Originally Posted by
longtime lurker
Why do you suppose that's happening? Because CVG's airfares are high, causing CVG metro residents to drive themselves to DAY, IND and CMH, perhaps?
WN serving IND, CMH, and SDF has something to do with it, I'm sure. WN is the largest carrier by far at CMH and NW is the largest carrier at IND with its focus city. Proper revenue management would be able to protect the existing high yields, yet allow for some discounted fares to attract traffic that drives to the other cities. Come to think of it, it isn't unreasonable to expect that DL would close up the majority-RJ focus city at IND and push some of that traffic to CVG.
DTW hasn't been right-sized as much as DL's hubs. NW still flies larger DC-9s to places where others are sending regional jets. That's likely to change after the merger. Heck, it's changing now, as the larger CRJs and ERJs come on line.
Everybody is going to feel some pain, but my work suggests that MSP is going to derive the largest benefit from parking the DC9's and adding the 70 seat regional jets.
If oil remains over $100 a barrel, they'll park it. And, as I said, CVG isn't likely to go away - it's more likely to turn into a largeish focus city like STL. The profitable traffic to major cities like New York, Washington and L.A. should remain. I'd be more worried about MEM, which could turn into PIT or worse.
PIT got what it did because the steel industry evaporated (killing its O&D traffic), and is simply further out of the way than PHL. My work suggests that MEM would see 200 or so flights per day. SLC is the one on the short end of the stick, at somewhere around 180.
Because oil is at $135 a barrel and you have to do something to reduce capacity. And the overwhelming majority of CVG passengers are lower-yielding connecting passengers, not higher-yielding O&D.
There are a number of markets in the system that are overwhelmingly connecting passengers. It makes sense to either dump them, or route them more optimally. CVG is a more optimal routing than DTW for a significant number of markets. In fact, did you know that NW and DL have the lowest ratio of O&D to Connecting traffic in the industry? Excluding WN, I think the other carriers are something like 70% OD / 30% CX, where as DL and NW combined are quite close to 50/50. That suggests to me that they need to focus on connecting traffic routing moreso than the other carriers do.
DL wanted to gobble up NW for a reason. If they aren't going to make some agressive reogranizational decisions, I don't see much of a point. And you can pretty figure they're mum on those plans right now.
The LCCs haven't touched MEM much (apart from AirTran), yet it too is most likely to go if conditions don't change.
The market dynamics between MEM/ATL are much different than those between CVG/DTW.
Something has to give if oil prices don't drop. CVG, DTW and MSP and MEM and ATL are too close to each other for all to survive as major hubs.
I really don't get into nomenclature issues. It's a wate of time and means nothing. What's important is seat count and # daily departures to which markets. I can quantify those... and then spend the rest of the day arguing what's a small hub, major hub, and focus city. In the end, everything is going to be smaller.