Delta vacates CVG concourse; 840 jobs in jeopardy - Cincinnati News, FOX19-WXIX TV

Delta vacates CVG concourse; 840 jobs in jeopardy

By Kimberly Holmes – bio | email

HEBRON, KY (FOX19)  - Nearly 1,000 employees at Cincinnati-Northern Kentucky International Airport could lose their jobs. Delta Air Lines is pulling all of its operations out one entire concourse.

Delta Air Lines employees heard the news Tuesday morning after receiving a memo. Company spokesman Kristin Baur said the move will save Delta $20 million dollars.

Tough economic times have forced the carrier to consolidate. Starting May 1st, Delta will move all operations from Concourse A to Concourse B. That means 840 local ground workers from Delta's Regional Elite Airline System could lose their jobs.

Baur said Delta is offering separation packages, including: severance pay, flight and health benefits to all of the affected employees. Baur said Delta is looking to hire back some of the employees. She also said the employees will have preferential hiring rights with other positions at Delta in Airport Customer Service and Reservations departments. Employees will also be able to transfer to other airport locations as well.

CVG Airport CEO John Mok said 120 concession workers could also lose their livelihoods.

In a statement, Mok said, "The impending May schedule pull down may prove to be the right size for Delta, but it is the 'wrong size' for CVG and is inadequate to serve demand in the Tri-State."

And passengers couldn't agree more.

"I used to be able to fly from here to Green Bay directly, but now I have to go through Detroit," said frequent flier Mike Luccasen. "So I'm driving instead because it takes me five hours and 42 minutes to get there."

Passenger Paul Maurer also agreed.

"It just makes it harder for people getting out of town and getting back," Maurer said.

Baur said she's hoping that won't be the case.

"In addition, this change furthers our goal to improve the customer experience by allowing all customers to board their flights via jetways, eliminating stairs and bus transfers to and from our aircraft," said Baur in an email.

Baur also tells FOX19 that Delta will operate 160-170 flights a day from Concourse B.

"This change is not a negative reflection on the Regional Elite Services team in CVG," Delta Senior Vice President Gil West said in a statement. "But yet another step in a series of changes we have made to optimize the network and work to return the CVG hub to profitability."

Local leaders from the Northern Kentucky Chamber of Commerce worried what the move could mean for the local economy and companies looking to move into the region.

"For us, {the airport} has been what has brought people here based on the fact that we had tremendous service," said Northern Kentucky Chamber of Commerce President Steve Stevens. "It will put as at a disadvantage if we aren't able to build back up."

Mok said Delta is still financially responsible for the lease on Concourse A through 2015. Both airport and airline spokespeople said they're working on that agreement, and looking to allow other carriers to now move in.

  

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Statement from John C. Mok, CEO

Cincinnati/Northern Kentucky International Airport

RE:  Delta's "right sizing" is the "wrong size" for the Tri-State  

March 16, 2010

We have worked diligently with Delta over the last year and will continue to support them to achieve the goal of "right-sizing" flight operations and returning the CVG hub to profitability.  The impending May schedule pull down may prove to be the right size for Delta, but it is the "wrong size" for CVG and is inadequate to serve demand in the Tri-State.   

Local passenger activity at CVG grew almost 21% in the 3rd Quarter 2009 compared to the same period in 2008 – moving CVG to the top position for largest increase in local passenger traffic (Department of Transportation).  Triggered by Delta's reduced fares, this explosive growth in local passengers, coupled with load factors ranging to over 96%, confirms that CVG serves a large population base with a high level of demand for air travel.  Indeed, a major and growing concern that we hear today from the traveling public is that they are finding it increasingly difficult to book a seat on a flight.  Air Canada recognized this need and will commence new air service between CVG and Toronto starting in May 2010.  

While working with Delta to retain its hub operations and significant employment base at CVG remains a top priority for the Board, the Airport and its many business partners have been actively discussing air service growth opportunities with our other CVG airlines and prospective new entrants.  The February 17th article, "CVG: Fastest Growing Local Market," generated new service inquiries from four airlines that week alone.  Since then, the number of airlines interested in CVG continues to multiply. 

However, a major barrier to increasing air service at CVG will not be the lack of airline interest or passenger demand, but aircraft availability.  Airlines have reduced capacity worldwide in response to the economic downturn, parking many of their aircraft in the desert.  Making do with their current fleets for the time being, airline capital expenditures are mostly going into upgrading the passenger experience or increasing aircraft efficiency.  For instance, jetBlue has deferred 100 aircraft orders (Centre for Aviation March 12, 2010).  The lack of available aircraft is a significant challenge for airlines looking to increase market presence or commence new service. 

There is a growing awareness by existing and new carriers that the reduction in air service at CVG is suppressing local demand.   Last year's 3rd Quarter 21% increase in local passengers occurred when industry-wide domestic demand registered a -4% decline.  This dramatic difference, coupled with our efficient airfield, best-in-class facilities and diverse economic base will only enhance CVG's ability to attract new air service when the economy rebounds and airlines start adding aircraft to their fleets – returning service choices and jobs to the Region. 

The announcement released today by Delta Air Lines to consolidate its operations in Concourse B and resulting job layoffs is very disheartening to the Airport and the Tri-State community. 

Previous Delta schedule adjustments at CVG essentially removed peak period "banks" of flight activity, for example, downsizing from 7 banks to the current 4 bank structure.  However, peak activity through 2009 remained high enough with the 4 banks to require Delta to use of all of its gates in Concourses A and B. 

The May, 2010 schedule will realign flight activity to provide greater flexibility for local travelers to travel to and from major markets in the same day.  At the same time however, the schedule changes will reduce the number of daily peak aircraft departures from 55 today to 32, a 45% decrease. 

Decreasing the number of aircraft operations during a peak period translates into reduced gate requirements, which is the underlying reason for Delta's announcement today. 

We are currently assessing what affects Delta's consolidation will have on Concourse A concessionaires.  Without any shift of Concourse A concessions to Concourse B, up to 120 concessionaire employees will be impacted.  The Airport will be working with each concessionaire to evaluate opportunities for operations in Concourse B and assisting, where feasible, to minimize job losses.

Delta remains financially obligated for the leases in Concourse A through 2015.

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FULL MEMO SENT FROM DELTA AIR LINES TO EMPLOYEES:

 

To: All Delta CVG-based Employees

From: Gil West, senior vice president – Airport Customer Service

Subject: Cincinnati Changes

We recently announced changes to the Cincinnati (CVG) hub schedules that beginning

May 1 will double the number of connecting banks from the four that exist today. These changes do not affect the total number of departures we plan to operate from Cincinnati, but they will eliminate the large peaks and valleys associated with today's structure and improve flight schedules to our customers' favorite East Coast business markets. After a thorough review of how this schedule will operate, we also have determined we will be able to consolidate all flight operations to a single concourse, moving all Delta and Delta Connection flights to Concourse B. Today, our colleagues at Regional Elite Airline Services are notifying their employees that as a result of this consolidation, CVG station operations can no longer support two separate work groups performing the same function. Delta employees will assume full handling of all Delta and Delta Connection flight activity effective May 1, coinciding with the flight schedule changes and the facility consolidation. This change is not a negative reflection on the Regional Elite Services team in CVG, but yet another step in a series of changes we have made to optimize the network and work to return the CVG hub to profitability. In addition, Delta has made a commitment to do everything possible to avoid involuntary furloughs of mainline frontline employees and we continue to honor that commitment with today's announcement. As a result of assuming all of the handling, Delta will have a need to increase CVG operational staffing effective May 1. We will give preferential consideration to interested Regional Elite Services employees through our normal external hiring process and we will be sharing more information with them beginning today on Delta openings that are already or will become available in Cincinnati. It is important to note that this announcement does not change our previously announced plans to operate between 160 and 170 flights each day from Cincinnati this summer, including reinstated service to a number of cities. Delta continues to partner with the Cincinnati community to take steps to return the hub to profitability by focusing service on markets with the highest level of local demand and by implementing necessary cost-saving initiatives that make doing business at Cincinnati more efficient.

Cincinnati has long been a customer-preferred hub because of its track record for on-time flights and hassle-free connections. We appreciate your continued professionalism and passion for our customers in Cincinnati as we make the necessary changes to adapt and compete in an ever-changing industry.

 

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