Delta has announced that as of September, it will drop Memphis as a hub. There will be just 60 flights a day, down from 96 flights in the summer. Compare that to the 240 flights that were flying out of the airport in 2009.
Memphis had already become the smallest of Delta’s eight domestic hubs, but demand has fallen and the hub is unprofitable among persistently high fuel prices.
This is far from an isolated incident and is part of the growing trend of consolidation. Memphis was originally a Northwest hub. Then when bought Northwest in 2008, Delta denied that any hubs would be closed in Congressional hearings on the deal. However, Delta’s main hub of Atlanta is just 370 miles to the east, reducing its need for one in Memphis.
It’s not just Delta that is scaling back. Between 2007 and 2012 U.S. carriers cut domestic flights by nearly 14 percent. Following the news in Memphis, there are now other midsized American cities worried about their air service. When American closes its merger with US Airway, it will be the largest carrier in the world…momentarily…and then, if history is true to form, it will almost inevitably shrink the soon to be former US Airways hub in Phoenix.
Officials in Cleveland are clearly worried. It used to be a pretty large hub for Continental, but the merger with United may mean cuts in Cleveland since United’s big hub is already Chicago. It should be noted, though, that United has added a new service between Austin and Cleveland. In fact, the Cleveland Municipal Airport Authority was just approved for three grants that will aid in further development of Cleveland Regional Jetport and the closure of Hardwick Field.
That’s what it means for the airline industry, but what does increasing consolidation mean for passengers? It’s not good news any way you look at it. The law of supply and demand would clearly indicate airline fares have no where to go but up. It’s coming down to more people competing for few seats.
Watch Peter’s latest CBS This Morning report to see all the cities and airport in danger of decreased service and increased airfares.
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