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Cincinnati Airport: Another casualty in the US hub wars

1st March, 2010

Cincinnati has a great location. Located on the Ohio/Kentucky border, it is far enough south to avoid much of the extreme winter weather that afflicts cities a bit further north. It is roughly equidistant from New York and Washington. In its annual report, the airport states that half of the US population resides within an hour’s flight and 2/3 of the nation’s major markets are only 90 minutes away.

All of this cannot have escaped the notice of Delta when it began looking for a new hub to supplement Atlanta; subsequently choosing Cincinnati in 1986. Also in 1986, the carrier had purchased Western Airlines and by 1987 had merged its hub operation at Salt Lake City into Delta’s network as well. At the time, Delta also had a smaller hub operation in Dallas but over the next decades, that base would be gradually diminished and finally eliminated in 2005.

How hubs peaked in the late '90s

As was the case at other airlines, the drive towards multiple hubs reached its apogee in the late 1990s as carriers tumbled over each other to create banks of flights over multiple hubs. The example shown depicts the daily offer between Boston and Phoenix in late summer 1998.

Boston to Phoenix Aug/Sep 1998

Nonstop

America West

3 x Daily

Direct

US Air

1 x Daily

 

TWA

1 x Daily

 

Delta

1 x Daily

 

Continental

1 x Daily

 

American

1 x Daily

62 published in OAG

Connections

American

ORD/DFW

 

US Air

PHL/PIT/BWI

 

TWA

STL

 

United

ORD/DEN/SFO/LAX/IAD

Unpublished but carrier promoted

 

Delta

ATL/DFW/CVG/SLC

 

Continental

CLE/IAH/EWR

 

Northwest

DTW/MSP

There were three nonstops operated by America West as well as one-stop, through service each on US, TW, DL, CO, and AA. Following these direct services, the OAG listed 62 possible hub connections on AA, US, TW and UA, supplied over 11 cities. United clearly took the prize in creative hub scheduling by flying passengers to LAX or SFO and then backhauling them hundreds of miles to Phoenix.

But even that was far from the whole story, as DL, CO and NW all offered connecting banks over their hubs but chose not to pay to have them published in the OAG. Nonetheless, anyone calling one of those carriers for information on flights would have been offered an additionally dizzying buffet of options over 9 more gateway cities.

When more was best: many flights not even advertised

The next chart displays the Delta services operated over their hubs between the two end points. Since almost all flights operated in and out of connecting banks, it is not unreasonable to assume that Delta offered as many as 16 additional connecting combinations (ATL 7, CVG 4, DFW 3 and SLC 2). Not only were the choices mind-boggling, but the simple number of combinations available made it fairly certain that Delta alone, on any given day, could probably accommodate everyone wanting a seat between Boston and Phoenix.

Daily Delta Flights

BOS/ATL  

9

ATL/PHX

7

BOS/CVG

6

CVG/PHX

4

BOS/DFW

3

DFW/PHX

4

BOS/SLC

2

SLC/PHX

3

At the time, all of this capacity and choice was the norm for US legacy carriers. They believed firmly that more was better and market dominance—as opposed to sustainability—was the ultimate goal.

Change of tactics as the economy (and JetBlue) attacked

Ultimately, of course, it was not sustainable. The economy softened after the tech bubble burst, and the decline that was evident in early 2001 turned to a rout after September 11. Bankruptcies led to downsizing, and even as the legacy carriers stumbled, Southwest powered on and benefited greatly from their cutbacks.

Making life even more difficult was the 2000 debut of JetBlue, which soon began to challenge the legacy carriers on what they had assumed to be “safe” transcontinental services. Eventually, everyone with a slide rule came to realize that the costs involved in multi-leg flights were greater than those for a nonstop and, because they involved a connection, generally were deemed less desirable and sold for less in competition with direct service.

Still getting worse

In more recent times, the 2008 run-up in fuel costs, followed by the current economic mess, helped to further curtail the number of connections and connecting points available. A quick look on United.com reveals that in 2010 virtually all Boston/Phoenix combinations are routed over either Denver or Chicago—along with some intermingled US Airways codeshare possibilities. LAX and SFO long ago disappeared as viable “intermediate” points.

Cincinnati has been caught in the crossfire

Because charts, even really big ones, can illustrate things germane to the topic in ways that take a whole lot of words, the table shows nonstops available from Cincinnati in February 1980, 2000 and 2010. Again, the dates have been chosen because 1980 was soon after deregulation and the service patterns were changing, 2000 represented the pinnacle of most hub and spoke networks and 2010 is, well, now.

Cincinnati connections (current routes shown in bold): 1980-2010

CVG to

1980

2000

2010

CVG to

1980

2000

2010

               

Albany

AL

DL

DL

Los Angeles

 

DL

DL

Atlanta

DL

DL

DL

Louisville

AL/PI

DL

DL

Baltimore

DL

DL

DL

Madison

 

DL

DL

Birmingham

DL

DL

 

Memphis

 

DL/NW

DL

Boston

 

DL

DL

Miami

DL/TW

DL

DL/AA

Buffalo

AL

DL

DL

Milwaukee

RC

DL

DL

Charleston WV

 

DL

DL

Minneapolis

 

DL/NW

DL

Charlotte

 

DL/US

DL/US

Montreal

 

DL

DL

Chicago

DL/AA

DL/AA/UA/NJ

DL/AA/UA

New York*

AA/TW

DL/CO

DL/CO

Cleveland

DL/FW

DL/CO

DL

Norfolk

 

DL

DL

Columbia

 

DL

DL

Oklahoma City

 

DL

DL

Columbus

DL/FW

DL

DL

Omaha

 

DL

DL

Dallas

AA

DL/AA

DL/AA

Orlando

AL

DL

DL

Dayton

DL/RC

DL

 

Paris

 

DL

DL

Denver

 

DL

DL/UA

Philadelphia

RC

DL/US

DL/US

Detroit

DL/AL

DL/NW

DL

Phoenix

 

DL

DL

Evansville

 

DL

DL

Pittsburgh

AL/TW

DL/US

DL

Ft. Lauderdale

 

DL

DL

Providence

 

DL

DL

Ft. Myers

 

DL

DL/U5

Raleigh

 

DL

DL

Ft. Wayne

 

DL

DL

Richmond

 

DL

DL

Grand Rapids

 

DL

DL

Rochester

 

DL

DL

Greensboro

 

DL

DL

St. Louis

TW/AA

DL

DL

Greensport

 

DL

DL

Salt Lake

 

DL

DL

Harrisburg

 

DL

DL

San Diego

 

DL

DL

Hartford

 

DL

DL

San Francisco

 

DL

DL

Houston

AA

DL/CO

DL/CO

Sarasota

 

SL

DL

Huntington

PI

 

DL

Savanna

 

DL

DL

Indianapolis

AL

DL

DL

Seattle

 

DL

DL

Jacksonville

 

DL

DL

South Bend

 

DL

DL

Kansas City

TW

DL

DL

Syracuse

 

DL

DL

Knoxville

DL

DL

DL

Tampa

DL

DL

DL

Las Vegas

 

DL

DL

Toledo

DL

DL

 

Lexington

 

DL

DL

Toronto

 

DL

DL

Little Rock

 

DL

DL

Washington

AL/AA

DL

DL

 

West Palm

 

DL

DL

As we have seen elsewhere, a sea change occurred between 1980 and 2000 as carriers began to claim turf and establish regional dominance. As mentioned, the Delta claim to CVG dates to 1986 and the airport saw a steady evolution from that time up till the post 9/11 plunge.

Putting all the eggs in Delta’s basket

The Cincinnati chart has some distinct similarities to what happened in Pittsburgh; with a single carrier demonstrating the ability to limit competitive inroads to only a few flights to other hubs. And, in 2000, Delta dominated even in markets where its was challenged. To Dallas, American operated 3 flights to Delta’s 5. To Houston, all service was on RJs but Delta operated 7 per day; Continental 3. The same muscular response confronted Northwest to Minneapolis, Detroit and Memphis as well as outdoing US Airways to Charlotte, Philadelphia and Pittsburgh.

Delta owned, and still do, all service to the West Coast, but today’s flights are less frequent and operated with smaller aircraft. And internationally, in 2000, travelers to Europe had five destinations from which to choose. As an added bonus, one of the flights to Portland, Oregon was operated with an MD-11 that continued on to Nagano, Japan during the short lifespan of the Delta PDX hub to Asia. This was quite a bountiful timetable for those in Cincinnati.

International services from Cincinnati: 2000

Destinations/carrier

Brussels

SN

Frankfurt

DL

London

DL

Paris

DL

Zurich

DL

All of this, of course, required facilities and space, so in 1991 a new runway was added and in 1994, $500 million was spent on terminal and landside improvements to accommodate the Delta expansion.

But as with Pittsburgh and others yet to be examined, the repositioning begun in 2001 continues to this day. From that tipping-point on, service was drawn down and Delta continued to struggle until it declared bankruptcy in September 2005. In order to cut costs, the carrier decided to focus primarily on its New York and Atlanta hubs and to further diminish the CVG operation during that process.

Delta, post-bankruptcy, looks elsewhere

The situation was further exacerbated by the move by Delta to acquire Northwest Airlines which had hubs at both Detroit and Memphis. With Detroit serving as a hub only 200 miles to the north and Memphis about 400 miles to the south and west, Cincinnati’s formerly strategic position was less critical. Furthermore, during the bankruptcy some of Delta’s CVG obligations had been nullified, a situation that was not possible at the two Northwest hubs.

In line with the overall downsizing, the following cities were eliminated entirely from the CVG network and the vast majority of the destinations are now served only with RJs. In 2010 Delta mainline operations are confined to the 14 destinations shown in bold on the chart above. The only widebody aircraft currently calling at CVG is the daily B767 to Paris. And that reality also resulted in the closure of Delta’s B767 pilot base in the city, moving 65 pilots to other bases.

Delta's discontinued routes since 2000

Discontinued routes

Albuquerque

Long Island

Allentown

Manchester NH

Appleton

Mobile

Asheville

Myrtle Beach

Austin

Nashville

Bangor

Nassau

Birmingham

Newburgh

Cedar Rapids

New Orleans

Charleston SC

Portland ME

Charlottesville

Portland OR

Chattanoga

San Antonio

Colorado Springs

Tucson

Green Bay

Tulsa

Huntsville

Westchester

Jackson MS

Wichita

Kalamazoo

Wilkes-Barre

Lansing

 

Cincinnati has been among the airports most affected by the problems afflicting US carriers, and of course, specifically Delta. The airport, like Pittsburgh, now supports terminals and airside facilities far in excess of its current needs.

And, unlike Pittsburgh that has attracted Southwest, AirTran and JetBlue, Cincinnati has seen no such influx with its single non-legacy flight operated by USA 3000 to Ft Myers. Furthermore, unlike Pittsburgh which US Airways no longer claims, Delta still shows CVG as a hub, despite massive service cutbacks and its demotion to an essentially RJ operation.

Cincinnati Business community fights back

By 2005 the business community in Cincinnati was becoming increasingly concerned with the changes at the airport. While traffic nationwide continued to be depressed, the rumors and then reality of Delta’s bankruptcy made them feel increasingly vulnerable to the vagarities the carrier’s future. Plus, they were seeing firsthand the results of US Airways’ Pittsburgh pullout and the implications for the economic health of the community.

As a result, the University of Cincinnati was asked to prepare an analysis of the airport’s economic impact. It was issued in May 2005 and was titled “The Economic Impact of the Cincinnati/Northern Kentucky International Airport on Greater Cincinnati”. This table, done in 2003 for Pittsburgh by Campbell-Hill, was featured as a warning as to what might happen in Cincinnati.

Impacts from Pittsburgh International Airport's loss of US Airways hub

  With a hub Loss Without a hub % change
Nonstop destinations 110 74 36 -69%
Daily departures 455 303 152 -67%
Daily seats 33,823 13,104 20,719 -61%
Economic impact (USD, billions) $3.10 $1.79 $1.31 -58%

The news was not good and the CVG study concluded that the hub status of CVG had added USD22.2 billion to the economy, resulting in 34,000 additional related jobs. Surveys revealed that access to an international airport ranked high on the list for many local businesspeople and that the presence of a major hub airport improved “the quality of life for the people living in the Greater Cincinnati area.”

In a study dating to 1997, the Economic Center found that access to the airport had been a part of the decision of 12 international companies to locate in the area. And using multiplier effects of air service the group estimated that Cincinnati’s upgrade to hub status had resulted in excess of 131,000 additional jobs.

No subsequent study has been undertaken but the effects of using a world-class facility for RJs cannot have had a positive outcome. And the community remains exceptionally dependent on Delta for its current level of service—more so than is the case in Pittsburgh.

Appeals to Delta too late, as global alliances change the dynamics

In Jun-2009, the Cincinnati Regional Chamber of Commerce, the local European American Chamber and the regional business community sent a letter to Delta asking that they reconsider the suspension of their service to London and Frankfurt citing “the challenges this reduction in services presents to our regional economic development efforts.” They also note that, “this reduction in direct air access to Europe will seriously deter our job attraction efforts.”

The letter goes on to reflect that, “the local community has made the investments in the CVG infrastructure to make it a world-class and world-serving airport. Couple those investments with the improving image stemming from the fare restructuring at CVG and we see a combination that encourages expanded service rather than constrictions.”

Whether or not there was any further discussion at Delta regarding the request is not revealed but the final decision is clear, in that only Paris survives and, with the dissolution of the B767 crew base, Delta has indicated that it has no intent to reverse its reductions.

To their regret, the Cincinnati business community paid scant attention to the role of alliances in the development of its airport. London and Frankfurt may have been viable as long as there was a significant network to supply passengers to the CVG origin and disperse them on arrival. But due to oneworld and Star, the European end points were dead ends in terms of onwards feed and Cincinnati, despite its European links, simply failed to have the O & D traffic necessary to sustain flights to out-of-alliance destinations.

So Cincinnati becomes yet another example of a community seduced and abandoned by an airline. It is not all the carrier’s fault, not the city's. Delta did what was deemed necessary at a point in time and the city was a willing partner. But the city assumed that the good times would continue to roll, apparently unaware of the way it had boxed itself in by fostering such single carrier (and alliance) dominance. When conditions change, airlines return, retire or redeploy their assets with minimal difficulty. The same cannot be true of terminals and runways.

Most airports and business communities are now awakening to the realities of this new world. Finding solutions to continue to expand local economies will not be easy. But this is a dynamic growth industry. Time and innovation will offer new opportunities.

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