On Friday, Delta announced that it would shut down its regional subsidiary Comair. This has been expected for some time so the announcement wasn’t exactly breaking news. What was more interesting was how carefully Delta crafted its press release on this matter.
Just because it wasn’t a surprise doesn’t mean it’s not sad to see Comair go away. The airline was one of the earliest Delta Connection carriers and has been affiliated with Delta for almost three decades. The airline’s heyday was in the early 1990s. It was the first US airline to begin the RJ revolution when it started flying the 50 seat CRJ in 1993. The next year, it opened a state of the art regional concourse at its home-base in Cincinnati. Things were going very well. In fact, the airline had done so well in the 1990s that Delta purchased it in 2000 for over $2 billion.
But things went downhill quickly. The airline suffered through a nasty pilot strike in 2001 that shut it down. It was then that airlines realized diversifying operations across multiple carriers in a hub was so important to keep things moving. The strike was over low pay, but there’s a problem with that. When the airline isn’t a brand at all (read: any regional airline), the branded partner can just replace it with lower wage options. And that’s why Comair with more than 100 jets flying became Comair with a plan for fewer than 30 until the shutdown happened.
Comair’s costs were too high compared to other regional partners and that doomed the airline. As an Oliver Wyman report noted using 2010 numbers, the gap was huge. Comair could fly a CRJ-700 for 11.3 cents per available seat mile (ASM). ASA could do it for 6.8 cents on a similar average stage length.
Comair had already lost all of its 50 seat jet flying and was holding on to 28 airplanes with 70 to 76 seats. Having so few airplanes meant that costs would go even higher. The end was clearly coming. The recent Delta pilot contract sealed the deal. With Delta needing to drop more than 200 of the 50-seaters, the airline has a problem. It has to find a way to convince SkyWest to shed a lot of those 50-seaters despite there being a contract in place for them.
I have to assume that Comair’s 28 bigger jets can be dangled in front of SkyWest as a carrot for playing nice on the 50-seaters. Delta also needs to get Pinnacle to reduce the number of 50-seaters but since that airline is in bankruptcy and receiving financing from Delta directly, it will be easier to fix (or possibly just kill as well). With all this happening, there just wasn’t a place for Comair.
The Future of the Hub
But with the airline so closely tied to Cincinnati, there was a lot of concern that this shutdown also meant further cuts for Cincinnati. Delta was very careful to say that’s not the case. Sort of. The airline said “No reductions in the number of Delta flights are planned at Cincinnati as a result of this decision.” Note those last six words.
It’s very true that the decision to shut down Comair won’t impact Cincinnati. But the new pilot contract which greatly reduces the number of 50-seaters will hurt Cincinnati. I look at a market like Cincinnati to Greenville/Spartanburg. There’s one flight a day on a CRJ right now. The chance of that going to a bigger airplane is not good. And the chance that Delta will want to allocate one of its very few 50-seat jets to that route is also slim.
There will be changes in Cincinnati, but it won’t be because Comair shut down. It will be because the airline is remaking its fleet of sub-110 seat airplanes and will have to make some real changes in its network.
Delta does note that Cincinnati is currently profitable and will “continue to be an important market.” It doesn’t say anything about continuing to be a hub, but of course, it will remain an important market at the very least, but I do wonder what Cincinnati will look like in 2015 when the fleet transition is done.
What does get lost in all of this shuffling is that a lot of good people lost their jobs with Comair’s shutdown. May they all find new work soon.
18 comments on “Delta Kills Comair, But What About Cincinnati?”
CVG is profitable because prices are so high, supposedly the 2nd or 3rd highest fares in the nation. CVG to ORD or DTW (4-5 hour drive for each) runs $500 R/T, and you’d be hard pressed to find many other flights out of CVG for much less than $500 R/T. NYC nonstop runs $700+ typically.
CVG is also rather inconvenient, at ~30 minutes from downtown without traffic, and with very anal security and a relatively lengthy car-to-gate transit time. For people living or working in the wealthier ‘burbs on the north side of town, DAY (at an hour’s drive) is just as short of a drive, and much more convenient to get in and out of, plus it is much cheaper.
CVG is actually so expensive that there is a public charter airline (https://www.ultimateairshuttle.com/) operating 30-seaters out of the municipal GA airport (10 minutes from downtown, serves a lot of the corporate jets) to Chicago Midway, Detroit, Metro NYC, and Charlotte, for $500 (Midway) to $700 (Metro NYC). Morning departures from Cinci and evening returns, with little/no security, mean that business travelers can make day trips out of it and avoid the cost of a hotel.
Tiny correction: While Ultimate Air Shuttle does serve Willow Run Airport near Detroit, it currently only operates flights between YIP and Columbus, Indiana (not Cincy/LUK). Those flights function mainly as a corporate shuttle for Columbus-based engine company Cummins.
“””””The airline said ?No reductions in the number of Delta flights …..”””””
When I read that I laughed as DL was making it seem that nothing would change at CVG period, but it was really talking about their flts not COMAIR.
I read the letter from the COMAIR president to the workers and thought it should have been the DL president sending that letter since DL is the one killing off COMAIR in away.
I know if I worked there, I’d rather hear the news from MY president…the guy who I hoped was fighting and hurting right alongside me…than the head of the company making the decision to kill mine.
I think CVG will stay as is at 120 dailies and 3 banks (9am, 2pm, 7pm). Also P&G would not be happy if DL cut CVG-CDG.
Maybe they should bring in some turboprops (ATR-42?) to help the cost equation on these regional flights.
“This has been expected for some time so the announcement wasn?t exactly breaking news. ”
Give yourself some credit. You were the first source I saw that openly predicted the demise of Comair…of course I don’t read any other sources so I’m also a bit biased.
While it is sad that so many will lose their jobs the rationalization had to come somewhere. To some degree this should be a general trend. Kill or merge away as many regional airlines as possible and leave just a couple standing. The size of the remaining regional airlines will allow them to leverage that size for better work conditions and pay for their employees. At least that would be the theory…
There is a fine balance the majors will want to thread, they don’t want the regionals to get too large for any portion of their network, less they end up having one of them cease operations for whatever reason and cause the major a big headache..
This is just one more step in the inevitable consolidation / rationalization of the regional airline industry. It will be interesting to watch what happens to carriers like Air Wisconsin, Mesa, Pinnacle, Eagle, Trans States, Piedmont and PSA (among others) in the next few years. Even Sky West and Republic won’t be immune to some pain. This is only the beginning.
I also think this is the continuation of a trend toward reduced service to many small and medium sized communities. With the reduction of smaller aircraft (and the apparent aversion to turboprops), small cites and towns will becoming less and less justifiable parts of large profit motivated airline networks. Airlines have realized that more hubs and lines on route map are not the key to profitability; and In fact they’re just the opposite. The airline industry is beginning to grow up and right size itself. This is all pretty normal for mature industries whose growth days are behind them.
It is sad to see such a pioneer pass into oblivion. When I was a teenage airline dork, I worked at my home airport (SDF) during the summer and on weekends in the early/mid 80s. Even though OH was a publicly traded company, the Muellers still owned a majority stake in the operation. It was an old-school family run commuter operation: like Mesa, Henson, Colgan, Horizon, etc. One of the early SDF station managers was an in-law of the Mueller family. I would watch them load up those Bandits in pouring rain to bounce off to CVG,CMH or CLE from the old Lee terminal.
The introduction of the SF340 was like a 787 to them. Saab flights were listed in bold face font on their 2 page timetable…I have several in my dork boxes somewhere. When DL committed to build CVG from a large station to hub status OH exploded into growth mode and made all the right moves. Just a decade and a half ago, OH was ‘The One’ to emulate. Sorry for the requiem…I wish all the folks to committed their adult lives to the operation the best.
In my view, far too many flying (flying public) folks confuse “Regional Carriers” with “Low Cost Carriers,” (LCCs). By function and target audience, they are NOT the same. The regional’s purpose of to feed/distribute pax from the legacy major’s hubs to smaller regional airports. Saving some pax money, perhaps beyond the onconvenience of having to drive to the hub, is not and never was part of their mission. They are not LCCs. As the regionals expanded a bit, they began offering intercity routings that did not necessarily include a pass-through stop at the major’s regional hub. It worked well and extended Part 121 service to a lot of medium and smaller towns that would otherwise have no Part 121 service. It was never inexpensive and it is not inexpensive today. I cannot think of any regional carrier that offers truly ‘low’ fares. Flash forward a bit and we find that the regional’s new owners, the legacy majors, want to eliminate the expensive, small airplanes and use the small end o f their own fleets to serve a few of these markets, thus keeping their pilots happy. So, they shut down the regional carriers, sell-off those small jets and expand their own networks just a bit, to include only the top cream of the regional’s route map. And yes, staffed by the Legacy Major’s own, in-house pilots. Fares to and from the remaining regional’s network were never low and they won’t go down. They will probably increase, in part because most of those cities have no competition. How many bucks would you spend to avoid having to drive 2-3-4 hours to reach the major’s connecting hub. Some won’t pay, but I suspect that most will, so expect some fare increases on those routes. What about the even smaller cities, those who may have had but one flight per day when served by the regional carrier? Sorry folks, but you are SOL. Slightly larger cities have a choice between paying a hefty fare to reach the hub city, or driving. Those at t he bottom end of the traffic scale just lost their only alternative to driving; they will go from one flight to zero flights. The Legacy Majors do pay attention to the bottim line – and they have to in order to continue publishing in black ink. In the end, this is one more service penalty that we pay for the deregulation craze in the late 70s and early 80s. What was true then, remains true today: Anyone wishing to fly between North Amerika’s major cities can do so and usually at minimal cost. Of one’s origin or destination is other than a very large city, be prepared to pay a huge fare – or make other arrangements. My guess is that only a small percent of the traffic to those smaller places will pay the fare and fly on those >19 seat (often single engine) airplanes and thus drive even more folks onto highways that they do not know. I miss the days of reggulated fares! In those days, many folks paid a bit more, but the airlines were almost promised at least a break-even income, evevn at 50% capacity and to make a real profit they had to compete on service. We can thank the late Alfred Kahn for most of today’s mess and may his business soul rot in hell. Nuff said.
I’m somewhat saddened by the demise of Comair, primarily since I had so many fond memories of flying them in the early 90s. Particularly since they offered me an opportunity for one of the finest abuses of load managment I’ve ever found…
Starting as a college student in 1993, I took a trip with friends from LAN to SLC via CVG. Coming back from that trip, I was scheduled on the last CVG->LAN segment for the evening. As were a rather large number of GM execs, and it was obviously an oversold situation. When the inevitable call for volunteers came about, I found myself soon looking at a free round trip ticket, a hotel room (Is the Drawbridge Estates hotel still there?) and meal vouchers (which they’d honor in their brewpub, to boot). The next day, I caught the first flight out at 6:30, and was back in time for class in the morning.
Using that free ticket, I booked another trip (to IAD), and made sure that my return trip again had me on the last CVG->LAN segment of the day. And again got VBDed for the same deal.
Rinse. Lather. Repeat. Always repeat. The free RT ticket was the worst compensation I managed to get out of them, often getting two RTs out of the deal (depending on how I had booked stuff, sometimes the vouchers were only good for Comair, sometimes for any Delta flight). I racked up vouchers faster than I could use them, and only the fact that I moved from LAN in 1995 ended the gravy train. I ended up giving away the last half dozen vouchers in late 1996, at which point I was living in MSP and it was getting quite difficult to make effective use of them, and I could no longer replenish them.
By that time, almost all of the CVG gate staff knew me, as did most of the CVG->LAN flight crews. And the staff at the hotel. Most of the Comair people were wise to my scheme, but played along with it anyways.
Despite my abuse of their poor load management, I still have a lot of great memories of pleasant flights on their surprisingly quiet CRJs….
Kaszeta good story. Now a days airlines just blame you because they over sold a flight and get mad because you had the nerve to show up for the flight you purchased a ticket on and checked in early for…..lol
Hope this helps.
LITTLETON, CO (August 1, 2012) ? Avjobs, Inc. makes services available to all 1700 displaced employees of Comair with the highest level of reemployment assistance. All displaced employees of Comair are eligible to receive free reemployment assistance through Avjobs Cares Reemployment Services.
Avjobs Cares
The Avjobs Cares Discount Program is designed to ease the transition of displaced aviation employees and allow the industry to recapture quality talent. The program provides Comair participants with an extended free service period added to the end of an existing accounts’ regular billing cycle. The extended free period is normally six (6) months of additional service but has been extended for Comair participants to twelve (12) full months. If you have been affected by the Delta Comair announcement, you may be eligible for an additional twelve (12) months free service on your existing account.
http://www.avjobs.com/blog/post/2012/08/27/displaced-comair-employees-find-work.aspx
The Regionals are on their way out. The Majors are squeezing them into oblivion…..Think Monopoly……
Delta is getting to big Their service isnt worthy I can drive and have more fun or take Amtrak and not got through security Think people there are other ways to get around They need me more than I need them
By the way Pinnacle has revolving door for their mechanics…They only want people with 6 months experiance or less That way they can take advantage of them….They dont even have all equipment in place to do maintenance on their aircraft….Memphis FAA has letter on file in heir FSDO office there. Check it out……You wonder why they are in Chapter 11