According to the airport, a service reduction by Delta (DL) in July resulted in an 18% decline in scheduled DL flights from 274 to 224, and a 16% decline in enplanements as compared with Jul-2010.
Not as vital as Salt Lake City
As CAPA recently reported, a similar cutback is in process at Delta’s intermountain hub at Salt Lake City. But the geographical location of SLC and its ability to distribute traffic from Arizona to Montana, makes it an important, if somewhat stagnant cog in the Delta system.
But Memphis (MEM), inherited from the merger with Northwest, has far more nearby Delta hubs: at Detroit, Atlanta and marginally at Cincinnati. It also lies within 500 miles of the competing strongholds at Dallas, Houston and Charlotte.
Additionally, Delta is relatively unchallenged at the airport; a very minimal AirTran presence is the only LCC option available. Almost 85% of the seats are generated by Delta, a number that ensures little competition in a mid-sized city.
Memphis airport seats by carrier: 22-28-Aug-2011
The airport’s situation is made even more tenuous in the fact that much of that Delta service is dedicated to linking MEM with other DL hubs rather than direct service to other cities. Though Delta operates three nonstops to Los Angelese and one to Seattle, flights to San Diego, Portland or San Francisco require a connection, giving DL no real advantage in the market. Like ill-fated Cincinnati, all but a handful of MEM flights are operated with commuter aircraft, indicating relatively weak O&D traffic.
The saving grace for Memphis is, of course, FedEx. The weak economy caused a decline in freight volume (down 5.5% in July), but the dedication of FedEx to the airport and its facilities shows no sign of weakening.
However, the same is not true on the passenger side where the airport is very susceptible to changes in Delta's network policy. On the positive side, given the existing presence of AirTran and the willingness of Southwest to fill gaps left by departing carriers, the overall effect of a Delta reduction may be less dramatic than that seen over the past decade at CVG.
If any are planned, this might be a good time for Memphis to reconsider and possibly postpone any passenger-related expansions.
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