Is Delta Breaking A "Promise" On Memphis?


As I reported in this AWIN-subscriber only story, Delta Air Lines is again cutting service at its Memphis hub, this time to below 100 departures per day, and a Feb. 1 airport deadline on adjusting its lease for terminal space and gates could soon force its hand on whether to cut even more this summer and beyond (AWIN-subscriber only article). The exact route cuts and frequency reductions are shown here.

Slashing peak daily flights to 94 as of Jan. 3 is way, way below the number right before Delta acquired Northwest Airlines and--by extension--its Memphis hub operation in late October 2008. Even today, before the new round of cuts takes effect on Jan. 3, Delta is down to 115 peak-day daily flights at the airport. In October 2008, according to Memphis International Airport statistics, Northwest operated 225. By any measure, Delta's reduction of service in Memphis has been dramatic.

That has made some people in Memphis not only unhappy but also angry, given the statements that Delta's leadership made when it still was working to forestall any government opposition to its proposed acquisition of Northwest. Back then, Delta CEO Richard Anderson told a congressional committee the merged carrier would retain service to Amsterdam, and suggested to a Memphis newspaper that the merger would increase its Memphis service, not shrink it.

In late October,  Delta decided its Memphis-Amsterdam service, which already had been scaled back to summer only, would be cut altogether. That cut, and the steep reductions in domestic service, led Rep. Steve Cohen, a Democratic congressman from Tennessee, to issue a press release blasting Delta's leadership for a "growing string of broken promises" on post-merger service in Memphis. Does he have a case? PolitiFact took a look and decided this week that Cohen is right: Delta did break its promises. Cohen, it concluded, is "accurately representing the company's record."

Nonetheless, I have two issues with that conclusion. First, on the Amsterdam flight, four years have passed since Anderson told the House Judiciary Committee that the Amsterdam flight would be retained. That's akin to a couple of decades in "aviation years" for a usually low-margin industry in which business conditions can change so dramatically, particularly regarding fuel prices, bankruptcies, consolidation, competition and the state of the economy. Anderson did not say, "Yes, we'll keep it forever."

My second issue is this, and it is not exactly a sympathetic one to Delta, Memphis, or airlines and communities in general: Why does anyone believe the assurances that airlines provide when they are trying to merge? Clearly, the leaders of the carriers are going to try to provide assurances to community leaders who might oppose the deal, they always have the "out" of citing post-merger changes in business conditions for taking actions contrary to those assurances, and--in the case of Memphis--business logic made it abundantly clear that its Delta/Northwest service would suffer because of Delta's huge hub in nearby Atlanta. I think it's safe to say that almost no one in the aviation industry believed that Memphis would be unaffected. The only question was how low Delta would go in Memphis, and whether it would remain a hub or shrink into a "focus city." Those questions still are not answered completely, but the outcome will become clearer within the next year or two. I promise.

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