18-Jul-2011 10:40 AM

Delta to adjust service to 24 smaller, underperforming markets

Delta Air Lines notified (15-Jul-2011) the US Department of Transportation (DOT) of its plans to adjust operations in 24 smaller, under-performing markets. Services in these markets on average depart with 52% load factor, with some locations as low as 12%. In connection with the retirement of it's 34-seat Saab turboprops, which it is phasing out by the end of 2011, and to halt USD14 million in annual losses, the changes will affect Essential Air Service (EAS) markets. The notification provides the DOT the opportunity to select a new carrier to begin service in affected EAS communities within a 90-day period. Delta will continue to serve the affected communities through its Delta Connection partners until the DOT selects a replacement carrier and appropriate funding is available. In some cities, Delta is coordinating with other carriers to bid on the routes. In addition, Delta will to continue service in some subsidized and non-subsidized markets, but the subsidy rate must be higher in order for Delta to fly larger regional jets on the routes in question.

Delta: "While Delta would prefer to continue serving these communities, the new reality of mounting cost pressures faced by our industry means we can no longer afford to provide this service. As we continue to strengthen our business, Delta is retiring the Saab turboprops and some 50-seat jet aircraft, which will hinder the financial viability of serving these smaller markets. Delta has taken a number of steps to respond to added cost pressures. Delta previously announced its intention to reduce capacity this fall by 4% and retire 140 aircraft. Delta has reduced its facility costs at 170 airport locations and 10 cargo locations across the system, saving more than USD80 million annually." Company statement.

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