Delta Airlines has decided to shrink its Memphis services by 25%. But travelers from the Mid-South wouldn’t mind that because most of these flights are used as connecting flights. Most of these flights don’t carry citizens of Memphis or passengers inbound.
Delta has blamed the rising fuel prices for the decision, the carrier’s fuel expenses increased by about 35% compared to last year. This is the second time Delta is cutting services this year.
Delta is planning to cut its 200 departures to about 150 and 170 by the year end. The carrier has reinsured that there will be no changes for flights to New York, Los Angeles, Atlanta, Washington, D.C., Chicago, and Boston. Delta would also increase the seasonal direct flights to five Mid-West cities Appleton, Wis.; Cedar Rapids, Iowa; Lincoln, Neb.; Evansville, Ind.; and Madison, Wis.
Delta’s withdrawal could mean more room for Southwest to consider launching service to the city. As Delta is the largest consumer for the Memphis based Pinnacle Airline Corp, there won’t be much job cuts within Delta. Pinnacle is assured that it won’t be seeing any aircraft retirements or withdrawals. Pinnacle handles the ground operations for Delta and as such the company believes it has to reduce its ground staff. Until next year when Delta releases its new schedule, Pinnacle cannot determine how much workforce is to be cut.
Delta’s move could mostly affect ASA and ComAir. Delta also would cut its global services during the second half of the year contrary to what the airline proposed during the beginning of the year. The plans are to suspend flights to Tokyo, reduce the flights in the US and the Atlantic. The pulling off services to and from Tokyo means a decline in the profit by $250 million to $400 million. Overall flying in the second half of the year will drop by 4% and flights to the Pacific region will grow just 5% down from a scheduled 13% increase.
Delta posted a profit of $593 million last year, its highest since 2007. Market analysts believe that this year that could be tripled to $1.58 billion.
Delta said that increasing fares won’t alone help to tackle the rising fuel prices, airlines needs to reduce services and ground fuel thirsty aircrafts from the fleet. Delta along with American, United and Continental had raised the ticket prices eight times this year so far.
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