^That is fantastic to hear if it is indeed true.  I could go for the loss of a few regional flights as long as we could keep our international ones.

 

That is one PR release if I've ever seen one.  If the merger would happen there is no way all the hubs would stay as "hubs", except Memphis.  We all know Memphis is a target because they would still be profitable because its FedEx's main hub and HQ.

 

• Salt Lake City has to be a candidate based on population and O&D traffic.  Yet could stay because neither airline has a large western presence
  
• JFK could be shut as new York air space is saturated and the market share would shift with both those airlines controlling a considerable amount of international flights into EWR and JFK and to a lesser degree Boston and DCA.
  
• If SLC stays I see Minneapolis & CVG being reduced to focus cities.
   

 

There would be concessions, this article is to calm nerves because elected officials are getting pressure from constituents.  Then there is the Duopoly on Asian routes.

 

Bottom line - nothing is set in stone

 

My question is. Why change anything that's profitable??

 

Only the government can answer that question, once Delta and United/NorthWorst officially announce a merger and present the information to the DOJ - FTC - SEC.

It's profitable because they charge such damn high prices and because of the company's in the area that have to book through CVG.  Damn I woke up this morning and I was just thinking it would be nice to go to Chicago for the weekend.  Too bad I can't get a hookup like my friend who works at Delta and flies for the equivalent of I believe $40 to go to Europe.

My question is:

 

If Cincy is profitable, why did they reduce operations by roughly 40% and are now hinting at reducting operations even further if the NW-DL merger goes through?

 

There's some sort of incentive driving DL away from CVG. I'm thinking something is not quite right with ComAir beyond the existing issues. There's no way that DL's CVG operation should be shrinking (with talk of further reductions, as well) when pax are being charged more than flyers in and out of ANC.

 

I can see one reason why DL-NW would want more regional service through ATL and DTW as opposed to CVG. Those airports have current international operations that reach beyond the standard European fair of LGW, CDG and FRA. That's my best guess though.

 

If CVG's DL or DL/NW merger operation shrinks much further....a low cost carrier will get in there and try to grow something. Knowing SW's track record, I believe they'd strike and pull a Philly type operation and see how far they can get. Of course if LCC does well at CVG, that just makes CVG less desirable for DL or whoever, becuase clearly, price gouging is keeping the CVG operation alive at this point.

 

CVG's overall operation is coming to a major xroads in the next few years. It will be interesting to see how this shakes out.

 

 

AmrapinVA,Where have you been?

It'll shake out with a lot of short term pain, complaining , and despair:)

^I'd like to re-emphasize that we are all assuming that the leadership of Delta and Northwest actually know what they are doing, and what they are doing is for the long-term benefit of their companies.  I think there is a very strong possibility that neither of those suppositions is true.

We all know Memphis is a target because they would still be profitable because its FedEx's main hub and HQ.

 

Not trying to be a jerk, but what does FedEx have to do with anything?  They operate their own fleet like DHL does, right?  I mean, they're not renting out space for packages on passenger planes, so wouldn't their presence only make the Memphis airspace more crowded?

We all know Memphis is a target because they would still be profitable because its FedEx's main hub and HQ.

 

Not trying to be a jerk, but what does FedEx have to do with anything?  They operate their own fleet like DHL does, right?  I mean, they're not renting out space for packages on passenger planes, so wouldn't their presence only make the Memphis airspace more crowded?

 

FedEx is a "tenant" at the airport just like the commercial air carriers are.  MEM is the number one airport in the world for cargo shipping.  The airspace isn't crowded because the MEM hub is the smallest in the country and during the day they have limited take offs and landings on their dedicated runway and at night (overnight) FedEx takes use of all the runways when commercial air traffic dies down.

 

From an economic stand point. Every plane that takes off and lands at an airport has to pay landing fees based several factors most importantly the weight of the plane.

 

Meaning a "hub" like CVG that has very little cargo/container/mail business will see commercial and cargo revenue (since overseas flights are sometime made profitable by also shipping cargo) drop. 

 

Where as in Memphis, FedEx, IIRC, can only use it's dedicated runway during the day (and all three at night/overnight), so with less commercial take off or landing, FedEx could most likely start to use the commercial runways during the day, since there wont be as many NW planes taking off or landing.

Oh, okay.  I thought you meant profitable for Delta/NW specifically, not for the airport itself.

Damn - it looked like this hit a snag last week, but now looks like it is going to happen based on the WSJ.  Hopefully this is not a full-fledged end-to-end merger and the government has them wary of trying to implement.  WSJ also reported that any combination with UAL is not likely as they are now in serious talks with Continental.

Damn - it looked like this hit a snag last week, but now looks like it is going to happen based on the WSJ.  Hopefully this is not a full-fledged end-to-end merger and the government has them wary of trying to implement.  WSJ also reported that any combination with UAL is not likely as they are now in serious talks with Continental.

 

Continental has said they want to stand alone.  They are not in serious talks with anyone.  Also very important, until NW announces a binding arrangment with whomever, Continental CANNOT talk or discuss a merger due to NW holding "golden share".

 

Now my conspiracy theory as to why Continental has repeated they want to "go it alone".  That share!

 

Series B Stock Link.

http://www.continental.com/web/en-US/content/company/investor/docs/continental_certofcorb_2003_03_04_01.pdf

 

Although I'm not a lawyer, I'm sure Continental legal counsel & PR teams has statements ready. 

 

 

^ It looks like, "according to insiders", the UAL-Continental merger discussions will wait until Delta/NW is final but there is clearly something going on:

 

From USA today:

But the merger story did seem to advance yesterday. The Houston Chronicle says a Delta-NWA merger may end up "triggering a similar response by Houston-based Continental Airlines and United Airlines." Indeed, the Journal cites "a person familiar with the situation" in writing that "preliminary talks between United Airlines parent UAL and Continental Airlines have grown more serious" as the talks between Delta and NWA press on. "It appears unlikely, however, that Continental will pursue a deal until it is fairly certain that Delta and Northwest are going to merge," The New York Times (free registration) adds.

Source: CVG hub to stay

BY ALEXANDER COOLIDGE | CINCINNATI ENQUIRER

February 7, 2008

 

ATLANTA - Delta Air Lines is inching closer to making a deal to merge with either Northwest or United airlines, a source close to Delta said today. A deal with either would create the nation's biggest airline.  But few workers dealing with passengers would lose jobs in a merger - and no hubs, including Cincinnati/Northern Kentucky International, would close.

 

The source, who spoke to The Enquirer on condition that he not be named, said extensive talks have taken place with both Northwest and United and a decision is getting closer.  And the source added that pricing at CVG – rated the highest-priced airport in the nation to fly, according to government statistics – would probably stay the same if a merger is completed.

 

Delta officials reiterated they are contemplating mergers in the industry, but declined to elaborate. “We will not be providing updates on this process or commenting on any rumors or speculation regarding mergers or acquisitions,” said Delta spokeswoman Susan Elliott today.

It looks like the stories are heating up again - this would be good if true.  Seems the specter of government scrutiny might be helping CVG.

 

Then I would expect the Delta buildup at JFK to be axed and memphis to close.

 

I wonder if they will have to give up the shuttle as a concession?

Merger might benefit CVG

More routes, few layoffs?

BY ALEXANDER COOLIDGE | CINCINNATI ENQUIRER

February 8, 2008

 

HEBRON - It would be a big gain for the region's economy if Delta Air Lines merged with another carrier and Delta's hub at Cincinnati/Northern Kentucky International Airport remains mostly intact.  "If the hub stays, it's a huge sigh of relief," said George Vredeveld, director of the University of Cincinnati's Economic Center for Education & Research.  Vredeveld was one of the authors of a local study in 2005 that estimated the airport with its hub operations pumped $4.5 billion into the local economy.

 

He said the hub's economic impact has probably declined because of cuts Delta made while in bankruptcy, but he noted the airport remains a strong magnet for attracting new employers.  Meanwhile, the fate of Delta's regional carrier Comair, which employs 4,600 locally, is still up in the air as Delta inches closer to merging with either Northwest or United airlines, a source close to Delta said Thursday.  A deal between Delta and either target would create the nation's largest airline.

 

But few workers dealing with passengers would lose jobs in a merger - and no hubs, including Cincinnati/Northern Kentucky International, would close, according to the source, who spoke to the Enquirer on condition that he not be named.  The source wouldn't say when Delta would make a decision but confirmed extensive talks have taken place with both Northwest and United.  Delta's board is expected to meet over the next several days.

 

Portune wants changes in airport board

February 8, 2008 | CINCINNATI BUSINESS COURIER

 

CINCINNATI - Hamilton County Commission President Todd Portune, concerned over a potential merger between Delta Air Lines and another carrier, is seeking to change the structure of the Greater Cincinnati/Northern Kentucky International Airport's board.  Portune wants the Kenton County Airport Board to include more members from Ohio. He argues that the airport has not been managed to serve local businesses and leisure travelers, and that Ohio should have a greater say on the board.

 

He is inviting representatives from the Cincinnati USA Chamber of Commerce and Jim Miceli, the commissioners' appointed airport board member, to discuss the board structure.  Delta, which is rumored to be in merger talks with Northwest Airlines, controls about 85 percent of business at the airport.  The meeting will be held Feb. 11 at 9:30 a.m. on the sixth floor of the Hamilton County Building, 138 E. Court St., downtown.

 

Portune has also asked Ohio Gov. Ted Strickland to place a call to Kentucky Gov. Steve Beshear, to ask the governor to introduce legislation that would change the structure of the airport's board, giving Ohio proportionate membership and voting rights.  [glow=yellow,2,300]Also being discussed is a proposal by Portune and County Auditor Dusty Rhodes to introduce competition to the airport and a separate proposal by Portune on how to add dedicated passenger rail service from downtown Cincinnati to the airport. [/glow]

Does he plan to offer up some bonding authority to the airport or what?

 

While I agree with the last paragraph and think some sort of clear transportation system between the airport and downtown is necessary, this is classic pandering.

This seems poorly timed to me.  Recently, the picture has been less bleak for CVG.  If I were Todd Portune, the last thing I'd want to do now is to give these airlines the impression that CVG is a problem airport.  I agree with most of what he suggested, but I'd rather hear the same things in a month or two, either after Delta has officially announced that the hub will stay or when it is time to lure in replacement airlines. 

 

Also, what's in it for KY to allow OH to have more members on the airport board and voting rights?  Not that it isn't a fair request, but there doesn't seem to be much incentive for KY to accomodate this.

This seems poorly timed to me.  Recently, the picture has been less bleak for CVG.  If I were Todd Portune, the last thing I'd want to do now is to give these airlines the impression that CVG is a problem airport.

 

I don't think this would make CVG appear as a problem airport...actually I think the discussion of rail transit from CVG to Downtown Cincy would actually be a sign of positive things.

 

Also, what's in it for KY to allow OH to have more members on the airport board and voting rights?  Not that it isn't a fair request, but there doesn't seem to be much incentive for KY to accomodate this.

 

Yup...I don't see KY going for this one iota.  There is absolutely no incentive for them to restructure things and put more Ohio people on the board (unfortunately).

If portune really wants to put pressure on cvg, he should ensure that ohio hub has a stop at dayton's airport or a spur to it.

Does he plan to offer up some bonding authority to the airport or what?

 

While I agree with the last paragraph and think some sort of clear transportation system between the airport and downtown is necessary, this is classic pandering.

 

Yeah.  This isn't going to happen.  The only way to get more Ohio people running the airport is to create some sort of joint state authority like the Port Authority of New York and New Jersey.  Also, it is sort of irrelevant.  As long as the members of the Kenton County Airport Board have a regionalist vision, it would accomplish the same thing.

 

Someone said that Kentucky law prohibits dedicated taxes for transit, so it seems to me that any rail line from the airport through downtown would have to be done in some manner like the PATH system.

Someone said that Kentucky law prohibits dedicated taxes for transit, so it seems to me that any rail line from the airport through downtown would have to be done in some manner like the PATH system.

 

That's interesting.  I wonder if that applies to neighboring states' taxes.  For instance, if Ohio were to pay for a light rail line that went directly from downtown to CVG.  That will never happen, but I wonder what the legality of something like that would be. 

Chabot in Cincinnati airport hub's corner in Congress

BY LISA BIANK FASIG | CINCINNATI BUSINESS COURIER

February 15, 2008

 

CINCINNATI - Rep. Steve Chabot is using his political muscle to protect the local airport hub should Delta Air Lines merge with another carrier, but his power on Capitol Hill is tempered by fellow congressmen with interests in and near Detroit.  Chabot, R-Cincinnati, on Jan. 31 wrote a letter to Delta CEO Richard Anderson, asking him to "carefully consider" issues that would affect operations at the Greater Cincinnati/Northern Kentucky International Airport and the region.  "The Delta hub has helped create over 130,000 jobs and has a $2.85 billion economic impact on the region," he wrote.

 

Delta is said to be in merger talks with both Northwest Airlines and UAL Corp., the parent of United Airlines. If it merges with either, airline experts have said, Delta likely would pull out of Cincinnati as a hub, which could be devastating to the region.  Delta and its subsidiary, Comair, generate 86 percent of the airport's business.

^^ I gotta be honest with you all. The AP source that the Cincy Enquirer was quoting seemed a little strange to me. Delta's last action was to literally throw out 40% of it's CVG operation, but now all of a sudden there will be flights to Asia? Hunh? I smell a little "Independence Air cheerleading" to keep the pols grumbling to a murmur.

^^ I gotta be honest with you all. The AP source that the Cincy Enquirer was quoting seemed a little strange to me. Delta's last action was to literally throw out 40% of it's CVG operation, but now all of a sudden there will be flights to Asia? Hunh? I smell a little "Independence Air cheerleading" to keep the pols grumbling to a murmur.

 

People are trying to find out who this "source" is.  Some suggest, its from the inside of the Enquirer.  A person who is using this situation to hot button a story.

Maybe, but I thought that the reasoning of "the source" made sense.  CVG does consistent business with the perenially the highest airfare in the country.  It's also one of the more efficient airports nation wide.  So if the market here will bear higher rates than anywhere else in the country, why would you cut flights here and add cheaper flights at a different airport?  I'm not an economist, but it doesn't sound that far fetched.

Maybe, but I thought that the reasoning of "the source" made sense.  CVG does consistent business with the perenially the highest airfare in the country.  It's also one of the more efficient airports nation wide.  So if the market here will bear higher rates than anywhere else in the country, why would you cut flights here and add cheaper flights at a different airport?  I'm not an economist, but it doesn't sound that far fetched.

 

Jimmy that's the problem. If CVG were profitable as you say, why did DL cut 40% of the operation in favor, at the time, of lower fare flights from JFK and ATL. I don't necessarily think those super high fares = super high profitability. In fact, DL did the CVG cut to get out bankruptcy, and investors behind the DL bail out supported its plans. That tells me that CVG might have been marginally profitable and the future looked brighter at the other DL hubs. (I can't believe DL dosen't get a profit out of CVG with those outrageous fares...but who knows?) 

 

There are two fundemental problems with CVG at this point:

 

1. It's a fortress and if DL leaves the hole will be bigger than PIT's US Air or STL's TWA operation. As for Virgin America rushing in, I actually know folks at VA, they don't have the aircraft nor the intention to start a new major ops outside of their business plan for quite some time, and that plan does not include CVG. I'm not saying it won't happen down the road but it's more likely CVG would get SW service or maybe Jblu for starters.

 

2. Those fares, and DL's dominance, have chased away so many carriers, that even if DL tools down CVG's ops...no carrier is going to enter the market until they can have a route to themselves. To put it another way, CVG is so removed from other carriers agendas, that they don't really think about it anymore. That's not a great position to be in with Open Skies around the corner and the increased competition it will bring. Airports that are increasing their traffic are diversifying their portfolios, not locking into one carrier for the long term. 

 

Either way, CVG will survive with or without DL...but I highly doubt CVG-NRT is in the cards, at least in the short term.

^ Without a detailed knowledge of Delta's flight map and having never looked over their books, I'll just take a stab at why Delta would cut flights at CVG to get out of bankruptcy.  ATL and JFK are bigger destination airports than CVG.  Yes, they're both hubs.  But NYC and Atlanta are cities where a lot of passengers are flying to/from, whereas Cincinnati is a city where more passengers are connecting through.  So you can cut costs by temporarily eliminating flights at CVG, in favor of forcing more passengers through ATL and JFK, without impacting as many customers as you would by cutting flights at the other two, which have a higher percentage of origination/destination travel.  They can't operate forever like that (especially given what a mess JFK is), but as a temporary measure to get out of bankruptcy, it's a sound strategy that adversely affect most customers. 

 

 

"but I highly doubt CVG-NRT is in the cards, at least in the short term."

 

What does "NRT" stand for?

 

 

I'm not too worried about this whole situation.  CVG is an updated, well engineered airport, with mild weather in a city with an inordinate amount of Fortune 500 company HQs and other large offices for its population of ~2 million, which generates a lot of business travel.  Another airline will move in to fill the void should Delta scale back, and with our incredibly low cost of living, we're doubly screwed by having the highest airfare in the country anyway.  The best thing for businesses is for the hub to stay, but the best thing for Cincinnati travelers would be for it to go so I think I'll be okay with whatever happens.

I'm not too worried about this whole situation.  CVG is an updated, well engineered airport, with mild weather in a city with an inordinate amount of Fortune 500 company HQs and other large offices for its population of ~2 million, which generates a lot of business travel.  Another airline will move in to fill the void should Delta scale back, and with our incredibly low cost of living, we're doubly screwed by having the highest airfare in the country anyway.  The best thing for businesses is for the hub to stay, but the best thing for Cincinnati travelers would be for it to go so I think I'll be okay with whatever happens.

 

I'm more skeptical of the inherent attractiveness of CVG for other airlines.  Even though I am a "Cincinnati traveler" I am far more concerned about the airport being a spur to and catalyst for the local economy.  MyTwoSense and AmrapinVA, you both seem to understand the economics of the airline industry pretty well.  What do you think CVG can do to maintain and expand as an important port?  Do you think it's smart to try and go after a low-cost airline that caters to personal travelers, particularly when Cincinnati isn't a big origin and destination port?

^ Without a detailed knowledge of Delta's flight map and having never looked over their books, I'll just take a stab at why Delta would cut flights at CVG to get out of bankruptcy.  ATL and JFK are bigger destination airports than CVG.  Yes, they're both hubs.  But NYC and Atlanta are cities where a lot of passengers are flying to/from, whereas Cincinnati is a city where more passengers are connecting through.  So you can cut costs by temporarily eliminating flights at CVG, in favor of forcing more passengers through ATL and JFK, without impacting as many customers as you would by cutting flights at the other two, which have a higher percentage of origination/destination travel.  They can't operate forever like that (especially given what a mess JFK is), but as a temporary measure to get out of bankruptcy, it's a sound strategy that adversely affect most customers. 

 

 

"but I highly doubt CVG-NRT is in the cards, at least in the short term."

 

What does "NRT" stand for?

 

 

I'm not too worried about this whole situation.  CVG is an updated, well engineered airport, with mild weather in a city with an inordinate amount of Fortune 500 company HQs and other large offices for its population of ~2 million, which generates a lot of business travel.  Another airline will move in to fill the void should Delta scale back, and with our incredibly low cost of living, we're doubly screwed by having the highest airfare in the country anyway.  The best thing for businesses is for the hub to stay, but the best thing for Cincinnati travelers would be for it to go so I think I'll be okay with whatever happens.

 

You've partially answered you're own question as to why CVG could easily be downsized.  However, the JFK situation is much more complicated.  From what I know 60+ percent of the traffic at CVG is connecting.  CVG has the second lowest O&D traffic of any hub.  Also, indicted earlier in this thread (or the Cleveland hopkins thread) it's indicated that CVG operations were larger than Clevelands but the regional effect was much less.  Telling me that the fortress is taking a toll on the economy and that travel managers are looking at other airlines.

 

Yes, CVG has a decent amount of fortune 500's yet that doesn't mean the travel is high.  Also, CVG is not a leisure location which helps offset slumping business travel on certain routes.  That is why ATL is successful, Delta pushes almost 70% of its traffic thru Atlanta.  Its the number one connect hub in the country.  Yet ATL can fight competition on routes something that CVG cannot due.  Delta forced JetBlue out of Atlanta.

 

Again, all this is speculation, we'll just have to wait it out and see what the government agencies say.

 

The best thing for business might be for the hub to stay, but will it be the best thing for the "new" DeltaNorthWorst?

 

Also, I don't think that CVG is an up to date modern airport.  the Delta terminal is decent, but the rest is a dump.  Getting to car rental is hell.

Before all the chaos of the 00s, the non-Delta sections were due to be demolished, Comair was going to get an upfront terminal and some other changes were on the horizon.

 

CVG has tried to bring low cost airlines and they fail because Delta crushes them and half of the city has the Skymiles credit card, which ups their brand loyalty.

 

The important parts of the airport - the runways and towers - are new. They have plenty of capacity with a little more coming on board soon.

You've partially answered you're own question as to why CVG could easily be downsized.  However, the JFK situation is much more complicated.   

 

 

Temporarily, yes.  But JFK is overloaded and can't take the additional traffic that eliminating CVG as a hub would generate.  The story is similar in ATL, which is running at capacity, albeit FAR more efficiently than JFK.  One of the new hubs brought in by a merger would have to handle the increased traffic.  Companies often do things to become profitable in the short term (in order to meet conditions to exit bankruptcy) that aren't part of their long term strategy.  I would assume that this is an example of that, but seeing as I'm not running Delta, my opinion is pretty worthless.

 

 

Also, I don't think that CVG is an up to date modern airport.  the Delta terminal is decent, but the rest is a dump.  Getting to car rental is hell.

 

The important parts of the airport - the runways and towers - are new. They have plenty of capacity with a little more coming on board soon.

 

That's what I was trying to get at.  The runways are also laid out in a better fashion than JFK (for example), which eliminates a lot of the on ground wait time that some other airports see.

Delta deal this week?

THE ENQUIRER

 

Wednesday appears to be decision day on whether Delta Air Lines will merger with Northwest Airlines. The deal would create the nation's largest airline. Delta's board of directors plans to meet Wednesday to approve the Atlanta-based carrier's with Northwest Airlines, sources told the Financial Times on Friday. Northwest may also call a board meeting for Wednesday, the sources said.

 

The two airlines have agreed to exchange Northwest shares for those of Delta at little or no premium, the Financial Times reported. The Delta board, which meet in New York City, will be able to approve a deal because union negotiators have agreed on a "conceptual" plan to blend the two airlines' pilot ranks, sources told the Atlanta Journal-Constitution.

 

Dealing with the Air Line Pilots Association is crucial because previous mergers have ended up in fights over seniority lists that have been so contentious they have either resulted in arbitration or lawsuits. Both Delta's and Northwest's pilot unions want a merger to give them stock in the new airline and allow them to reverse pay and benefit cuts from bankruptcies at both carriers, the sources told the Atlanta paper.

OK.  Now lets see how the Government will play ball.  Once announced, Continental will be sure to formally announce talks with United or American.  then we can all speculate how Cleveland will fare.  Let the games begin!

Delta-Northwest deal could mean fewer cheap seats

If a big airline combination is approved, frugal fliers could feel the pinch.

By Kenneth Musante, CNNMoney.com staff writer

February 19 2008: 9:18 AM EST

 

NEW YORK (CNNMoney.com) -- It may be time to wave goodbye to some of those discount fares.  If Delta Air Lines and Northwest Airlines complete a merger to form the largest U.S. airline, travelers can expect fewer deals and higher fares on some remote routes.  A combination has been rumored for weeks and reports Tuesday indicated that a deal was close.

 

Small and mid-size markets will likely be the first to feel the squeeze, said airline consultant Michael Boyd.  For example, Delta or Northwest handle most of the flights for Roanoke, Va. - those fares would likely rise as travelers' options are reduced, Boyd said.  The potential for higher fares is one reason a Delta-Northwest deal would get a lot of scrutiny from antitrust regulators and Congress.  At a Senate hearing a year ago, many senators expressed concern that any airline merger would produce other deals that could leave about 80% of the nation's air traffic handled by only three new mega-carriers.

 

Find this article at:

http://money.cnn.com/2008/02/19/news/companies/northwest_delta_merger/index.htm?cnn=yes 

 

Okay.  I desperately wanted CVG to no longer be the most expensive airport in the country, but not because the other airports got more expensive!  I should have been careful about what I wished for, I guess.  It's a Monkey's Paw situation!

^"The turkey's a little dry..."

^ LOL!

Delta, Northwest shares fall amid merger doubts

Mon Feb 25, 2008 6:47pm EST

 

NEW YORK (Reuters) - Delta Air Lines Inc and Northwest Airlines Corp shares fell on Monday partly on concerns their merger talks may fail on the inability of pilots to agree on how to combine their ranks.  Separately, the labor union representing baggage handlers and customer service workers at Northwest spoke out forcefully against any deal, saying the combination was bad for workers and service. 

 

Although shares of other big airlines were up, Delta and Northwest were hit by twin concerns associated with uncertain consolidation prospects and the steady increase in fuel prices.  Crude oil prices on the New York Mercantile Exchange rose for the seventh time in the last eight sessions on Monday, rising above $99 a barrel.

 

Delta lost 22 cents, or 1.3 percent, to close at $16.15, while Northwest shed 41 cents, or 2.5 percent to $15.86. In after hours trading, Delta slipped another 7 cents while Northwest dropped another 4 cents.  Delta and Northwest have been discussing a deal that would create the world's largest airline.  Speculation intensified last week that a merger was near, but cooled by the weekend with no agreement from pilots on combining their seniority lists and no announcement from the airlines that they would move forward.

 

Full story at http://www.reuters.com/article/businessNews/idUSN2536355620080225

 

^ Without a detailed knowledge of Delta's flight map and having never looked over their books, I'll just take a stab at why Delta would cut flights at CVG to get out of bankruptcy.  ATL and JFK are bigger destination airports than CVG.  Yes, they're both hubs.  But NYC and Atlanta are cities where a lot of passengers are flying to/from, whereas Cincinnati is a city where more passengers are connecting through.  So you can cut costs by temporarily eliminating flights at CVG, in favor of forcing more passengers through ATL and JFK, without impacting as many customers as you would by cutting flights at the other two, which have a higher percentage of origination/destination travel.  They can't operate forever like that (especially given what a mess JFK is), but as a temporary measure to get out of bankruptcy, it's a sound strategy that adversely affect most customers. 

 

 

"but I highly doubt CVG-NRT is in the cards, at least in the short term."

 

What does "NRT" stand for?

 

 

I'm not too worried about this whole situation.  CVG is an updated, well engineered airport, with mild weather in a city with an inordinate amount of Fortune 500 company HQs and other large offices for its population of ~2 million, which generates a lot of business travel.  Another airline will move in to fill the void should Delta scale back, and with our incredibly low cost of living, we're doubly screwed by having the highest airfare in the country anyway.  The best thing for businesses is for the hub to stay, but the best thing for Cincinnati travelers would be for it to go so I think I'll be okay with whatever happens.

 

Look I wasn't putting down CVG in the least. I was just bringing up an inherent problem if Delta would move out. It used to be a strategic advantage to have little competition at your airport up to 9/11. An airline could charge high fares with O&D pax, and offer unique service that may not be operating at neighboring airports. But with most of the legacy carriers in financial trouble, having a carrier with a presense outside of the hub helps these days. Really helps. Even though SW has moved into places like PIT and STL, it has been a struggle at times to get fairly minor operations up and going. There's more than just will behind starting new ops.  Primarily, you need the aircraft. Most airlines have long term plans in how to rotate and operate planes. There is always some flexibility within these plans, but it's very unlikely an airline would "reserve" 100+ aircraft that SW or Virgin America would use on existing flights eleswhere on the possibility that Delta would leave CVG. So this idea that a VA or SW would come in right after Delta leaves with lots of flights, is a suspect idea at best. If Delta goes, you'd see a definite downturn passenger flight operations for several years.

 

As for international service, speaking bluntly, I agree with MTS, without the domestic ops to support international service, there's little chance of Virgin, Air France, British or Lufthansa coming to CVG without the Delta hub. To put it another way, when CVG was one of the 20 largest US international airports in terms of total pax, it didn't attract an outside international carrier except for Air France who was there due to the code sharing agreement between itself and Delta. If Delta leaves, it's likely to fall out of the top 50. It would seem counterintuitive to start new international service with fewer pax connecting through an airport.

 

That being said, I like CVG. I wish CLE had the terminal ammenities that CVG already has. I've said as much on the Hopkins threads. So this is not a Cleveland vs. Cincy thing, as I've been tagged with in the past. Just honest observations on the situation.

 

NRT -- Tokyo/Narita. The primary gateway into the Far East. The Asian reference just smelled like airline PR BS to me.

 

Well, the merger seems like more BS to me raise legacy airline stock prices. I could very wrong, but I think the merger will not happen and CVG will be fine.

I'm curious if anyone knows the answer, but am too lazy to look it up on my own...

 

What sort of tax dollars/revenues from CVG come to Cincinnati/Hamilton County? I can't imagine that airport being built in Ky without some revenue sharing scheme between Ky and Oh.

 

I know the airport is considered a big asset to business in the city since it is a hub, but are its benefits entirely indirect, encouraging business growth but providing no real revenues to the city it supports?

0$

Delta cutting jobs, flights

BY ALEXANDER COOLIDGE | CINCINNATI ENQUIRER

March 18, 2008

 

Delta Air Lines said this morning it will offer voluntary severance payouts to roughly 30,000 employees – more than half its work force – and cut domestic capacity by an extra 5 percent this year as part of an overhaul of its business plan to deal with soaring fuel prices.  While no details were available, cuts to domestic flying could have serious implications here as Delta's Cincinnati/Northern Kentucky International Airport hub is mostly a domestic operation – much of the flights provided by regional jets.

 

The region’s dominant carrier said it will cut U.S. flights, park and sell up to 45 jets and would institute two voluntary severance reduction programs, which it hopes will shrink the payroll by cutting about 1,300 front-line workers as well as 700 administrative and back-office employees.  Atlanta-based Delta had 55,044 total full-time employees as of the end of last year, including 2,700 based at the airport in Hebron, the airline's second-largest hub.

 

for those unhappy about tornado coverage.....  :roll:

 

Delta offers to buy out 30,000 workers

The airline offers severance payouts to more than half of its workers, will cut 5% of capacity as part of its plan for rising fuel prices.

Last Updated: March 18, 2008: 11:22 AM EDT

 

ATLANTA (AP) -- Delta Air Lines said Tuesday it will offer voluntary severance payouts to roughly 30,000 employees - more than half its work force - and cut domestic capacity by an extra 5 percent this year as part of an overhaul of its business plan to deal with soaring fuel prices.  Executives at Atlanta-based Delta said in a memo to employees that the airline's goal is to cut 2,000 frontline, administrative and management jobs through the voluntary program, attrition and other initiatives.

 

A spokeswoman says that if more than that amount agree to take the voluntary severance, it will be allowed. The severance program primarily affects mainline Delta employees. It will not affect Delta pilots, who have a union contract with the company, and employees at Delta regional carrier Comair, which is based in Erlanger, Ky.  Delta had 55,044 total full-time employees as of the end of last year.

 

Full story at http://money.cnn.com/2008/03/18/news/companies/delta_jobs.ap/index.htm?cnn=yes

March 18, 2008

Pilots’ Talks Apparently Fail in a Northwest-Delta Hookup

By JEFF BAILEY

 

Pilots at Delta Air Lines and Northwest Airlines appear to have given up efforts to combine their seniority lists, which was considered essential to the two carriers’ hopes for a merger without crippling rancor.  Both carriers may soon announce cutbacks in service instead, as they adjust to $100-a-barrel oil and an expected slowdown in business travel.

 

Lee Moak, chairman of the Delta chapter of the Air Line Pilots Association, said in a letter to the carrier’s 6,300 pilots on Monday that seniority talks with Northwest’s 4,500 pilots — he did not name Northwest, but others have confirmed that the two sides were in negotiations — had broken off.

 

Full story at http://www.nytimes.com/2008/03/18/business/18air.html?_r=1&oref=slogin

 

So far, Delta and Delta Connection will cut the following routes from CVG:

 

Cincinnati - Bangor, ME

Cincinnati - Burlington, VT

Cincinnati - Colorado Springs, CO

Cincinnati - Jackson, MS

 

Many routes are also seeing frequency reductions, but those have not been completely tallied up yet.

^No major losses yet then.

there goes my summer trip to jackson.

And Toledo is only served by CVG now.

 

Edited to add:  . . . Delta only serves Toledo through CVG . . .