A demise of Delta hub could be good for Salt Lake
May draw new carriers, lower fares
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.
"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.
"The good news for us (after American dropped the hub) was that eventually we were able to provide a better carrier mix at the airport," Mineta San Jose International Airport spokesman Fernando Pena said. "One of the low-fare carriers came in and added a bunch of flights, and that was Southwest."
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