One of the more laughable rumors in recent memory has come to the surface in recent days. The rumorville is buzzing with the possibility of a Delta hub in St Louis. What a stupid idea. This rumor is either completely wrong or Delta is a lot dumber than I thought. My guess is that this is just being completely blown out of proportion.
Watch this news report and then come on back for more discussion.
The rumors say that Delta is looking to establish up to eighty flights a day in St Louis. The Mayor confirmed that Delta was in town to talk, but he didn’t say anything about a “hub” per se. The local media seems to have jumped on that and run with it when in reality, Delta may just be looking for a few additional opportunities, if that.
St Louis isn’t a tiny operation for them. When LaGuardia starts in September, they’ll be up to 34 flights per day as follows:
- Atlanta 8x
- Cincinnati 3x
- Detroit 6x
- JFK 1x
- LaGuardia 4x
- Memphis 3x
- Minneapolis/St Paul 6x
- Salt Lake City 3x
Is it a huge stretch to see that number get up to 80 flights per day? Yep. I can’t see it. Where are they going to go? American still covers a few of the other major local traffic destinations with Southwest ramping up as well. But the news reports focus on how St Louis lacks service to Europe.
Ah, there’s a possibility. Delta is not shy when it comes to subsidies. In fact, they launched a mega-money loser in Pittsburgh by connecting the city with Paris. But the money is being lost by the city, not the airline, so it’s an easy one for Delta to do. That flight, however, is flown by a 757 while anything from St Louis to Europe is bound to require at least a 767 unless they feel like stopping somewhere along the way to fill up. (Which, by the way, is a sure-fire way to make this lose even more money.)
So why was Delta in St Louis to talk? For the same reason every airline talks to every airport. They’re always looking for good opportunities. St Louis isn’t going to be one of them, I hope, but it won’t be because of something the airport did wrong. The report mentions the lack of terminal space as a possible impediment. This is a joke, right? Pittsburgh may be the only airport in the country with more empty gates. If Delta wanted to come in and set up a hub, you know they’d bend over backwards to find space that Delta likes.
The other issue mentioned is the fact that the airport is expensive. This is true, but they aren’t really looking at the right metric. The cost per enplanement was in the $10 range a couple years back and that’s the metric to look at. It’s likely to rise a few dollars more before things get better. This isn’t a surprise. As the airport loses service, the costs have be spread over fewer enplanements. It’s ugly.
The report compared St Louis to Memphis, Delta’s closest hub. Memphis runs in the $6 to $7 range per enplanement, so it is a significant difference, but that doesn’t mean that Delta will go running to St Louis if costs come down.
Northwest found a way to make Memphis work, and Delta has done very little to screw that up . . . yet. That’s why while we’ve seen Cincinnati get slashed, Memphis has remained fairly stable. But what’s a great way to ruin a good thing like that? Open a new hub 250 miles north. You throw a bunch of flights into St Louis and you undoubtedly hurt Memphis, something that works well.
In the end, we might see a few more flights and even a Europe run if St Louis wants to subsidize it, but a hub? We won’t see it. (And if we do . . . wow . . . that will be just an awful move.)