Delta to scrap Memphis hub, cut flights and 230 workers

Tue Jun 4, 2013 6:47pm EDT

* Memphis hub unprofitable, carrier says

* Customer service, cargo employees affected by cuts

June 4 (Reuters) - Delta Air Lines Inc said on Tuesday that it plans to scrap its Memphis, Tennessee, hub in September, cutting 230 jobs and scaling back flights to make the location profitable.

Delta plans to drop to about 60 flights a day in September from almost 300 daily flights when Memphis was a hub for Northwest Airlines, which was bought by Delta in 2008.

The carrier said in a memo to staff that rising fuel costs and the heavy use of 50-seat regional planes that have become more costly to operate have made Memphis an unprofitable hub. The job cuts, involving airport customer service and Delta Cargo workers, are effective Sept. 3, the memo said.

Larry Cox, president and chief executive of the Memphis-Shelby County Airport Authority, said the Memphis airport was looking to attract other airlines. Southwest Airlines Co said last month it plans new flights to Memphis in November.

Given the proximity of Memphis to Atlanta, Delta's headquarters city and its biggest hub, the move was not unexpected, Cox said.

"The silver lining is that we'll probably get more airline service from other carriers like Southwest that were reluctant to get in here," Cox added.

Delta spokesman Anthony Black said Memphis would remain one of Delta's top 10 departure stations but would no longer be a hub. Workers affected by the cuts will have the opportunity to take positions in other locations, he said.

Shares of Delta rose 1.6 percent to $18.09 on Tuesday.

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