Delta made something of a splash last week at the Raymond James Institutional Investors Conference when it announced it was going to dump three focus cities. It also laid out a map of how the recovery is going to go in its remaining hubs and focus cities. It’s hard to say this was much of a surprise, but it did bring up an important question for me. What does it mean for Delta to call something a focus city?
Below you’ll find a map that shows what the airline’s plans are for each of the current domestic hubs and focus cities in its network.
There are really four tiers going on here, but let’s start with the hubs, which have three.
Hubs Return in Phases, But The Schedules Don’t Match
The first is the green check-mark brigade. Those are the hubs in the middle of the country that have maintained the most service during the pandemic. We clearly saw this early on as Delta slashed coastal hubs in favor of those in the middle in order to boost up connectivity, not to mention cater to the locations where people were actually traveling.
Next up are the orangeish/yellowish check marks. New York and LA have finally begun to awaken from their slumber. As I’ve chronicled recently, LA has seen big growth this summer with new routes and higher frequencies. It’s like Delta woke up from a nap, shook off the cobwebs (sorry, Columbus), and decided it was time to move forward in LA. New York seems a bit further behind, but it is starting, and it will continue.
The red check marks are both hubs and focus cities that will come back but haven’t yet. In the conference, Delta said Seattle and Boston rebuilding will resume in mid to late-2021. That sounds right for Boston, but I have to say it seems rather off for Seattle, not to mention some other ones above. I went into Cirium data to look at how schedules are shaping up in 2021 vs 2020 for each of the first four months. This looks at departing seats by hub. I didn’t exclude middle seats, because it doesn’t really matter for comparison purposes.
Delta 2021 Departing Seats by Hub vs. 2019, Jan – Apr
If you’re going to say that the green hubs are coming back quickest, then it seems like both Seattle and LA should be in that category. Just last weekend, Delta filed Seattle changes that dramatically increased the number of weekend flights. It’s also rather odd to see New York so far down there when Seattle is at the other end.
But I don’t want to spend too much time on the hubs, because we know all the hubs will come back eventually. It’s the focus cities that are more interesting.
Delta’s Focus City Plans Aren’t Clear
Delta apparently had five focus cities before the pandemic: Austin, Cincinnati, Nashville, Raleigh/Durham, and San Jose. Delta now says that it will keep Austin and Raleigh/Durham around since they are fast growing strategic markets, but the other three are out. (In case you were wondering, Memphis lost its focus city status long ago.)
I hadn’t even realized that San Jose was considered a focus city until I saw this, and that left me wondering exactly what makes a focus city for Delta. My initial belief was that it was a matter of the airline flying to strategic markets from that location without involving hubs.
Delta Non-Hub Destinations by Focus City, 2018-2020
I took a pretty broad look here and counted all the non-hub destinations that Delta served from each city during the three year period of 2018-2020. I only excluded the cities that had special event flights, like Las Vegas during CES with a handful of operations clustered around the event.
What we see here is that yes, Cincinnati certainly fit that bill. Of course, Cincinnati had well over 100 destinations when it was a true hub pre-merger with Northwest. So it has been a steady decline. In April, it is down to 8, and more cuts are likely. But Delta will keep a somewhat larger than normal presence in Cincinnati. It just won’t be important enough to get the “focus city” moniker.
Raleigh/Durham has also been blessed with several flights to non-hubs, but that’s when this starts to fall off. Nashville only had four destinations, and by 2019 it was down to three: Cancun, Orlando, and Raleigh/Durham. Austin had two: Cincinnati and Raleigh/Durham. Meanwhile San Jose had only one, just Las Vegas. Meanwhile, Cancun, Orlando, and others had far more service than these, yet they weren’t focus cities. That clearly wasn’t the determining factor.
I started to think that maybe it was a function of the local passenger. After all, Las Vegas, Orlando, Cancun… those have a lot of destinations because of Delta’s ability to bring people TO the destination, not from it. Was a focus city something that required a big chunk of originating travelers? I took a look at DOT data showing Delta’s share of originating passengers.
Delta Percent of Originating Travelers by Focus City
Apparently not. Sure, in Cincinnati, Delta still carries a commanding percentage of total local traffic, but that will change as it continues to cut routes. Meanwhile, outside of RDU, the other routes saw Delta with very low percentages of local originating traffic. It can’t be that.
Ultimately, I did the easy thing… I went and asked Delta. And what was I told? There isn’t actually a definition of what makes a focus city. It’s really just a loose grouping of markets where Delta sees growth potential in a variety of ways.
Cincinnati + Delta does not equal growth potential, but I guess that place fell under an old definition, a tweener of a city that was big enough to get some special designation but no longer big enough to be a hub. Since Delta left the hub, Allegiant, Frontier, and Southwest have moved in, now making up a third of all capacity there, and Delta keeps pulling back further.
At the other end of the spectrum is probably San Jose. Delta’s presence there was always miniscule. It doesn’t even have a SkyClub. But Delta had climbed from having about 6 percent of seats a decade ago up to nearly 12 percent. Southwest has continued to fly half the capacity in the market. Alaska has grown significantly to be just shy of 20 percent. Delta must have thought it could make a dent in the market, but I’m guessing what it found is that the loyalty to United and Alaska when you count SFO along with Southwest meant there wasn’t much room for Delta to make inroads in what is an important market. Maybe it tried more of a sales-forward focus. Or maybe it just focused marketing and promotions. Either way, it’s now done.
Nashville is a more interesting one. That’s a hot market, to say the least. Ever since American abandoned its hub there decades ago, Southwest has been in control with about half the capacity in the market. In recent years, American has dropped significantly while the ultra low cost competitors have crept in. But Southwest has stayed steady. There is growth potential in Nashville, and many airlines are trying to cash in, but Delta must have decided that it just couldn’t win that battle, so it is abandoning… whatever it was going to do there.
And that brings us to the two that are sticking around. In RDU, Delta had the largest capacity share in 2019 with about 30 percent. Southwest was around 20 percent, as was American. Frontier has grown rapidly and now controls near 10 percent. But for Delta, I have to assume that it figured it would be easier to fight off American here than in Nashville when it comes to legacy airline supremacy. It already had a position of strength before the pandemic, so it might as keep it up.
The same can’t be said for Austin, however, so that’s more curious. Southwest is the big dog in Austin with about a third of capacity, and then American, Delta, and United each sit around 12 to 14 percent. Frontier, Spirit, and Allegiant make up another 10 percent. This is a fragmented market in that sense, but those Texas-based airlines have deep routes. Still, Delta must be betting on all those people moving into Austin from elsewhere; hoping that they’ll keep some loyalty and fly the fancier airline. It’ll be much harder to pry away the true locals from their existing preferences. But hey, it’s a tech haven that’s growing fast, and Delta wants to be there. Besides it’s the only one of the big four without a significant Texas hub.
In the end, I can’t find a clear dividing line suggesting why Delta is picking one over another, but at least we now know that it’s a pretty subjective moniker. If you are a focus city, don’t put too much stock in it. If you’re not, well, I wouldn’t cry too much.