Delta airlines continues to withdraw from Memphis International Airport.
Just last week, Delta announced it would indefinitely suspend its only international non-stop flight from Memphis to Amsterdam, giving us the usual excuse of "high fuel cost" and decreased passenger demand for that service. So one has to wonder, how much longer will Delta Airlines keep a hub here in Memphis? And, what happens when Delta does finally take the hub designation away?
The answer to that last question could be found by examining an airport about 200 miles to our east. In the 1990s, Nashville was undoubtedly an "American" city. American Airlines dominated the concourses with daily non-stop flights to more than 50 cities. That is until 1995.
American pulled the hub designation from Nashville. "We had 80% of our eggs in that one business basket and they decided to pull the plug. Well that was a big impact on this airport and this community. It does not make sense to put that much of your future into that one basket." Raul Regalado took over as CEO of the Nashville airport authority just in time for the transition. He now runs his own consulting firm, but remembers his first day on the job, and the first question he was asked by the board of commissioners. "They wanted to know what to do to get the American hub back, and the first question I asked them was 'why?'"
That's a question being asked in Memphis right now. Why is being a "hub" for any airline attractive at all? From all indications, the answer could come very soon.
Delta appears to be filing a flight plan similar to the one American used to escape Nashville, cutting its number of flights in and out of Memphis by more than half in the last 10 years, down to 125 flights a day from more than 300. What if Delta does decide to "de-hub" Memphis? Is that as catastrophic as it sounds? Maybe not. Because a similar circumstance happened in Nashville. In the mid 90's, American Airlines operated almost 80% of the flights in and out of its airport. Today, it's less than 10%. Other airlines quickly came in to fill the void. Reglado says, "If there's a demand, someone will step up and fill that demand. There's always a carrier that wants to make money. "
In Nashville, that carrier was Southwest Airlines. The bright orange and blue planes now fly 80 daily routes.
Prices dropped as more competition came in. Regalado maintains, "Southwest Airlines, as they upped their flights, they are basically operating a hub here. They don't call it a hub." Southwest instead calls it one of its 14 focus cities, turning Nashville into a thriving airport with more passenger traffic and destinations than it's ever seen.
So how did Nashville survive American's departure? Janet Miller of the Nashville Chamber of Commerce maintains, "The end of the hub does not mean the end of your city." Miller says the business community made it all happen. "I will tell you that it's very important that the business community is very vocal about their needs. Because, honestly, if corporations can't get to where they do business, they won't stay in your city. That is the life blood of businesses in a lot of ways. Particularly for companies which are headquartered and have staff that need to travel around the country. So having a strong, thriving airport is one of the key economic factors for business, period. Bottom line."
Businesses in Memphis have been very vocal. CEO's of major companies like International Paper, which announced Wednesday it's looking for incentives to stay in Memphis, FedEx, and even St. Jude Children's Research Hospital all have complained about the outrageous airfares they pay to move employees and clients in and out of Memphis.
As for the future, Memphis Airport Authority CEO Larry Cox says, "We're going to look a lot more like Nashville, Tennessee than Memphis moving forward. So if you like the air service in Nashville, you're going to like the service in Memphis." Cox seems to be alluding to the inevitable. Delta's future plans don't seem to include a large presence in Memphis. And while the casual flier might rejoice at Delta's departure, businesses that depend on frequent, direct flights will need another airline, or airlines, to fill that void quickly. Cox says, "And so as the hub goes, gets smaller and smaller, we'll have more competition with airlines like Southwest and so the fares will be lower. The bad part of that is, instead of having 90 non-stop destinations you'll probably have 15 or 20."
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