While the city of Detroit itself is smallish - fewer than 1 million people - the suburbs and general region have over 5 million people. All the money from Detroit is in the suburbs and that's the population using DTW airport. It has a very specific high yield biz travel market - namely tied to the auto industry. There's a reason that Lufthansa is still there. There's a reason that Delta still flies to Nagoya - the only city in North America that can support Nagoya traffic. Basically, there's paid J class travel from Detroit to both the Frankfurt region and to Nagoya specifically. Those are but two examples. Detroit isn't Chicago or Atlanta, but it is a large metro region with a decent amount of high yield travel and a good middle class market that pays for leisure travel. Look beyond the city itself and see what there is, otherwise you fail in understanding the true market.
Originally Posted by
cerealmarketer
Definitely a strategic choice for an airline - management owns hub strategies.
For markets - you need to look at metro populations.
ATL metro is 2x CLT for example.
DTW may appear small, but bats above its weight for an airline because it enjoys the auto industry - which is full of global travel and producing as many cars as before the crisis.
Southwest by RASM is not a low yield airline. Higher RASM than any of the global airlines - it's capturing plenty of business traffic for short routes with those crosstown airports - and especially important - high margin traffic.
Now, stage length adjusted it is lower, but then Delta would also come out as the lowest of the majors on that metric which no one here is willing to be intellectually honest about - and that's because Delta has heavier short haul flight ops out of the 4 captive hubs it dominates.
Being a big piece of a smaller pie is exactly the point. The markets are meaningful, but digestible enough that one winner can most, and gets outsized margin.