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CVG 2005 Restructuring Overview

CVG 2005 Restructuring Overview. Largest one-time restructuring of CVG hub set in motion to return hub to profitability and “right-size” to local market Announced Sept. 6, 2005; Effective Dec. 1, 2005 Reduced 26% of capacity or 157 daily flights Reduced seats per departure by 27%

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CVG 2005 Restructuring Overview

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  1. CVG 2005 Restructuring Overview • Largest one-time restructuring of CVG hub set in motion to return hub to profitability and “right-size” to local market • Announced Sept. 6, 2005; Effective Dec. 1, 2005 • Reduced 26% of capacity or 157 daily flights • Reduced seats per departure by 27% • Reduced frequencies per market from an average of 4.6 to 3.7 • Goal to boost local traffic as percentage of seats filled from 36% to 48% in 2006 • Reduced 1,000 Delta and Comair CVG jobs via various bankruptcy employment programs

  2. Overview of CVG Restructuring 2005 • Why is Delta restructuring its CVG hub? Why are these actions being taken at this time? • This right-sizing comes after a comprehensive review, begun at the start of 2005, of Cincinnati’s role in the Delta network. • With the high price of fuel, weak pricing environment, interest payments on our debt and other factors we are stepping up our transformation plan. • The CVG hub is currently oversized relative to local traffic, and we are making scheduling changes to better match our service to local passenger demand and to optimize the balance of local and connecting traffic across our network. • Delta’s CVG hub has one of the highest percentages of connecting traffic: more than 65 percent. At most network airlines’ hubs the percentage of connecting traffic is closer to 50 percent. • While these changes will reduce mainline and Delta Connection carrier capacity by 26 percent – with a goal of boosting local traffic from 36 to nearly 50 percent – well in line with other Delta and competitor hubs.

  3. % Dependence on Connecting Traffic (2005) Source: Delta research, 2005

  4. O&D Comparisions (U.S. DOT Data – All Airlines) Source: US Department of Transportation

  5. Top U.S. O&Ds (3Q09) Source: US Department of Transportation

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