November 7, 2012 Columbia MO, and airline competition: Delta’s “blunt” exit from the market.
Columbia Missouri is about half-way between St. Louis and Kansas City. Mostly a college town home to the University of Missouri main campus, the airport authority has been looking to expand air service. Previously Delta had been providing service under an Essential Air Service grant from the government, but since 2008 operating without one.
In the past couple of months, local government has extended incentive packages to American for service into Chicago and Frontier for service to Orlando. The main premise of these grants is to see airlines establish service and if the service is profitable the airlines will continue without the government subsidy. In yesterday’s Columbia daily tribune it came out that Delta is ending service to Columbia. Delta cites continued losses and American’s subsidy
This is in all probability untrue. Delta acting like the jilted lover, turned down the exact same package that was offered to American just this past week. This tells me that Delta was probably asking a premium for flights from Columbia over Kansas City or St. Louis (both about 2hrs driving time). This is bolstered the fact that Delta had been operating flights since 2008 without a subsidy. Delta is clearly afraid of competition from American and Frontier. Delta claims they lost 900,000 a year providing service, but that is probably Delta massaging the numbers to get a justification that suits their position. Really Delta just didn’t want to lose their monopoly on service and now that is gone, they are out. (or if from the 80’s Audi 9000)
Tags: Delta Air Lines.