Delta: No More DFW Hub

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Delta flights from Dallas/Fort Worth International Airport will go from
254 daily to 21 under a sweeping restructuring plan announced this
morning.=20

"A commanding market presence is critical, and we didn't have it in
Dallas," said Delta Air Lines Inc. chief executive Gerald Grinstein in a
release.=20

Delta plans to remake 51 percent of its network, shifting flights from
D/FW to boost service from its larger hubs in Atlanta, Cincinnati and
Salt Lake City.=20

Pulling most of its service out of D/FW is part of a series of
far-reaching changes to Delta's business plan aimed at saving the
company more than $5 billion a year.=20

The company also plans to:=20

* Eliminate between 6,000 and 7,000 jobs over the next 18 months and
reduce management costs by 15 percent through pay and benefit
reductions.=20

* Ask its pilots union to give back $1 billion in wages and benefits.=20

* Simplify its aircraft, eliminating at least four fleet types in the
next four years.=20

The air service changes are scheduled to take effect by Jan. 31.=20

Since Delta chief executive Gerald Grinstein presented his plan to the
airline's board of directors three weeks ago, few hints had leaked out.=20

Delta officials and board members declined to comment Tuesday. Officials
at Delta's hub airports and its only unionized employee group - the
Delta chapter of the Air Line Pilots Association - also kept quiet.=20

As the smallest of Delta's hubs, D/FW airport represents low-hanging
fruit as the airline looks to dramatically cut costs, many industry
experts say.=20

Delta, the airport's No. 2 airline, is facing pressure from American
Airlines Inc., which commands nearly three-fourths of the market. Last
week, American announced 70 additional flights from its hometown hub.=20

Delta handled 17.3 percent of D/FW passengers - or 2.33 million - during
the first six months of the year. The carrier has steadily decreased its
market share during the last several years, and in 1991 commanded as
much as 34 percent of the market.=20

It occupies 28 gates - nearly all of Terminal E - and employs about
4,000 in North Texas.=20

'Not much left'=20

Fast-growing discounter AirTran Airways Inc., which launched a mini-hub
with four gates at D/FW a year ago, is also taking a bite out of the
local passenger base.=20

"That means there's not much left for Delta," Mr. Neidl said, adding
that D/FW Airport has been the weakest link in the carrier's system.=20

Max Wells, chairman of the D/FW Airport board and Dallas-based Oaks Bank
& Trust Co., said cuts here may be inevitable, but they may also prove
to be better for the airport in the long run.=20

Because so many Delta flights use regional jets that fly fewer
passengers, the carrier's contribution to the airport's revenue is
disproportionately small.=20

Filling the void=20

If Delta were to give up some of the 28 gates it operates at Terminal E
and its satellite, D/FW would have an opportunity to attract a carrier
using larger jets, Mr. Wells said.=20

"Somebody is sitting in those seats for Delta from this area, and some
airline is going to fill that void," he said.=20

Mike Boyd, an industry consultant in Evergreen, Colo., said Delta's
wholly owned regional partners have too many regional jets.=20

"Delta's overinvested in these planes," he said. "I don't know where
they're going to go with them."=20

Mr. Boyd expects Delta's new strategy to de-emphasize its regional jet
partners and concentrate on profitable hub flying, which should include
its hometown hub in Atlanta as well as Cincinnati and Salt Lake City.=20

=20

http://www.dallasnews.com/sharedcontent/dws/dn/latestnews/stories/090804
dnbusdelta.5824b.html

=20

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