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What can be done to discipline Delta's ATL monopoly and increase competition?

What can be done to discipline Delta's ATL monopoly and increase competition?

Old Sep 16, 19, 9:19 pm
  #1  
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What can be done to discipline Delta's ATL monopoly and increase competition?

Airfares -- both domestic and international -- to/from Atlanta are insane compared to other cities of comparable size. What can be done to tear down Delta's ATL fortress hub and introduce competition to the so-called "world's busiest airport"? Build a new airport in the Atlanta metro region? Call out the city of Atlanta for its cozy relationship with the airline?

Any thoughts?
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Old Sep 16, 19, 10:24 pm
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I wish you luck on your endeavors.

The airlines are a very comfortable (and government sanctioned with all the M&A rubber stamps) oligopoly -- none of them have an incentive to go after DL at ATL just as you don't see DL going after IAH (UA) / DFW (AA)
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Old Sep 16, 19, 10:28 pm
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Originally Posted by Duke787 View Post
I wish you luck on your endeavors.

The airlines are a very comfortable (and government sanctioned with all the M&A rubber stamps) oligopoly -- none of them have an incentive to go after DL at ATL just as you don't see DL going after IAH (UA) / DFW (AA)
You don't think Spirit/Frontier/Jet Blue would jump at the chance to expand service at ATL given high average airfares? You don't think the ME3 would jump at the chance to provide increased service? Norwegian?
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Old Sep 16, 19, 10:38 pm
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Doesn't Southwest currently also have a hub at ATL?
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Old Sep 16, 19, 10:56 pm
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Originally Posted by spudley007 View Post
Doesn't Southwest currently also have a hub at ATL?
Southwest doesn't serve Canada, offers very little service to Mexico, and offers no trans-Atlantic service. And its domestic presence at ATL is inadequate competition, given Delta's monopolistic presence. So, yes, SWA is nice, but it's not good enough to discipline Delta.
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Old Sep 16, 19, 11:00 pm
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Originally Posted by ajl1239 View Post
You don't think Spirit/Frontier/Jet Blue would jump at the chance to expand service at ATL given high average airfares? You don't think the ME3 would jump at the chance to provide increased service? Norwegian?
Perhaps, but there's not much opportunity for other airlines to expand in Atlanta. Delta serves 80% of the passengers that fly through Atlanta. In comparison, the next biggest, Southwest, serves just shy of 10%. Even with expansion of the ATL airport (which is already underway and Delta is heavily involved with) or a hypothetical new area airport, no competitor would be able to make a meaningful dent on Delta's captive market.

Besides, ATL is hardly the worst offender when it comes to high airfares. Looking at Q1 2019 BTS data, ATL has only the 10th highest average domestic airfare of the top 30 airports by domestic passenger volume, behind CLT, IAH, DFW, EWR, MSP, SLC, DTW, JFK, and PHL in that order.

Last edited by rucksack; Sep 16, 19 at 11:08 pm
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Old Sep 16, 19, 11:01 pm
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Originally Posted by ajl1239 View Post
You don't think Spirit/Frontier/Jet Blue would jump at the chance to expand service at ATL given high average airfares? You don't think the ME3 would jump at the chance to provide increased service? Norwegian?
ATL isn't a slot restricted airport. There is nothing preventing any of those airlines from going after the ATL market (QR and TK already exist there, and the other 3 compete on selected routes where they believe they can disrupt the oligopoly of the US3).

Again what is the incentive -- it's not collusion but there is a very clear delineation between the US3 and even AS and B6 to some extent of where to compete and where not to compete. And the government approvals of the various mergers make it essentially a government sanctioned oligopoly in the same way the cable companies have essentially divided the country up and don't effectively compete in any major market.
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Old Sep 16, 19, 11:07 pm
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Originally Posted by rucksack View Post
Besides, ATL is hardly the worst offender when it comes to high airfares. Looking at Q1 2019 BTS data, Delta has only the 10th highest average domestic airfare of the top 30 airports by domestic passenger volume, behind CLT, IAH, DFW, EWR, MSP, SLC, DTW, JFK, and PHL in that order.
For a city of metro Atlanta's size, ATL is a terrible offender.
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Old Sep 16, 19, 11:08 pm
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ATL isn't a slot restricted airport. There is nothing preventing any of those airlines from going after the ATL market
Sure, the city should be incentivizing competition. High airfares are an Atlanta quality-of-life issue -- Delta is abusing its neighbors in its hometown.
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Old Sep 16, 19, 11:10 pm
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I think you need to be careful what you wish for.

For all the complaining about DL's fortress hub status, think about the economic impact that DL has in the Atlanta area because they have a fortress hub that results in air traffic that is far and above what the market would support based on O&D traffic alone, or even if it were a smaller hub. DL provides tens of thousands of jobs in the Atlanta region and for every three jobs at Dl there is another job in the community that is created.

Further, assuming that a drop in DL flights would result in a one for one replacement by other carriers offering O&D service totally misses the understanding of the economics of hub airports. If DL's ATL hub were smaller there would not be a commensurate increase in O&D flights by the other carriers. Don't believe me? Consider the fact that ATL serves a core market of 6 million people yet is far and away busier than airports serving 5 - 7 times more people.
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Old Sep 16, 19, 11:17 pm
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think about the economic impact that DL has in the Atlanta area because they have a fortress hub that results in air traffic that is far and above what the market would support based on O&D traffic alone, or even if it were a smaller hu
Think about how much businesses and local people are punished by outrageous airfares. Maybe these airfares aren't a problem if you're Coke or CNN, but think about how much of a problem they are if you're a tech start-up firm trying to get to Los Angeles or Brussels.

DL provides tens of thousands of jobs in the Atlanta region and for every three jobs at Dl there is another job in the community that is created.
Other airlines would also provide jobs! Moreover, a more liberal market -- with lower airfares -- would increase demand for flying to/from Georgia, increasing jobs.

If DL's ATL hub were smaller there would not be a commensurate increase in O&D flights by the other carriers
I'm not just thinking of the legacy carriers.
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Old Sep 16, 19, 11:21 pm
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I smell trolling.

Originally Posted by ajl1239 View Post
Think about how much businesses and local people are punished by outrageous airfares. Maybe these airfares aren't a problem if you're Coke or CNN, but think about how much of a problem they are if you're a tech start-up firm trying to get to Los Angeles or Brussels.



Other airlines would also provide jobs! Moreover, a more liberal market -- with lower airfares -- would increase demand for flying to/from Georgia, increasing jobs.



I'm not just thinking of the legacy carriers.
Thats not how this works. Not even remotely close to how any of this works.


Tell you what though, find a bunch of Delta employees and tell them you would like to see them laid off and employed by low wage, no benefit contractors and see how it goes. Video of said events would be awesome. (because that is how it works. Delta leaves, we get left with even less flights and the little growth will be F9/NK/G4 that will bring in the lowest wage outsourced employees they can find)
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Old Sep 16, 19, 11:31 pm
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Tell you what though, find a bunch of Delta employees and tell them you would like to see them laid off and employed by low wage, no benefit contractors and see how it goes.
Nobody wants to see this happen -- and it wouldn't happen. I'm not suggesting Delta should abandon Atlanta -- you just put words in my mouth that aren't true. I'm suggesting Delta should face more competition in Atlanta. There's a huge difference.

Also, while Delta employees matter, the flyers who are being gouged by Delta also matter.

employed by low wage, no benefit contractors and see how it goes
Many Delta employees are treated worse than contractors -- this is an airline that brutally opposes unions.

Last edited by ajl1239; Sep 16, 19 at 11:33 pm Reason: additional detail
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Old Sep 16, 19, 11:34 pm
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Originally Posted by ajl1239 View Post
For a city of metro Atlanta's size, ATL is a terrible offender.
Might I remind you that the New York, Houston, Philadelphia, and Dallas metro areas are all larger than the Atlanta metro area?
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Old Sep 16, 19, 11:37 pm
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Might I remind you that the New York, Houston, Philadelphia, and Dallas metro areas are all larger than the Atlanta metro area?

The United States certainly is failing to maintain competitive markets for aviation in many large cities. Really, we need to allow Mexican and Canadian airlines to fly between U.S. cities (North American open skies) -- and, ultimately, allow European airlines to fly U.S. domestic itineraries.
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