

jalbalpa

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Dec 4, 2008
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January 2, 2009, 12:28 pm
How Deep Will Delta Cut at its Cincinnati Hub?
Posted by Matt Phillips

Plenty of pixels have been spilled over what Delta will do with service in Cincinnati following the official close of the Delta/Northwest merger deal. (If you’re interested in background, see this previous post.)

Recently, credit rating company Fitch weighed in on Delta’s plans for the Midwest hub, as part of a note in which it downgraded its ratings of the airport’s debt. There are plenty of tasty tidbits in the note — for starters, Delta reductions already announced through 2009 represent a nearly 30% cut in capacity at the airport, already the nation’s most expensive. Also, according to Fitch, Delta’s operation at Cincinnati is its second-largest domestic hub and the Atlanta-based carrier accounted for roughly 92% of total passenger volume in 2007.

Speaking of traffic, historically, Delta Airlines’ connecting traffic accounts for more than 70% of CVG’s total passengers. Besides downgrading the airport authority’s debt rating, Fitch analysts also said its outlook for future ratings adjustments on CVG debt was negative. Here’s why:

The Negative Rating Outlook reflects the ongoing uncertainty of future traffic as the airport’s largest carrier, Delta Airlines (Delta), begins to execute its merger with Northwest Airlines. As the two airlines harmonize their fleets and strategically deploy assets across their networks, the ability to maintain operations at four large connecting hubs within close proximity (Minneapolis, Detroit, Memphis, and Cincinnati) at current levels will be difficult. Further reductions in enplanements will increase financial pressure and likely result in the cost per enplaned passenger (CPE) having to rise to levels that make the airport less competitive …

Despite the airline’s public commitment to the airport through 2015 and the limited elimination of markets served, the airport has already experienced significant re-alignment and retrenchment by Delta as part of its reorganization from bankruptcy and the overall retrenchment in domestic capacity. The airport expects that enplanements in 2008 will be 6.7 million, down approximately 15% from 2007, with an additional 18% reduction in 2009 that would drop the total to 5.5 million, a level not seen since 1992.

Fliers who call CVG their home airport have a complicated relationship with Delta. The carrier’s overwhelming dominance at the airport is largely responsible for Cincinnati consistently grappling with some of the highest fares in the country. On the other hand, fewer Delta flights there will likely only push prices higher. Unless, of course, another carrier manages to somehow find a gap in Delta’s fortress hub and gain a toehold there.


http://blogs.wsj.com/middleseat/2009/01/02...b/?mod=yahoo_hs

So as long as Delta management keeps calling it "right" sizing, people will buy into their lies!
I just feel bad for the Delta employees in CVG, time to move or find a new career folks! Who knows, maybe WN will move in and you can truly experience "premier" treatment as an employee and as a professional.
 
January 2, 2009, 12:28 pm
How Deep Will Delta Cut at its Cincinnati Hub?
Posted by Matt Phillips


The rumors we are hearing in ATL maint. is that CVG may be expanding MX wise (gear ,letter checks).
Running out of room here.
 
DL is certainly not alone in cutting capacity in this economic climate - all the network carriers are doing the same and even the low cost carriers have stopped/slowed growth. I guess we'll find out next week when the December traffic press releases come out, but all indications are that traffic is down across the industry and it's only the capacity cuts that have kept load factors up.

Whether adjusting previous plans for the drop in traffic is lying or not seems to be an unanswerable question at this point. If the CVG cuts largely remain after traffic recovers (whenever that may be), then one could make the case that DL management was previously being less than truthful about the "rightsizing".

Jim
 
Please name another hub that has seen a reduction of over 30% in the past year.
 
Please name another hub that has seen a reduction of over 30% in the past year.

Can't think of one off the top of my head - PIT was already only a "focus city" a year ago.

Now your turn - name another carrier that has within the last year been both rationalizing the combined route structure of a merger and in addition responding to the recent decrease in traffic.

Jim
 
No other carrier has merged in the past year, every carrier has been effected by the decrease in demand.

I'm not saying it doesn't make sense closing CVG, Delta management should just come out and say so instead of giving the employees and the community false hope! But then again, why would they be honest for a change?

"You can put lipstick on a pig, but its still a pig" - President elect Barack Obama
 
I'm not saying it doesn't make sense closing CVG, Delta management should just come out and say so instead of giving the employees and the community false hope! But then again, why would they be honest for a change?
This probably is the crux of our difference. I see those who think everything management says is a lie as being just as wrong as those who think everything the union says is a lie. I haven't seen a perfect union yet, nor have I seen a management that didn't attempt to get the most from the employees for the least cost. The only difference is that management is doing their job (albeit underhandedly at times) while the union is supposed to be looking out for the employees (but looks out for themselves all too often).

Jim
 
This probably is the crux of our difference. I see those who think everything management says is a lie as being just as wrong as those who think everything the union says is a lie. I haven't seen a perfect union yet, nor have I seen a management that didn't attempt to get the most from the employees for the least cost. The only difference is that management is doing their job (albeit underhandedly at times) while the union is supposed to be looking out for the employees (but looks out for themselves all too often).

Jim
One of the most insightful, sane posts I have seen in a long time. That should be posted in the "Why would you vote for a union thread".

I agree wholeheartedly Jim. The only thing that I would point out is; most union leaders start out with the idealistic goal of doing what is right for the membership all the time. Once in the job, they realize that it is unrealistic to make the membership happy (all the time) without hamstringing the business.

I have seen synergy in union operations. It takes some very talented people to achieve it. What is sad is that most of that talent has left for better opportunities.
 
How much room does CVG have?
CVG has a single bay widebody capable hangar. I think up to a MD11 will fit. I know they have been doing a bunch of 757 HOV, which is an overnight flight control lube visit. They may also be doing the same for 738. I've also seen them doing a bunch of overnight mods that can be done outside.