Business

Delta to Drop Memphis Hub

June 5th, 2013

In a memo circulated to employees Tuesday, Delta Air Lines executives said high fuel costs and a reliance on inefficient 50-seat regional jets mean Memphis is no longer a profitable hub.

As such, the airline will reduce the number of daily flights there to about 60, in the process unraveling the airport’s hub-status.A broadcast version of this story aired on WABE's All Things Considered.

Prior to its 2008 merger with Delta, Northwest Airlines maintained a robust hub at Memphis International. But following the merger, Delta slowly and steadily trimmed its operations there.

In 2012, Delta pulled the plug on its non-stop Memphis to Amsterdam flight, citing low demand.

The carrier also pulled out of smaller cities altogether, citing low demand and high fuel prices.

The decision to de-hub Memphis means 230 Delta employees there will lose their positions, although the airline said it will offer transfers, early retirement or furlough with severance pay.

“The new schedule will preserve nearly all the top destinations for Memphis customers,” Delta executives said in the employee memo. “The biggest piece of the schedule reduction is 50-seat regional jet flying, as those aircraft begin to come out of the fleet.”

Delta spokesman Anthony Black said after the cuts take effect this fall, Memphis will become Delta’s 10^th-largest market. That’s down one spot from its current status, and between Boston (9^th) and Raleigh-Durham (11^th).

The Memphis cuts have some in Cincinnati concerned their airport could be next. In recent years, Delta has greatly reduced its presence at its Cincinnati/Northern Kentucky hub, even shuttering its Comair regional airline division.

But spokesman Anthony Black rebuffs the comparison.

“This is not a hub cutting exercise,” he wrote in an Email to WABE. “It’s about putting our aircraft on the routes that meet the demand that brings back the biggest return.”