Delta Air Lines announced today that it will be cutting departures at its Memphis hub by 25 percent. These cuts are part of an overall reduction of flying in response to rapidly rising fuel prices. Interestingly, the cuts are focused on regional flying by Delta Connection partners, and for now at least, mainline flights are not affected, and some routes are even upguaging to larger aircraft.
One could argue that this is just a natural progression of the merger, and an elimination of a duplicative hub to Delta’s Atlanta operations. You could also ask if this will lead to the elimination of one too many hubs in the industry overall. Maybe. However, I think the most interesting aspect is that mainline operations are being maintained while 50 seat regional jet flying is getting the ax. Personally, I believe that the end is near for the low hanging fruit of regional airline operations, the 30 to 50 seat regional jet and older turboprops that are left. With fuel prices as they are, you need to charge a fare that rivals the budget deficit in order to have a shot at making money with these smaller airframes.
The 50 seat jet market hit critical mass years ago and just kept going. They may offer lower trip cost overall, but on a seat mile basis, the numbers just don’t add up at stratospheric fuel price levels. I think Delta’s move to ground 50 seat regional jet flying in Memphis is just the beginning, and that you are going to see similar moves across the industry. Stay tuned. This could get cute. And if fuel keeps going up, plan on more than a few of those 75 seat jets turning into a beer can near you too.
