Dtw9 From United States of America, joined Sep 2003, 1043 posts, RR: 2 Reply 2, posted (4 years 2 months 2 weeks 2 days ago) and read 5933 times:
Probably no worse than the rest of the country with this steller economy we have. Looking at the Detroit area is just a view of what the rest of the country and the world is going to look like if things don't start changing soon
BillReid From Netherlands, joined Jun 2006, 847 posts, RR: 0 Reply 3, posted (4 years 2 months 2 weeks 1 day 23 hours ago) and read 5843 times:
Quoting Dtw9 (Reply 2): Probably no worse than the rest of the country with this steller economy we have. Looking at the Detroit area is just a view of what the rest of the country and the world is going to look like if things don't start changing soon
I would think that Detroit is in the bottom 5%. The economic downturn is deeper in the Auto industry than others.
Some people don't get it. Business is about making MONEY!
PSU.DTW.SCE From United States of America, joined Jan 2002, 6867 posts, RR: 29 Reply 4, posted (4 years 2 months 2 weeks 1 day 23 hours ago) and read 5843 times:
A few things....I could right an essay, but I'll keep things short for now.
1) The domestic auto industry has been in a constant state of decline for several years, it has significantly deteriorated over the past few months.
2) Critical auto-industry related travel will continue - executives, critical personnel needing to go to plants, creditors, etc.
3) There will always be some presence in one shape or form of an auto industry in Detroit
4) Many of the job cuts are for people that generally aren't frequent fliers. Leisure travel (Spirit & the charters have been hit harder than NW)
5) NW will sacrific CVG in order to shore up DTW. DTW is a much more strategic market than CVG, due to the larger metropolitan market, intrastructure, and facilities versus CVG. Hence why are you seeing DL retrench more in CVG and actually adding some markets to DTW
6) The rest of the country's economy is in shambles, its where Michigan and its one-state recession has been for several years.
I'm tired, and just got in from a week in LGA. I'm sure others will chime in as well.
Hjulicher From Liechtenstein, joined Feb 2005, 847 posts, RR: 2 Reply 5, posted (4 years 2 months 2 weeks 1 day 21 hours ago) and read 5736 times:
The downturn in air travel ex DTW has already happened a long time ago, when the auto industry first began having critical problems (about the same time when oil started to spike up) 2005. Michigan and to a higher degree, Detroit, have been in recession since 2001. So this is nothing new to the residents and business here. In some way, Michigan is better prepared to handle this global economic melt down because things were already that way.
Recently, with the hurting automakers, the times seem even worse, but like
quoted, those who need to travel are traveling, and despite the heavy dominance of the auto companies here, there are other non-related industries still operating. There in fact happens to be a lot of services industries located in the metropolitan Detroit area.
I say that air travel to DTW will decrease as less people from other affected areas will be traveling (as if they wanted to come here in the beginning), and the fall in numbers can be visibly seen in 2008. In the beginning, DTW officials said that DTW was ahead of 2007 pax numbers in May 2008, but since the financial crisis beginning in September, those numbers have dropped significantly, actually making DTW see fewer passengers in 2008 than 2007.
I would also venture to say that DTW is more insulated despite the auto industry's dominance because of it's large catchment area, and large population base. Over 5 million.
Since auto sales are plunging so dramatically, I think it best that GM does enter Ch.11 bankruptcy so that it can start reorganizing now while people aren't buying cars, so that when the economy starts to improve, they will be exiting, and people won't have so many fears that their warranty's will be void if they buy a new GM product. And lastly, kill GMC or Buick and keep Saturn.
On the positive side, this global crisis is really putting pressure on GM, Chrysler and Ford to build quality products and to be globally competitive. If they can survive these times, these companies will ultimately be much healthier down the road. You'll see a lot of much improved product coming out of Detroit. Already, the new Ford Taurus, Fusion and soon to be Focus, GM Malibu/Aura, Astra (okay, okay Opel derivatives), Acadia/Traverse/Enclave/Outlook, Cruise.
Of all three, Chrysler will be the weakest, and probably will need to merge or liquidate. I hope though, that Chrysler mergers with a foreign company, not with Ford or GM. The merger would severly weaken the economy here, and be calamitous for the new automaker.
BillReid From Netherlands, joined Jun 2006, 847 posts, RR: 0 Reply 8, posted (4 years 2 months 2 weeks 1 day 12 hours ago) and read 5364 times:
Quoting DTW.SCE" class=quote target=_blank>PSU.DTW.SCE (Reply 4): NW will sacrific CVG in order to shore up DTW. DTW is a much more strategic market than CVG, due to the larger metropolitan market, intrastructure, and facilities versus CVG. Hence why are you seeing DL retrench more in CVG and actually adding some markets to DTW
Interesting comment as NW jumped ship and sold out to DL. Perhaps they saw the writing and said oh sh..t time to sell.
I would argue that although 5 Million people live in the DTW catchment that the southern Ohio area has even more people, alot more! Draw a 100 mile circle around Cincinatti and all of a sudden there are over 9 million people and several other airports as well. Cincinatti is superior in that the catchment is circular with population in all directions. That been said, the decisions by DL/nw will be based upon passengers and yield not the past. Assuming DTW and Michigan and the auto industry will return to where it was would be a mistake. If unemployment is 11% now where will it be if GM goes CH-11 lets say 15-20% and this will result in hundreds of thousands also losing employment in other industries. For example shoe stores do not sell alot of shoes to the unemployed, nor does tv manufacturers, or electronics stores. Perhaps DL would be far wiser sitting back and observing where the chips will ultimately fall. If the Cincinatti economy ever surpasses the Detroit economy then DL will be forced to re-think DTW simply because markets change and inflexability is a sure path to failure to any airline.
Look at UA, living in the past isn't the best way to survive.
Some people don't get it. Business is about making MONEY!
Hjulicher From Liechtenstein, joined Feb 2005, 847 posts, RR: 2 Reply 10, posted (4 years 2 months 2 weeks 1 day 11 hours ago) and read 5303 times:
If GM goes Ch. 11, I don't think that there would me many job losses, actually many of the job losses have already occurred. the problem is with the benefits and pay scales of the employees, and while most people have grown accustomed to a higher standard of life, they would hopefully still be employed. GM needs to go into bankruptcy so that it can reorganize and renegotiate prices and work benefits. I seriously don't see them shedding more jobs. The same at Chrysler. In fact, so many people took buyouts, that those who are remaining find it really difficult to do the work since no one is really left.
Anyways, I have full confidence that once the economic troubles are over, Detroit will regain, and perhaps be a more diversified economy. New jobs will replace those of the old, probably in different industries, but it's highly improbable that Metro Detroit would lose so many inhabitants that it would be smaller than Cincinnatti. BTW, if you draw a 100 mile radius from Detroit, you have over 10.5 Million people living in the area, and I don't know what you mean by saying there isn't population in all directions from Detroit? Surely there is. (I included the CSA for Detroit, Toledo, WIndsor ON, Port Huron, Lansing, Sarnia ON, and London ON and of course Cleveland. And within that area, there are also other airports. I counted a 100 miles radius from CVG and used these cities (Cincinnati, Lexington, Dayton, Columbus, Louisville, Bloomington, and Indianapolis) to get a combined population of 8,778,153. So I don't really see your argument either, since most of these people will not be using CVG, just like people from CLE will not be using DTW.
So to answer your thread... No, DTW is not in dire straights because of the local economy. It is doing still remarkably well given the situation. Additionally, Detroit's MSA still grew over the last 10 years, something that cannot be said for other areas like Cleveland, Toledo, and Pittsburgh. So, despite job losses, and the changing economy. There is still growth here. I don't think that growth will continue through the decade, but I think that if you average the 10 year period, there will be growth not decline.
I guess we shall see, but other than GM and Chrysler, the other companies in Detroit aren't feeling the crisis as acutely as other places, just because this has been an ongoing problem for this area. Like I said, and other posters. Michigan was already prepared and in survival mode when the crisis hit. We are prepared.
CompensateMe From United States of America, joined Jan 2009, 870 posts, RR: 0 Reply 11, posted (4 years 2 months 2 weeks 1 day 11 hours ago) and read 5283 times:
Quoting BillReid (Reply 8): I would argue that although 5 Million people live in the DTW catchment that the southern Ohio area has even more people, alot more!
It doesn't. The estimated catchment for DTW (which includes the Ann Arbor, Detroit & portions of the Toledo Metro Area as well as portions of Southern Ontario) is over 6M people -- nearly 3X larger than that of CVG's. People living closer to CVG, CMH, DAY, SDF, etc. have many options at these airports (including LCC) and generally will not consider over driving these airports to reach CVG. For most people living in the DTW catchment, it is the sole option within a reasonable driving distance, or a more convenient (and lower-cost airfare) option.
Further, DL indicated that traffic levels at CVG were falling just as bad as they are at DTW (hence the introduction of the new fare structure). Additionally, DL has historically maintained about 80% market share of CVG's POS (with a large degree of disagreement over total leakage to neighboring airports... undoubtedly, the new fare structure will test it) but NW has only managed to grab just over 50% at DTW. Alas, there's plenty of room for DL to grow at DTW.
I happened to see your original, unedited post and questioned your agenda at the time (are your originally/have ties to CVG). Capacity adjustments have already been made at DTW -- markets like MCO have decreased by 60% -- and will probably continue to do so with continuing conditions. But even the major credit analysts agree that DL is more likely to de-hub CVG before DTW... but either way, they'd still be on the hook for millions annual in lease payments at DTW & CVG and bankruptcy won't solve that (as DL found out at CVG).
Isitsafenow From United States of America, joined Feb 2004, 4984 posts, RR: 26 Reply 12, posted (4 years 2 months 2 weeks 1 day 10 hours ago) and read 5263 times:
Quoting Hjulicher (Reply 10): If GM goes Ch. 11, I don't think that there would me many job losses, actually many of the job losses have already occurred. the problem is with the benefits and pay scales of the employees, and while most people have grown accustomed to a higher standard of life, they would hopefully still be employed. GM needs to go into bankruptcy so that it can reorganize and renegotiate prices and work benefits. I seriously don't see them shedding more jobs. The same at Chrysler. In fact, so many people took buyouts, that those who are remaining find it really difficult to do the work since no one is really left.
You fogot the domino effect. When the big dog goes down, the little ones behind him follow.
When the GM checks dont flow to suppliers, their checks dont flow to the help or their suppliers.
That's what you economist folks don't get. Its the domino and aftermath after the big guy falls.
Get out here in the trenchs of 'business battle' and you will learn from the school of hard knocks how brutal 'out in the field' has become.
Michigan unemployment should hit 14-15 percent within 90 days. And Jennifer, our little cheeleader gov, is out of ways to surpress the numbers.
If two people agree on EVERYTHING, then one isn't necessary.
AAflyguy From United States of America, joined Apr 2006, 350 posts, RR: 2 Reply 15, posted (4 years 2 months 2 weeks 1 day 9 hours ago) and read 5127 times:
I believe NW/DL has more like a 70% market share in DTW, perhaps 75% with DL's figures added. I know it is far above the 50% stated by CompensateMe. That said, I would expect that business, both O&D as well as connecting, will continue to be impacted @ DTW, and that it has not yet hit bottom. I don't exactly know how diversified the area's economy will become if it has not happened in the last 40-years. What level of success will the State of Michigan have in coming years that hasn't come its way in recent years? There are not many reasons for a business to move into that area, with it's heavily unionized workforce and other detracting factors.
SNCntry32 From United States of America, joined Jan 2007, 1511 posts, RR: 0 Reply 17, posted (4 years 2 months 2 weeks 1 day 9 hours ago) and read 5086 times:
Quoting CompensateMe (Reply 16):
NW's share of DTW POS (point of sale) was roughly 55% in 2008; it's hovered in the low 50s -- and was actually below 50% much of the 1990s. Total market share is higher, however, as you point out.
AAflyguy From United States of America, joined Apr 2006, 350 posts, RR: 2 Reply 20, posted (4 years 2 months 2 weeks 1 day 7 hours ago) and read 4935 times:
OK, that makes sense. I didn't know we were talking specifically O&D passengers. 55% is very believable. Thanks for clarifying. There is quite a bit of capacity offered by other carriers to pull 45% of the local market, and a fair amount of that is in the low-fare category with F9, FL, WN, NK, and U5 all represented to varying degrees. And, of course, the legacy carriers offer a % of their capacity at lower fares to compete.
DocLightning From United States of America, joined Nov 2005, 16811 posts, RR: 57 Reply 21, posted (4 years 2 months 2 weeks 1 day 7 hours ago) and read 4932 times:
I think DTW's strength is that it is by far mostly connecting traffic and not a huge O&D center. I think 70-80% of traffic there is connecting. Besides, S.E. Michigan has been so economically depressed for so long (like decades) that this is just another kick to an already dead horse. If you already have 20 bullet holes in you, what's another one or two?
So I don't think that the issues in S.E. Michigan per se will affect DTW traffic that much. I think the global economic situation is going to hurt DTW, but name an airport that won't be affected.
CompensateMe From United States of America, joined Jan 2009, 870 posts, RR: 0 Reply 22, posted (4 years 2 months 2 weeks 1 day 6 hours ago) and read 4849 times:
Quoting AAflyguy (Reply 20): I didn't know we were talking specifically O&D passengers. 55% is very believable. Thanks for clarifying.
I'm referring to specifically DTW point-of-sale only, and not total O/D traffic. DTW POS has never been a strength of NW, consistently running 15-20 points behind MSP. NW's market share is poor for a such a large hub but they've made progress this decade (the number was below 50 throughout the 1990s) and NK's flights to Florida & Las Vegas help dilute it. Still, the business community in DTW has shown a willingness to fly other airlines, even if it involves a connection. And that's something that DL can build upon.
Quoting DocLightning (Reply 21): I think DTW's strength is that it is by far mostly connecting traffic and not a huge O&D center. I think 70-80% of traffic there is connecting.
DTW still consistently pulls (roughly) 15M O/D passengers annually, making it one of the larger traffic center in the country. Further, DTW pulls a high percentage of business travelers. And NW's connecting traffic flirts around the low-60s, no where near the 70%-80% you estimate; ironically, ATL transits a larger percentage of passengers for DL.
While the automotive industry vastly contributes to DTW's air traffic, the airport isn't completely dependent on it. And even a slimmer auto industry will still make major contributions to the airport's traffic. One has to remember that Detroit & its inner-ring suburbs (which are suffering the most) historically contribute little to DTW's total air traffic. And most of the region's tourist dollars are spent within the state.
One strong advantage for DTW is what's happened in the region to other hubs since the start of this decade: STL has lost 600 flights, PIT about 500, CVG more than 250, CMH nearly 100 and ORD (UA/AA combined) roughly 300. And many of the remaining flights at ORD, CVG and CLE have shifted to smaller jets (including commuter). Ironically, DTW has retained the most capacity! Most other hubs in the nation have saw declines (this decade)... the hubs that experienced the most growth this decade are in the south... but DL's withdrawal at DFW greatly influenced growth at ATL, DFW and IAH (in fact, CO cited a 20% increase in traffic at IAH just months after DL de-hubbed DFW) while CLT boomed by PIT's disbandment.
Ultimately, I have serious doubts as to whether maintaining hubs at both CVG and DTW will be in DL's best interest (re: most profitable). But I think it's clear that DTW will be the surviving operation.
One must not forget that a wild card to the declining economy is the amount of capacity pulled in 2008 due to high fuel prices that would've otherwise remained!
AAflyguy From United States of America, joined Apr 2006, 350 posts, RR: 2 Reply 23, posted (4 years 2 months 2 weeks 1 day 5 hours ago) and read 4779 times:
DTW's market area is not much different in size than ATL's, yet ATL has more than twice the O&D traffic. The latest I've heard is approx. 37% @ ATL is local traffic. That puts the total for '08 somewhere around 33M. So, while more passengers as a % may be connecting in ATL w/DL vs in DTW w/NW, there are vastly more passengers served, both O&D and connecting @ ATL, due to the sheer size of the DL & FL operation there. Why such a disparity between DTW & ATL in O&D? I know there is strong business traffic @ ATL, I would think much more than DTW. And it's not as if the airports surrounding DTW are stealing much traffic, and some of it just flows right over DTW anyway aboard NW/DL branded flights. Just wondering. Any thoughts?
LAXdude1023 From Lebanon, joined Sep 2006, 6779 posts, RR: 25 Reply 24, posted (4 years 2 months 2 weeks 1 day 5 hours ago) and read 4767 times:
Quoting CompensateMe (Reply 22): The hubs that experienced the most growth this decade are in the south... but DL's withdrawal at DFW greatly influenced growth at ATL, DFW and IAH (in fact, CO cited a 20% increase in traffic at IAH just months after DL de-hubbed DFW) while CLT boomed by PIT's disbandment.
That is very true. And if you look at which cities and places which are fareing the best in this economy its the Southern Ones. The Unemployment rates were released yesterday showed Houston at 6.5%, DFW at 7.1%, and Atlanta at 8.7%. As bad as it sounds, those numbers are actually better than average for the major American Cities (at least Houston and DFW's are).
I might also add that these are three of the fasest growing areas in the USA (all in the top five with DFW and Atlanta being #1 and #2).
When DL left their DFW hub, AA filled the in the gap the whole way.
Its easy to see why the airports have grown so much and thrived.
DFW Fan Boy: Im crude, irreverent, and blunt, but Im not clueless. I offer no apologies.
25 DocLightning: I thought I'd heard that somewhere. Thanks for the correction.
26 CompensateMe: Three major reasons: 1) Atlanta is a much larger, more diversified business market. 2) Atlanta's business market is more dependent on air transportat
27 Lexy: I haven't got much to add to this, but let me go on record as saying very good post!! I can atest that the other carriers at DTW do well atleast from
28 LAXdude1023: Yep, because IAH was much smaller to begin with. DFW and IAH have very similar amount of O&D (when Domestic and International are combined) and both
29 NASCARAirforce: Think of what other commercial airports are in DTW's catchment area - FNT, LAN and TOL- the biggest of the three is FNT. Look at what is in CVG's cat
30 BillReid: Jeez, all those areas have airports as well . I suppose you should go tell TOL management that their airport is just a figment of their imagination.
31 BillReid: I have nil ties to CVG except the airport in the town where I live has two flights a day on Comair to CVG and service on NW and FL as well from DTW.
32 BillReid: Sorry, but info I received from inside DL tells me that DTW yields are tanking and Business traffic is very problematic, disturbingly to the point wh
33 LAXdude1023: Yes, ATL is definately a stable hub. However I would argue that MSP is a safe hub too. MSP has posted good numbers and has proven to be high yielding
34 CompensateMe: It's a fact that DAY, CMH, SDF, etc. are developed airports with small numbers of people who overdrive them to reach CVG. Using your "facts," NYC lie
35 Dtw9: Yep, just a Detroit thing http://www.lasvegassun.com/news/2009...r-volume-declines-157-percent-pas/ http://baltimore.bizjournals.com/bal...ore/storie
36 Hjulicher: I asked you earlier, Bill, in a post how you got your numbers. There is no way that 9 million people living in the Ohio River Valley. I included a li
37 BillReid: OK. UA has ORD, DEN, IAD, and lunching points in LAX, SFO and JFK for international. If the airline were forced to reduce capacity by 50% because of
38 CompensateMe: Regardless, people living within the DAY, CMH, SDF, etc. areas have shown a willingness to utilize those airports, even when fares are similar to tho
39 Lexy: With all due respect, the very same could be said for the DTW "fanboy's" on here and elsewhere. Everytime, and I mean EVERYTIME, DTW is brought up on
40 CompensateMe: I haven't been a member here long, and I was previously only an occasional lurker, but I've noticed that every time ANY airport's brought up in a neg
41 Lexy: I agree and most would agree the city as a whole is perceived negatively on here and in the real world. But to be honest, i've been to detroit and it
42 LAXdude1023: It seems its one way an airline can run. Theres two methods as I see it for the legacies: 1) One fortress hub with 2-3 smaller hubs. DL and AA would
43 Vfw614: Actually, premium travel should go up with all the excutives no avoiding corporate jets like the plague - assumed that they do not continue self-driv
44 BillReid: Actually I am a PM that lives in South FLA. I use exclusively ATL as a conx point. I have flown thru CVG one time five years ago. I do not enjoy flyi
45 BillReid: I totaled up the MSA populations within 100 miles of CVG using the last USA population census. I used two websites. One was "How far is it" and the o
46 BillReid: Thank you. I have no agenda I just like putting forth an argument for the guys that are hurting like CVG. Apparently DTW is hurting and some people j
47 BillReid: I am just stating a WORST case scenario, it probably will not go that low, but isn't it prudent to consider what if? I'd bet anything that every airl
48 LAXdude1023: One thing I will say is that I think its extremely unaccurate to include MSP when talking about DTW shortcomings. As I said earlier:
49 Hjulicher: We should specify what you mean here actually. If I were visiting the US for the first time and I arrived into DTW I think that would be a good thing
50 CompensateMe: Not really relevant... SE Michigan still has strong business and 5M people that have wants/needs to travel (or people traveling to see them). But I a
51 CompensateMe: Your original posting, which cited sources relaying to you that DTW is the 'worst performing hub in the Western Hemisphere' sought anything but the t
52 LAXdude1023: DFW (DAL and DFW), IAH (IAH and HOU), and ATL (they only have one airport) all have around 26 million O&D passengers. All three have relatively stron
53 BillReid: I wasn't talking about shortcomings at MSP. Only that MSP could suffer if the economy tanks and DL decides it wishes to go another direction. In Real
54 Hjulicher: I'm not sure if you knew this, but the Detroit-Windsor crossing is the largest border crossing between the two countries, and because of the entrench
55 JM079: The automotive industry in Canda is also watching feverishly to what is happening in DTW.
56 Ocracoke: ....and don't forget all the snowmobiles headed from Southeastern MI up to Charlevoix county every winter weekend.... UA flys B737 and A320 into CVG
57 CompensateMe: If yields have tanked as much as the rumblings you've heard, then DL would've made deep capacity cuts. They haven't. Instead, DTW will see a sharp se
58 NASCARAirforce: Yeah in all due respect you probably think DAL should have a fortress hub at BNA too. With the Mac Terminal barely 7 years old and the North Terminal
59 YVR1968: Does anybody have any stats information for DTW for the month of January? I cannot find anything on their website?
60 Hjulicher: Not really true, this was actually propaganda spewed by the automotive companies... they though that everyone in Detroit should drive, and actually r