This will hit MEM hard
Mar 23, 2011, 1:34 pm
#76
Join Date: Nov 2003
Location: ORD / MDW / FLL
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That's a pretty boiler plat answer, but it rarely answers the question of value for who? The long term investor or the short term investor? They are making some painful short term cuts that will certainly cut costs. But long term those cuts may become a barrier to generating revenue once the economy recovers.
True, but I'm not sure how this plays out differently since WN doesn't use a traditional hub and spoke model. They have mentioned that when the merger with FL is complete they will evaluate routes on a case by case basis. Additionally, to their credit, WN's operational model (and marketing) have been so successful they've never found themselves in the situation of needing to significantly curtail ops in a major market of theirs. The did pull out of SFO a while back but I don't think it was a major focus cirty for them at that time.
Mar 23, 2011, 1:56 pm
#77
Join Date: Oct 2009
Location: MEM
Programs: AA - PP
Posts: 887
Mar 23, 2011, 2:00 pm
#78
Join Date: Oct 2009
Location: MEM
Programs: AA - PP
Posts: 887
Regardless of the wording, does anyone honestly expect DL to maintain pre-merger ops in the face of an anemic economy and fuel prices on the rise?
Folks...DL is a for-proit business and for-profit businesses are focused on ONE things: shareholder return. Every business creates value for its shareholders differently but in the end they are there to make money. WN is no different. If they can;t make money in a market they pull out as well.
If the economics of the MEM hub don't work they don't work. Paxs and politicians can pi@@ and moan all they want but it's a business decision pure and simple. When DL pulls back if WN or anyone else decides to make a play for MEM then DL will have to live with the consequences of their decision.
Folks...DL is a for-proit business and for-profit businesses are focused on ONE things: shareholder return. Every business creates value for its shareholders differently but in the end they are there to make money. WN is no different. If they can;t make money in a market they pull out as well.
If the economics of the MEM hub don't work they don't work. Paxs and politicians can pi@@ and moan all they want but it's a business decision pure and simple. When DL pulls back if WN or anyone else decides to make a play for MEM then DL will have to live with the consequences of their decision.
Mar 23, 2011, 2:09 pm
#79
Join Date: Feb 2011
Posts: 12
I think the main point here is that the MEM authority need to figure out a cheap airline that doesnt need as much O&D as DL or NWA needed.If travel was more affordable there would be more O&D.
There is no city ,except for MAYBE ATL, that you can fly to cheaply.
Mar 23, 2011, 2:22 pm
#81
Join Date: Oct 2008
Location: ARN
Posts: 1,034
I can't believe nobody said this yet...
The Sky Club in MEM is Awesome! On Par with DTW centerpoint or the good ones at ATL. Maybe even better. The people are incredible and the layout is smart so it is easy to find privacy and make some space around.
Or sit in the bar which has a sports bar slash theater feel to it. Great place to watch a game in between flights.
This is all pretty interesting to watch. As a frequent flier and stockholder I have mixed feelings.
The Sky Club in MEM is Awesome! On Par with DTW centerpoint or the good ones at ATL. Maybe even better. The people are incredible and the layout is smart so it is easy to find privacy and make some space around.
Or sit in the bar which has a sports bar slash theater feel to it. Great place to watch a game in between flights.
This is all pretty interesting to watch. As a frequent flier and stockholder I have mixed feelings.
Mar 26, 2011, 6:51 am
#83
Join Date: Jan 2010
Location: SEA
Programs: UA AS DL Hyatt SPG/Bonvoy HHonors
Posts: 2,008
Another recent instance is that in awarding Delta two Tokyo-Haneda routes, the government cited Delta's plan to operate 747-400's on the routes as making Delta superior to other airlines who proposed to operate 777's. Lo and behold, by the time Delta started flights they used 777's (and they are now both suspended after the earthquake).
It seems a bit cynical of an approach to tell people what they want to hear, probably with just enough qualifiers to allow wiggle room so you can cite changes in circumstance. Usually it's politicians that do this, but Delta seems to have it down to an art from, too.
PS: A hub like MEM needs sufficient O/D traffic to be profitable. If ATL were overwhelmed with delays, MEM could have a role as a relief hub. But now, instead of planning for traffic growth, DL is planning for consolidation, so they don't need MEM as a relief hub. If high fuel prices make the CRJ flying diseconomical, it is easy to see MEM in a downward spiral. Each reduction in spokes reduces the traffic on the remaining flights. For connecting itineraries, DL has alternate hubs to capture the traffic. If fuel prices stay high, and ATL can meet demand, MEM is headed for an outcome like CVG or PIT
Last edited by seacarl; Mar 26, 2011 at 6:57 am
Mar 26, 2011, 8:17 am
#84
FlyerTalk Evangelist
Join Date: Jul 2003
Posts: 23,020
There has been a pattern of Delta making promises to win governmental approvals, and then Delta doing something different. I'm sure Delta will argue that circumstances changed.
Another recent instance is that in awarding Delta two Tokyo-Haneda routes, the government cited Delta's plan to operate 747-400's on the routes as making Delta superior to other airlines who proposed to operate 777's. Lo and behold, by the time Delta started flights they used 777's (and they are now both suspended after the earthquake).
It seems a bit cynical of an approach to tell people what they want to hear, probably with just enough qualifiers to allow wiggle room so you can cite changes in circumstance. Usually it's politicians that do this, but Delta seems to have it down to an art from, too.
Another recent instance is that in awarding Delta two Tokyo-Haneda routes, the government cited Delta's plan to operate 747-400's on the routes as making Delta superior to other airlines who proposed to operate 777's. Lo and behold, by the time Delta started flights they used 777's (and they are now both suspended after the earthquake).
It seems a bit cynical of an approach to tell people what they want to hear, probably with just enough qualifiers to allow wiggle room so you can cite changes in circumstance. Usually it's politicians that do this, but Delta seems to have it down to an art from, too.
Mar 26, 2011, 5:12 pm
#86
Join Date: Jan 2011
Location: TUP, MEM
Programs: DL DM, SPG Gold, Privium, CBP Global Entry, Delta Reserve AMEX, Delta Reserve Business AMEX
Posts: 231
Mar 26, 2011, 5:15 pm
#87
Join Date: Jan 2010
Location: SEA
Programs: UA AS DL Hyatt SPG/Bonvoy HHonors
Posts: 2,008
Mar 26, 2011, 5:17 pm
#88
Join Date: Jan 2010
Location: SEA
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Posts: 2,008
Mar 26, 2011, 5:28 pm
#89
Join Date: Jan 2010
Location: CLE
Programs: UA,WN,AA,DL, B6
Posts: 4,168
There is another way to look at O&D traffic and a Hub. Since ORD and ATL have higher O&D traffic then less reason to have to bring in tons of people to help fill planes and smaller hubs can be utilized. At one time they thought about putting a big wayport in the middle of the country, just a airport where people can chanyhe planes. Not sure where the employees would live under this concept.
The Southwest model seems to work fot them as they always have made money using multiple airports to handle connecting traffic instead of having giant hubs.
The Southwest model seems to work fot them as they always have made money using multiple airports to handle connecting traffic instead of having giant hubs.
Mar 26, 2011, 5:51 pm
#90
Join Date: Jan 2010
Location: SEA
Programs: UA AS DL Hyatt SPG/Bonvoy HHonors
Posts: 2,008
There is another way to look at O&D traffic and a Hub. Since ORD and ATL have higher O&D traffic then less reason to have to bring in tons of people to help fill planes and smaller hubs can be utilized. At one time they thought about putting a big wayport in the middle of the country, just a airport where people can chanyhe planes. Not sure where the employees would live under this concept.
The proposal for a big mid-America wayport never took off because the economics now require a significant component of O/D traffic to make a hub work. Purely connecting traffic is both expensive to operate and on average is low yield.