It’s been a little more than 10 years to the month now since an email popped up in the inbox of Northwest Airlines customers on a Monday evening announcing big news — something of a bombshell, in fact, that would cast a long shadow over the Memphis economy for years to come.
Northwest, the note announced, would be merging with Delta Air Lines, a union that promised to serve more U.S. communities and connect to more worldwide destinations than any other global airline. “This is a merger by addition, not subtraction,” the email announcement went on to guarantee, “which means all of our hubs — both Northwest’s and Delta’s — will be retained. In addition, building on both airlines’ proud, decades-long history of serving small communities, we plan to enhance global connections to small towns and cities across the U.S.”
The reality, of course, didn’t align so neatly with that initial promise. Delta soon began slashing flights in Memphis to the point the carrier dehubbed Memphis International Airport altogether in 2014. Memphis had a little more than 8,300 departures a decade ago and lost 75 percent of them — according to planestats.com, more than any other U.S. airport. Delta, to be sure, also pulled way back in other smaller markets like Cincinnati, which has lost almost 60 percent of its departures since 2008.
But in Memphis, of course, the changes especially stung. Far from a merger of addition, the daily flight count at MEM plummeted from 250 to the high teens. Local economic development officials at the time who blamed high fuel prices — officials who represented agencies like the Greater Memphis Chamber and city-county Airport Authority — came off sounding out-of-touch. Harder to accept still was the sense from flyers who were dealing with airfare sticker shock that leadership at all levels was playing a game of cognitive dissonance.
Delta, for example, seemed to be using the consolidation to gouge flyers at the same time then-Delta CEO Richard Anderson was telling analysts on a conference call the day after the Northwest announcement that the deal “is exactly right for all the constituencies.” Local leaders didn’t seem to have much to add beyond meekly pointing to industry trends that were bigger than Memphis.
You don’t have to look far after all this time to still tap into an abiding sense of disaffection — that all is not as it once was. A New York Times reporter visiting the Memphis office of airport authority CEO Scott Brockman for a piece he wrote in May took note of 10 empty jet bridges and not a single airliner in sight. Barely a handful of people on a pair of moving walkways inside and three cars dropping off passengers curbside in front of the terminal.
The future of Memphis International that reporter laid out in his article “The Trouble With the Memphis Airport: No Crowds” is one of MEM trying to pull off a kind of calculated retreat. The airport is spending $214 million on a project that will close and renovate Concourse B and then essentially collapse Concourses A and C into B. Over the next few years, B will get new amenities like high ceilings and glass outer walls while A and C are mothballed — kept up to a minimum standard in case they’re ever needed again, which the airport acknowledges they may not be. It’s a new way of approaching everything for the airport, after years of slow, painful decline. At the end of which comes the eventual realization, like that line in Bob Dylan’s “Things Have Changed” — “You can’t win with a losing hand.”
“We went from having 83 gates on three concourses in 2008 — all 83 gates were leased, 69 of them by the hub carrier, whether it was Northwest or Delta when the hub was operating completely,” Brockman tells Inside Memphis Business. “We now have 17 gates leased. So that’s a big gap between 83 and 17. Which is why people say it’s like a ‘ghost town’ now. Because we have one million square feet of concourse space that’s being occupied at about a 20 percent utilization rate. Less than 20 percent, actually.
“It became quite apparent we needed to downsize some. We needed to modernize. Because our existing facilities were not really built or suited for the size airplanes we currently have operating.”
Thus, the B Concourse modernization effort, which is expected to be finished in 2021 at an estimated cost of $214 million in federal, state, and local funds. That modernization, it should be noted, also comes as Memphis International has shifted from an airport that once had a heavy flow of connecting passengers to one that, according to Brockman, is “99 percent-plus” origin and destination passengers, i.e. passengers who start and finish their travel in Memphis as opposed to passing through MEM on the way to someplace else.
Brockman says another change that’s unfolded in the years since the de-hubbing is that MEM used to be dominated by planes with less than 50 seats. Today, with fewer flights, the airport is seeing planes that seat an average of 110.
Perceptions, meanwhile, remain hard to shake. That NYT article, for example, included photographs in which people were conspicuously absent. The “ghost town” label that’s often heard particularly grates on Brockman, but it’s echoed by local frequent flyers like Hamida Mandani — she and her husband own City Market in Memphis — who believes that prices and the selection of routes at MEM still aren’t where they need to be.
“Businesses that want to invest in Memphis do look for things like these — convenience and affordability in travel,” she says. “It’s getting very tough these days to find flights at decent rates. I often have to travel for business, and a lot of times we choose to drive hundreds of miles to save. Especially if it’s two or three of us.”
You can see that “tough to find” problem she refers to in some of the hard numbers at MEM, like the fact that the airport sees about 75 flights a day today, compared to more than 300 during the height of its Delta hub days. Which prompts the question: A decade on from the Delta drama, can Memphis’ airport — which is estimated to have a multibillion-dollar economic impact on the region — recover some of its mojo?
It’s certainly trying. There are examples of that aplenty over the past year or two, such as the addition of new routes — among the most recent being Southwest’s early July announcement that its single daily nonstop flight between Memphis and Dallas will now be three such flights. New routes bring more destinations for travelers to get away to, and now that lower-cost carriers like Southwest, Frontier, and Allegiant are in the mix at MEM, there are alternatives to the pricey fares that reigned supreme around the start of the decade.
That was back when unhappy flyers in Memphis coalesced around a Facebook group called “Delta Does Memphis.” The page built a community of thousands around what included horror stories of Delta fares from Memphis that were in many cases multiples of what it cost to buy a Delta fare from a different airport to those same cities.
To get a sense of how things got to this point, and where we go next, one place you can turn to is some of those carriers themselves.
Memphis began to look like an attractive market for Allegiant in the years following the post-Delta reshuffling, when local officials were scrambling behind the scenes to bring new carriers into the market. Particularly low-cost carriers who could do something about prices that were keeping flyers away.
Allegiant spokeswoman Michelle Whaley lays out the case for why the carrier wanted to enter Memphis this way: “When we’re looking to start service at an airport, we look at several factors — what is the current market landscape, what traffic is already going in and out of the airport, what airlines are serving what routes, and then what could be potential route opportunities in markets that are lacking ultra-low-cost service.”
After that’s done, the talks with airport officials begin. “Memphis is a unique market for us,” she continues, “because we see high traffic leaving Memphis to go on vacation, but we also see high traffic going into Memphis for vacationing … We’ve served the Memphis community for three years now — started in May 2015 — and we’ve seen more than 500,000 passengers.” Allegiant has nine nonstop routes out of Memphis.
Southwest flights, meanwhile, first took off at MEM in November 2013, inaugurating something of a new chapter at the airport.
Southwest spokesman Dan Landson says the carrier actually had Memphis on its radar a few years prior to that. It started with four daily flights from Memphis to three destinations and has since upped that to 11 departures a day to seven destinations including Denver, which will start in October.
“We’re in constant communication with airports about the potential of bringing Southwest’s service to their respective cities or adding to our existing service,” Landson says. “We’re always evaluating things like overall economic conditions, travel patterns of local travelers, and whether we could operate profitability, and those data points help us with our tactful decisions about markets, routes, and frequencies.”
Southwest, he continues, has been pleased with the response from Memphians and the carrier’s performance in the city, offering a “flight schedule [here] that allows us to get travelers to virtually every part of our network.”
Of course, the fact remains these aren’t replacements, not by a long shot, for what Memphis enjoyed during its hub status heyday. The airport is building back its collection of direct flights from Memphis to destinations around the country piecemeal, one win at a time. That there are still major gaps — with no offerings to the northwestern United States, for example, to cities like Seattle at the time of this writing — speaks to the size of the task at hand. And about Seattle specifically — by way of illustrating how the lack of direct flights puts a city at a competitive business disadvantage — well, having an airport with daily direct flights to Seattle was understood to be a criterion in Amazon’s search process for its second U.S. headquarters.
You can regard recent route additions at MEM as either a glass half-full or a glass half-empty. Take Allegiant’s May 30th announcement of the launch of new nonstop service between MEM and Oakland International Airport. It’s a win, sure, for travelers here who’d love to have another direct to the West Coast. It doesn’t help travelers, though, who might want to get away for the weekend. The flight is currently not only seasonal, ending in mid-August, but it runs twice a week, only on Wednesday and Saturday.
Other recent flight announcements out of MEM include Frontier expanding its nonstop offerings from Memphis with a direct flight to San Antonio International Airport starting August 13th that will run on Monday and Friday. Air Canada also earlier in May announced a second daily nonstop flight between Memphis and Toronto Pearson International Airport.
“We have to make the economic case that Memphis — the airlines putting their aircraft here, whether it’s an additional flight or whether it’s starting service entirely — that it’s going to be a good profit move for them,” Brockman says. “They’re profited-oriented businesses.”
Airport officials help package the economic data they believe will help make the case for Memphis winning a new route. It’s an analysis that includes an estimate of the number of passengers who will likely fly to that location on a daily basis — that key metric being referred to among industry officials as the PDEW: Passengers Daily Each Way.
“One of the things that has helped us up to this point is — coming out of the transfer hub era, our airfares were pretty darn high,” Brockman continues. “Which meant that especially with low-cost carriers and ultra-low-cost carriers, they could come in and stimulate the market tremendously, which Southwest, Frontier, and Allegiant have done. We have people using this airport today that had never used this airport before.
“We’re growing that origin and destination base from within our community. We’re pursuing as many flights, [as much] competition and destinations as we can, but we also want to make it affordable. I want Memphis International to be the airport of choice for the Mid-South. We’ve still got more headway to make, but I’m extremely proud of the accomplishments we’ve made.”
