The restructuring at Delta Air Lines has major implications for the size and shape of US hub airports. When it dismantles its Dallas/Fort Worth (DFW) hub in February, retreating from competition with dominant American Airlines, Delta will remodel its fortress at Atlanta's Hartsfield International airport into a continuous hub.
The carrier will lower operations there from about 80 an hour to 66, but increase total flights from 970 to 1,051 a day. The depeaking of Atlanta will accompany a similar smoothing-out of its secondary hubs at Cincinnati and Salt Lake City. Both these airports will have more flights a day, but fewer an hour, with Cincinnati going from 590 to 619, and Salt Lake City from 318 to 376. Most of the increase is on Delta Connection carriers. Salt Lake City gets 58 new flights to 13 new destinations.
When Delta drops from 254 daily flights to a mere 21 at DFW, it clears the way for American to buttress its dominance of the Texas airport. American now accounts for 64% of domestic departures but will move to more than 70%. Fitch Ratings, which estimates that American could achieve a market share of as much as 85% at DFW, notes that both DFW and Atlanta will become more dependent on a single carrier.
DFW says it could lose as much as $20 million in annual revenue from the Delta move, but other carriers will fill some of the void. A week before Delta's announcement, American said it would add about 70 daily flights to 31 cities - a 10% increase - at DFW by summer 2005.
As Delta drops from 28 gates to just three at DFW, AirTran Airways is expected to increase its presence and other low-cost carriers may follow suit. Of the 5.7 million passengers a month at DFW, only about 252,000 travel on low-fare carriers.
FAA administrator Marion Blakey said Delta's Atlanta initiative was an effective short-term solution until the airport's fifth runway opens in 2006. The Delta plan at Atlanta differs in one major aspect from the depeaking of Chicago O'Hare pioneered by American four years ago: O'Hare operations have since been further constrained by government pressure that compelled both American and United to reduce operations there by more than 5% and even more cuts may be required by the FAA.
Source: Airline Business
