The Free Press, Mankato, MN

Business

June 4, 2013

Delta to drop Memphis hub

Airline inherited hub when it brought Northwest

MINNEAPOLIS — Delta Air Lines said Tuesday that it will drop its money-losing hub in Memphis, Tenn., this fall, slashing flights there and eliminating 230 jobs.

The cuts begin Sept. 3, right after Labor Day weekend and the end of the busy summer travel season.

It’s the outcome that was feared in small hubs like Memphis, Cincinnati, and Salt Lake City when the wave of airline mergers began five years ago with Delta’s purchase of Northwest Airlines. Northwest had used Memphis as a hub, meaning it funneled passengers through there on their way to other destinations such as New York or Florida. For travelers, flying from a hub city means fewer layovers and a bigger choice of destinations.

Delta flew as many as 240 flights per day out of Memphis in June 2009, including a flight to Amsterdam. It has been ratcheting that number down ever since. It offers about 96 flights per day now, and will drop to 60 in the fall.

When it bought Northwest in 2008, Delta executives said repeatedly that no hubs would be closed because of the merger. The possibility of hub closures was a major topic of Congressional hearings into the deal.

At the time, Northwest executives said their Memphis flights made money. But Memphis was widely believed to be on borrowed time as a Delta hub. Atlanta sits just 370 miles to the east, and Atlanta-based Delta has turned that city’s Hartsfield-Jackson International into the world’s busiest airport, reducing its need for Memphis.

Demand has fallen and fuel prices are persistently high, making the Memphis hub unprofitable, Delta spokesman Anthony Black said on Tuesday. There’s only enough demand for 50-seat regional jets on most routes, and Delta is phasing those planes out, he said.

Asked whether other Delta hubs are likely to be cut, Black said, “Delta continually reviews the viability of all markets and there are no other significant changes planned at this time.”

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