From Deseret News archives:

A demise of Delta hub could be good for Salt Lake

May draw new carriers, lower fares

Published: Tuesday, Aug. 24, 2004 4:38 p.m. MDT
 |  E-MAIL | PRINT | FONT + - 
It might not be all doom and gloom for Salt Lake City if Delta Air Lines demotes Utah's capital from hub status as part of the company's massive restructuring plan.

In fact — based on similar situations in other cities — downgrading Delta could be good for fliers, who might see lower fares at a non-Delta hub.

On Wednesday, Delta CEO Gerald Grinstein met with the company's board to lay out his plans for changing the airline. Details of that meeting have not been released, but some analysts have speculated that the plan may include closing Delta hubs in Salt Lake City and Dallas-Fort Worth because they are not profitable.

Delta also is seeking $1 billion in concessions from its pilots and has warned that it may have to file for bankruptcy if it doesn't get those cuts. Airline officials met with representatives of the pilots union Thursday, but again, no details of any proposals or discussions have been released.

Regardless of the outcome, Utahns may take some comfort in the experience of three airports similar in size to Salt Lake City's — in San Jose, Calif.; Nashville, Tenn.; and Raleigh-Durham, N.C. — all of which have thrived since American Airlines dropped them from hub status in the mid-1990s.

Story continues below
Keith Debbage, a professor who has studied airlines for the University of North Carolina Greensboro, notes that losing a hub is not the economic death knell some may think.

"Typically when you see a large hub airline come out of a hub like that, a highly competitive low-fare carrier will come in very quickly afterward," he said.

Picking up the pieces

Such was the case in San Jose, Nashville and Raleigh-Durham, as low-fare carriers, led by Southwest Airlines, swooped in and picked up routes that American dropped. Those pickups sent airfares plummeting as other carriers lowered prices to compete with Southwest, according to sources in all three cities.

Prior to the hub downfalls, low-fare carriers had shied away from competing directly with American for business at the hub airport.

In Raleigh-Durham, prices have fallen so much since American left that people in Charlotte drive 100 miles to fly from there.

"Charlotte is largely controlled by (US Airways), which has a hub there, which gives them some very high fares that we don't see down here," said Joe Milazzo, transportation director with the Raleigh-Durham Chamber.

Across the country in San Jose, the airport is breaking ground on a massive renovation and expansion project that will increase its terminals from 31 to 40 gates. The expansion comes less than 10 years after American dropped San Jose as a hub.

Comments

You can be the first to comment on this story.

Image

If Delta Air Lines demotes Salt Lake City from hub status, one big change local fliers could see is lower fares as discount carriers move in and take up the slack.

previousnext

Latest comments

Y. tight ends talented tandem

Richard Wilson and Austin Holt are both nationally ranked TE's out of HS. I...

I know one thing for sure and that is a UTE in not a chicken (SWOOP). UTAH...

Thanks fellas - You might have literally saved that officer. Being retired LE...

Strategy over outcome in TCU-Utah

Having TCU go win a BCS game will mean far more for the conference as a...

The ordinances would make it illegal to fire or evict someone BECAUSE OF...

'08 loss 'learning experience' for TCU

Thank you so very much for having the initiative to correct the illiteracy I...

Fired trooper sues safety dept.

The action was also based on POST discipline and a history that is...

S.L. vote pending on gay protections

There have been laws on the books since the mid-1960s establishing rules for...

Hatch empathizes with Muslims

To the 10:48 commentator, Forced conversions have been much more common...

Weak and Whinny!!!

Advertisements
Advertisement