Delta Cuts Flights, Can Small Cities Survive?

Last week, Delta announced what was really no surprise. Much of its small city service is unprofitable and it’s only getting worse. It wants to make changes. This isn’t a new trend; small cities have been losing service for years. But is there a way to save it? I think so.

Delta announced awhile ago that it would retire its contracted fleet of Saab turboprop aircraft that ply the skies of the Midwest and South along with some 50 seat jets. As a result, 24 small cities will see flying “adjusted” by Delta. What does that mean? For many, it means Delta will walk away. For others, the airline will partner with a small airline to re-bid for the service. For some, Delta will ask for higher subsidies.

Most of these cities are legacy Northwest cities. (Click to see the full list) In fact, of the 24, only Muscle Shoals in Alabama and Butte in Montana serve legacy Delta hubs. A whopping 15 of these cities are serviced from the Minneapolis hub, so let’s look at those in more detail. The lines below show how far those towns are from the nearest airports with half-decent levels of service. (And in some of these cases, “half-decent” is about right.) Green means that it’s less than 100 miles away, yellow is between 100 and 150, and red is over 150.


View Delta Small City Disruption in a larger map

Most of these airports have only kept service this long because of Essential Air Service program funding from the federal government. I’ve been plenty critical of this program in the past for being a waste of funds, but not all of it is a complete waste. Some of these cities truly are isolated. Take a look at International Falls, Minnesota for example. Yes, there is an airport with regional service right across the border in Fort Frances, Canada, but that’s not a great option for domestic US travel. Duluth is more than 150 miles away, and that in itself is a relatively small airport. International Falls is an isolated place.

But when government subsidies still don’t make it worthwhile for airlines, there’s clearly a huge problem. Nate Vallier wrote a column on fixing the Essential Air Service program over at AviationQueen.com. (Nate, by the way, is one of our concierges and will likely be doing some writing here soon.) I like what Nate says, and we have similar ideas.

The reality is that the deck is stacked against small cities. Low cost airlines serve large cities and have slowly moved into medium-sized cities. AirTran has led the way in that regard, and that means that its acquisition by Southwest should create more growth in that area. But other than infrequent service to leisure destinations from airlines like Allegiant, small cities are left out. Without enough service to sustain low cost airline service, they have to just hope they have any service at all. But then it goes into a spiral. Even if it’s a two hour drive to a decent-sized airport, the fares are now so much lower thanks to low cost airlines, so people flee the small cities. That leaves small cities will even less service until it goes away completely, as we’re seeing in some of these markets.

So what’s the solution? Here are my thoughts.

  1. Consolidate the subsidized route network
    For every International Falls with nothing for hundreds of miles, there’s a Tupelo, Mississippi which is less than 100 miles away from a hub in Memphis. People there would be better off driving. On top of that, as Nate mentioned, there are multiple small airports competing for service in a small area. In Iowa, three airports on Delta’s cut list lie within 100 miles of each other – Mason City, Waterloo, and Fort Dodge. Waterloo isn’t subsidized while the other two are. Maybe if the other two lost subsidies, more people would drive to Waterloo and the service there would be stronger. Let’s slice and dice to try to get a map of cities that could actually work with support.
  2. Shrink to profitability
    I know, I know. You can’t shrink to profitability, right? But I’m talking about shrinking the size of the airplane. The 9-seater is perfect for a lot of these markets since traffic is so low. These airplanes can be much more efficient to operate than larger ones (the Saab has 34 mostly empty seats), and that’s going to go a long way toward providing sustainable service.
  3. Make it a public service
    Many of the small city operators do their own thing and have limited partnerships with other airlines, if they have any at all. That makes it very difficult to provide a decent level of service into the national airspace system and that means people will just drive to an airport where it’s easier. If government money is going into service to a city, then the airlines that provide the service should offer good connections, through fares, and interline baggage capability with the airlines in the origin city. So if Sandpiper Air picks up service from International Falls to Minneapolis, then it should have to put together a partnership with Delta for easy connection in Minneapolis. There is a cost involved in that, but it’s worth it to make the service useful for more people. The government can help in that area if needed.

Now, I don’t know that these are the perfect solutions, but they make a lot more sense than what’s happening today. Money is being shoveled into flights that carry few passengers, and the airlines serving these cities simply can’t justify it anymore. Something needs to change before airlines simply give up on small cities entirely.

37 Responses to Delta Cuts Flights, Can Small Cities Survive?

  1. asimperson says:

    MSL actually used to be served by Northwest, which operated Saab service from Memphis via Tupelo. Delta then switched to jet service from Atlanta but it wasn’t enough to stop people from making the hour drive over to HSV which is not a large airport but is served by all the legacies to their east coast hubs.

    • CF says:

      Thanks for the background. I was using the Delta PDF schedule to see the flights to Atlanta, but in the reservation system, it looks like it might be going to Memphis now. Can’t quite figure that one out.

  2. Dan says:

    RIP.

    I love the euphemism “adjusted.” They were *very* careful to not use the words “discontinue service” with specific names attached.

    I actually grew up in HIB, although I never flew NW from there. However, the SF340’s are still near and dear to my heart, because it was the first plane I ever flew on. When I started college, I was living in Northern WI, and that’s what would haul my butt out to DC for college (glad mom and pops moved to MKE, ’cause it’s a lot more accessible by air). I’m actually surprised that RHI isn’t on the list, because it’s another dinky limited service airport in the upper midwest.

    Oh, me on my first flight out of CWA before they remodeled: “Yeah, what gate does my flight leave out of?” Reply: “The only one.” Those were the days.

  3. Gary Leff says:

    “that means people will just drive to an airport where it’s easier” seems like an argument AGAINST “make it a public service.”

    1. You’ve written extensively about these government grant programs for air service, how absurd and wasteful they are.

    2. I can sorta see the argument potentially for service to a place like Adak Island, Alaska. People live there, it used to be a meaningful-sized place built up around a military base which has since closed. There’s at least some justification for ‘connectedness’ of people who otherwise would be cut off from the world. Sure, maybe that’s their choice or perhaps they should consider moving, etc. but there’s an argument here.

    3. But an argument based on convenience for people who would otherwise just choose to drive to another airport. Seriously? That’s an argument for taking money away from some folks and giving those dollars to people in these towns, or more precisely to companies offering mostly-empty flights? In terms of priorities at least, if you don’t have a fundamental moral objection to taking money away from some people to give it to these companies, surely this isn’t at the top of the priorities list when 40% of federal dollars are borrowed and the debt is escalating to Greek proportions?

    There’s a simple truth. Not every city can support air service. Some folks give it a go. Perhaps there’s a business model that works. Maybe a developer wants to subsidize the service to support their real estate projects. Or maybe it’s semi-regular service through an outfit like Allegiant. Or maybe the city is just too close to convenient service elsewhere, and the cost structure too high to support little traffic, that even if subsidized the local market will STILL drive for cheaper fares.

    There’s not a lot of options for, say, American Samoa. And the politicians there rail against the pricing of Hawaiian Airlines flights even with federal subsidies. It’s a perfectly reasonable argument to say that the US shouldn’t have imperial territories like American Samoa, Guam, the Marianas… But to the extent that the US does, they need to provide some sort of air service subsidies if the market won’t support traffic on its own.

    But for places in driving distance of large hubs? Gimme a break….

    • CF says:

      Good comments. I could have written a lot more about this but tried to keep it a bit tighter so people didn’t fall asleep in the middle of the post. But this seems like a great place to address some of your thoughts.

      In general, I hate the EAS program. I do, however, like the idea behind the Small Community Air Service Development Program (SCASDP). I wrote extensively about that on BNET every year, so maybe I’ll need to bring it over to Cranky this year. The difference is that EAS is supposed to support failed service indefinitely while SCASDP is supposed to help air service get started – give it a boost to help it succeed on its own.

      A ton of EAS markets need to disappear. That alone might instantly make other markets work. The example I gave with Waterloo is what I’m talking about. If you stop subsidizing other airports within 100 miles and find the right airplane, then you might make Waterloo viable. But who is going to go into Waterloo and see if it works? Nobody. At least, not without a government subsidy to get things started.

      I do like the idea of the government effectively funding an incubator to try new things. We’ve already ended up with sustainable service to places like Santa Rosa thanks to the SCASDP.

      The reality is that there can be value in service to these cities. While the leisure traveler will drive for a long time to get a cheap fare, it’s the business traveler that will have a tougher time justifying that. Small towns are going to lose if there isn’t accessible air service within a close proximity. What is that mileage limit? I don’t know. But for some of these cities, air service is important to be able to draw business. Does that mean we should subsidize it forever? No, but if we rationalize the way to support small city service now, we could give some a shot.

      • CF says:

        I know, bad form to follow up my own comment. But I wanted to add that I still do think there are a handful of places that we should subsidize indefinitely. Most of those are in Alaska, but there are some incredibly remote places in Montana as well.

  4. Andrew says:

    I consider myself pretty well traveled within the US, and pretty well versed in geography, but I have never heard of about 75% of the cities on that list.

  5. People need to think of things differently when it comes to EAS. In a large metro area people will get in their car and drive 2 (or more) hours in traffic to get to work and 2 hours to get home in the evening five days a week, week after week. So why can’t someone get in their car and drive 2 hours to an airport for their once or twice a year trip? Most EAS service is not needed.

    Sure it’s nice to have a close by airport, but if the locals aren’t using it enough why should the American tax payers bribe an airline to fly there just so they don’t have to drive a couple of hours away. Let the local citizens and businesses chip in money to pay an airline to fly there if they want service.

  6. Scott says:

    OK; so a 36 seat Saab340 isn’t appropriate, have you ever heard of a 19 seat Beechcraft 1900, or maybe even a 9 seat Cessna Caravan?

    On Thursday I’ll put my wife on an un-subsidized once/day flight on a Beech 1900 to an airport so remote that the alternate is a 2½ hr drive, if it can work here in even more sparsely populated Canada, surely it can work in the USA.

  7. I think the problem goes deeper than air service. It speaks to the lack of a coordinated non-automotive transportation network in this country. We subsidize the heck out of the automobile as the only transportation solution for rural areas and ignore the fact that a car isn’t always the best solution. William Swelbar, in May, used Toledo, Ohio as an example of unecessary EAS service. I tend to agree, especially since Toledo is served by Amtrak and the drive to Detroit isn’t far at all. Bemidji is a different matter. It’s nearly a four hour drive from Minneapolis and during the winter, it can be quite dangerous. It does get cold in Bemidji. A city like Show Low, Arizona is a four hour drive from Phoenix. Having lived in both Bemidji and Phoenix I know the geography somewhat. It also shows that I don’t seem to mind extreme climates (although I had little choice about Bemidji since I was age 2 – 6 whan I lived there but I do remember it).

    My point is that what works for Toledo won’t necessarily work for Bemidji or Show Low. The time of fragmented one-size-fits-all transportation solutions (largely driven by who has the most money to lobby Congress with) needs to be examined. I think an honest, comprehensive cost-per-passenger-mile analysis needs to be done on all modes; an analysis that takes both capital and operating costs into consideration as well as all forms of government support (like roads, air traffic control, building airports, etc.) and transportation related taxes (including property taxes railroads pay on right-of way).

    I do agree that we need to examine the EAS system. But I also feel it should be looked at in the context of the overall transportation system in this country.

    • By the way, Brett, who says you can’t shrink to profitability? I think US Airways is a good current example of shrinking to prifitability (although marginal). The post merger US has done better than either of its predecessors. Although each side grew by addition of the other, the overall airline shrunk. Maybe “right sizing to profitability” might be a better way to characterize it?

      • CF says:

        Well, they shrunk the airline in bankruptcy, so it definitely can be done successfully . . . with help.

        On the rest of your comments, I fully support multi-modal, but I really think that rail is a tough sell thanks to the long distances (as has been mentioned below). Buses can be a good, cheap alternative in some places, and that should be considered if it can be a direct service into an airport.

    • Sanjeev M says:

      Yes, I agree. Consider the whole system. We dropped the ball on rail. Maybe we can go back to the amazing bus system of the 50’s. Bus travel is ridiculously cheap, especially for single travelers. (I <3 Megabus)

      Another option I've been thinking is some sort of express turnaround. E.g. Southwest has a MDW-SEA that can make a quick 10 min stop in Pierre, SD. Not necessarily every day either, maybe 3-weekly.

      It should be an express operation, meaning no opening the baggage hold (so no check in bags), no airport counter (all boarding passes from home). Just roll up a stairs to the plane, drop off, pick up, and run. However I'm not sure how fueling would work but I think it can be done.

      If the cost of the aircraft landing and takeoff (mainly fuel and time) can be made up by 2-3 passengers paying $200 each, then it would work. I'm sure regional airports would be more than willing to waive some fees.

      Thoughts?

      • Jason says:

        The problem with rail, bus, or driving is simply that America is very big, with remote cities. These cities would take several hours to a day to reach Minneapolis by land. Flying simply

        I think that this express turnaround with a few frequencies might work, but I really don’t think that Southwest would do it – it just doesn’t fit in with their business model. Also, checking bags would probably be very valuable to people who live in remote areas, so it should be kept. A small airport with just 1 or 2 flights a day can handle checked bags even with quick turnarounds.

        What about something more like how Alaska serves smaller cities on one of its SEA-JNU flights? Maybe DL could take an MD-88 or E170 and make a trip between MSP and SLC/SEA/back to MSP, stopping in 5 or 6 smaller cities on the way serving all those cities with one flight.

        • Jason back in the day all airlines had routes like that. Nonstop between the bigger cities, but once a day in each direction there would be the milk run stopping at a bunch of small cities in between.

          Even WN used to be good at that, but not because they intended to. I once found a flight on them from LAX to DTW that made 7 stops, but they didn’t publish that flight as LAX-DTW. I almost took it just to say I made 7 stops between Los Angeles and Detroit…..lol

        • I’m sure airlines got rid of this because landing and taking off take not just a bunch of time, but a bunch of fuel.

          But, I’m curious if they were able to do all the landings with continuous descents if that’d make it more economical.

          Now, if we wanted to get really fancy, we’d pick up on the technology that All American Aviation, the predecessor to US Airways, started with: making mail deliveries without landing. They had this fancy wire and bag system that allowed them to fly by and drop one bag, and pickup another..

        • Todd says:

          Alaska can make money on its SE Alaska milk run (and many other routes flying 737s to small, isolated cities) because all of those cities are landlocked, a situation that does not exist in the lower 48.

          • Jason says:

            Well, the argument with EAS is that the cities that are served are isolated (in Alaska they have boats and small planes) either way.
            If the demand exists for air service, then they will make money.

          • Scott says:

            AS put a lot of cargo in the belly of their planes, and that helps pay the bills where fresh food only arrives by plane.

      • CF says:

        Even if that did pick up a couple passengers, you’d lose other passengers who will run away from that flight and toward the nonstop. It’s just not something that passengers want, so it’s unlikely to return in a big way.

  8. Since most of the cities were NW markets to/from MSP, how did they perform for NW?

    Are the locals not flying because they are against DL for taking over NW or is this just a way of DL to down size MSP?

    • Jason says:

      They probably did about the same then, but costs (fuel) were much lower. Higher costs now mean higher ticket prices even though they are subsidised, which means that fewer people fly.

    • George says:

      Good questions. When I did a reply on Delta’s downsizing in Memphis, I speculated the next city to get hit would be MSP. One reply to that suggestion was that was the stupidest thing he had ever heard. I travel a lot, and talk to the airline employees. The rumor mill for a long time has been saying Delta wants to cut MSP, and just a few weeks ago, Delta annouced the closing of the simulator facilty at MSP and a consolidation in ATL, with an attendant loss of jobs at MSP.
      As for the EAS cuts, if you dig a little deeper, a lot of the flights are a bit over 50 per cent full. Great Lakes has already annouced they are taking over a few of the routes at MSP, and Delta says they will not cut the service until another carrier agrees to take it, and/orif a higher EAS subsidy could come from Uncle, they would consider keeping the service

  9. JayB says:

    The EAS program is certainly an interesting topic, and probably none of us will agree on its merits. EAS came about as a result of the dereg act…if a city subsequently lost service because carriers pulled out, then that city could look for someone to provide “subsidized” service.

    Many of the places that lost service only had it because of the local-service, milk runs that existed then, and those routes where not there because they made money. They “fostered” the growth of air transportation, or for Mr. Dupont to get service into Wilmington, Del, or whatever. To think that the EAS routes will ever be able to make money…I doubt it. And, if that’s the single criterion for success or failure of the EAS program, than it’s history.

    However, if one believes the program is only one of many “not making a profit” parts of our national transportation infrastructure, then there are various ways to try to limit costs, but still serve a public good, even if the public good might be considered rather small. Points raised make sense.

    I see the current House bill idea is to limit EAS subsidies to those cities at least 90 miles from a mid- or large-hub and where the subsidy doesn’t exceed a sitpulated dollar amount per traveler. Nice, but any congressman or senator will get DOT to issure a waiver for his or her district’s service.

    I regularly use EAS carrier service…BWI to/from Lancaster, Pa. (59,000 city population, 507,000 metro area pop.) from my abode in Virginia, right next to IAD. I drive early in the morning to BWI for a 720am flight, typically returning 530 that evening. Tomorrow will be my 20th round-trip since Christmas. [Nothing's too good for dear 97-year old Mom.]

    $98 round-trip, including $6.48 for tax and $5 for the security fee. Cape Air runs a C402, 9-pax plane, 6 round-trips on Monday and Friday, 5 round-trips Tu/We/Th, 4 round-trips Sa/Su. Timings are geared for the Lancaster people so some legs are really ferry flights, which is the one I’m on. On the morning flight from BWI, I am almost aways the only passenger, but the inbound 620am and 820am Lancaster flights are typically full–9 pax, one of whom is usually in the co-pilot’s seat. Seniors, juniors, business, college kids, you name it. I don’t believe anyone is actually terminating at BWI (except me). Most seem to be connecting to WN and Air Tran.

    I would grade the quality of Cape Air’s service as “outstanding,” (no, not luxurious, but…). Most others seem to agree and like the connections at BWI. A vast improvement over the previous US Air Express B1900 service via Pittsburgh.

    Harrisburg (not a mid- or large-hub) is 32 miles from Lancaster, PHL 82 miles, and BWI is 92 miles. Driving? For me, into the Medicare years, driving is a pain and these flights are a God-send. Getting from my place to BWI is bad enough, so a total drive is really bad. And, I wouldn’t consider flying into PHL as the drive is bad, too. Flying into Harrisburg from IAD is an option, but the fares are ridiculous and I’d have to rent a car every trip from that airport.

    I’m sure every city in the EAS program has a story. What to do?

  10. So, this is a bit wonky, but base the distance bit on the average distance from home to say the grocery store, then make it a multiple of that. In some areas people drive more, in some they drive less. This way a Wyomingite that drives all over the place isn’t under the same standard as say a Michigonian that doesn’t drive as far…

  11. ChuckMO says:

    Small town America tends to be more conservative, yet they (the local politicos) have no problem begging for Federal $$$ to maintain unprofitable air service. Since deregulation, the number of cities receiving air service has dropped considerably, and for a reason.

    Now I grew up outside of Peoria, Illinois (PIA). In the 70’s, downstate Illinois was Ozark Airlines country, with the exception of Moline/Quad Cities (MLI), which had United Airlines as well as Ozark. Now, between PIA and MLI is a town called Galesburg, which had CAB mandated service on Ozark, which managed to replace that requirement with Britt Airways, which had smaller equipment. Galesburg is roughly an hour or so away from both MLI and PIA and they are all linked by I-74. Galesburg no longer has air service, and is not EAS subsidised, nor should they be.

    Now a town like Pierre (PIR) South Dakota is relatively isolated, and the State Capital. Should that city get EAS? Maybe, but if SD wants air service to the capital, maybe SD should pony up some money rather than the Feds.

    With the exception of Alaska, due to distances, lack of ground transportation etc..I have a hard time justifying EAS in most of the lower 48. At least as a Federal program. State/Local govt entities should decide if Podunk needs subsidized air service to Legacy Hubville.

    Now I am hardly a Tea Party fanatic (social liberal, fiscal moderate for those who care), and EAS really is just a drop in the bucket of the Federal Money Trough, but cuts have to come from somewhere and this is as good a place to start as any.

    Living in “Splendid Isolation” often comes with a price. Just saying.

    • Todd says:

      Rural interests get disproportionate attention in Washington (blame each state getting two senators regardless of population, among other reasons), so EAS subsidies are no surprise (see also: farm subsidies).

  12. Wes says:

    Minor point… ALO should be linked up with CID on the map. No one from Waterloo/Cedar Falls drives to DBQ for air travel.

  13. Jeremy says:

    Poor I-Falls nice town. Maybe Delta could get gov to pay for 3/4 of the fuel bill odds are no but Might save I-Falls from cut

  14. Jim says:

    100 miles is not that far to drive in a rural area. It would take no more than 2 hours. It takes people living in LA longer than that to get to LAX in many cases.

    Maybe it would be worthwhile for the federal government to subsidize alternative transportation, such as an airport shuttle to the nearest commercial airport, for these communities.

    But all in all, EAS needs to be drastically cut back. I am really sick and tired of rural people feeling this sense of entitlement. Rural communities fought hard against the California High Speed Rail on the grounds that they would have to pay for it and not benefit, but they have no problem asking urban dwellers to pay additional taxes to subsidize their flights.

  15. A says:

    Correct me if I’m wrong, but all of those cities Delta is cutting existed prior to the days of commercial air travel. It’s not like one day the Feds doled out some EAS money to an airline and they decided to build a new city to serve with that money. If people survived their before air travel, I’m sure they can survive with the loss of their daily flight to a “hub” airport.

    MSP is my home airport so I know the geography of the region well enough to know that people from most of those cities will drive to MSP or another large airport to do their flying. These towns are not isolated like one might believe, and for that winter blizzard that sometimes shuts down the highway, well those things shut down airports too. A friend in Bemidji takes several trips each year to Minneapolis just so his wife can go shopping in the malls. If a 5 hour car ride is acceptable to load up on new fashions it’s certinaly acceptable for taking a vacation. If your business is that isolated and needs speedy travel there is always the corporate jet option.

  16. KB says:

    I think the EAS program needs a make-over. It is not a bad program or a waste of money. The subsidy money does go straight into the economy, providing jobs in the air and on the ground (unlike some other federal programs). It would be interesting to see a comparison of how many jobs are supported by this program versus other specific federal ‘job creation’ programs. It is also important to note that EAS subsidies are also not fuel-adjusted… so the airline assumes that risk when they bid which is likely what DL is seeing on these routes.

    Now what I don’t like are the small carriers providing poor service with limited or no connecting option. The idea should be to stimulate and grow these small communities to be able to stand on their own. It can (and does) happen if a carrier provides efficient, affordable, and reliable air service. Some carriers (I won’t name names) seem to just take the money and provide service haphazardly. I guess like any government program, those that abuse the system ruin it for everyone else.

    If you never heard of these cities, you probably aren’t in a position to judge their air service needs. (that’s not directed at anyone in particular, just a general statement)

  17. Michael says:

    Mesaba used to serve many of the Northern Michigan cities with decent load factors using the SAAB 340…. I’m curious if the load factors delta presents are with the CRJ aircraft… As locations like CIU have already been switched to the larger aircraft.

    http://news.delta.com/index.php?s=18&item=156

    Also, other carriers like Horizon pushed to switch to CRJs only to realize that they are less suitable and later transitioned back to turboprops.

    This feels like Delta trying to grab more subsidy.

    I agree though… Many markets like MKG and TVF should go!

    • CF says:

      If the markets are served with CRJs today, then yes these would be CRJ loads. But a lot of these markets are still served by the Saabs.

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