Delta Air Lines is unique among the US network carriers in operating "focus cities" separate from its connecting hubs across the country.

The SkyTeam Alliance carrier classifies Austin, former hub Cincinnati, Nashville - a new addition - Raleigh/Durham and San Jose (California) as focus cities, said Amy Martin, managing director of domestic network planning at Delta, in a presentation at the Airports Council International-North America's Jumpstart conference in Nashville earlier in June.

"We've chosen these focus cities based on a strong economic environment and, really, areas where we think the Delta product will really make a difference," she said.

But what makes a focus city for the airline? No other US network carrier formally maintains these larger than average spokes though some legacy non-hub or former-hub operations remain, like American Airlines in Boston and United Airlines at its former Cleveland hub.

Delta has three classifications for cities it considers more than a spoke. Atlanta, Detroit, Minneapolis/St Paul and Salt Lake City are its "core hubs" where it focuses on driving connectivity, says Martin.

Boston – upgraded from a focus city just this year – Los Angeles, New York John F Kennedy and LaGuardia, and Seattle Tacoma are "coastal hubs" for Delta, she says. These are top 10 markets in the USA where the airline operates more than 150 peak day flights and offers some level of connectivity.

Delta focus city map 2019

A map of Delta's core hubs (large red widgets), coast hubs (small gray widgets) and focus cities (stars)



"We've really selected markets that have a lot of youthful presence, strong corporate standing, and where we've seen above average growth for the industry," says Martin when asked how Delta selects its focus cities.

The cities the airline has selected generally meet these criteria. San Jose – at the centre of Silicon Valley – is a dynamic technology hub in one of the richest and rapidly growing regions in the USA, while Austin and Raleigh are both growing tech hubs in their own right. Nashville is a dynamic city in the US South with above average growth, and Cincinnati a former Delta hub that retains a strong local corporate base.

Passenger traffic at the five airports grew as much as 15% at Cincinnati in 2018, US Department of Transportation data shows. Austin traffic was up 13%, Nashville up 8%, Raleigh up 9.7% and San Jose up 9.2%.

Delta sees an opportunity to capture share with its product and schedules, for example connecting more travellers to its global network, says Martin.

Southwest Airlines dominates the three focus cities – Austin, Nashville and San Jose – where Delta is not number one. The Dallas-based carrier, though the largest domestic airline by some measures, lacks an international long-haul network and does not partner with foreign carriers.

"Delta wants to be the premier network carrier in all these markets," says Ailevon Pacific managing director Brad DiFiore on the focus city strategy.

Delta focus city chart

Delta's strategy differs by focus city. It serves both its hubs and numerous spokes from Cincinnati and Raleigh with up to 80 peak day flights, while routes from Austin, Nashville and San Jose are limited almost entirely to hubs and other focus cities, Cirium schedules data shows. Flight operations peak at 28 in Austin, 42 in Nashville and 31 in San Jose this summer.

"A lot of the focus is just trying to, for example Raleigh, really understand where the Raleigh business traveller needs to go, the times they need to go, what's their travel preferences and then trying to figure out how we tailor our network to be able to make sure we have good connectivity," says Martin.

Memphis, a former Northwest Airlines hub that Delta closed in 2013, is no longer considered a focus city, she says when asked. However, she adds that the airline is watching the market for growth opportunities.


US network carriers agree that there is a significant revenue opportunity in small- and medium-sized markets across the country. How they tap those markets varies with Delta building focus cities, and American and United adding capacity to their large connecting hubs, for example Dallas/Fort Worth at the former and Denver at the latter.

"The focus city idea is a low risk way to build a deeper operation," says Hunter Keay, an analyst at Wolfe Research. "It's a low fixed cost, high upside low downside gamble."

The investment costs in a focus city are likely "modest", he adds. For example, a focus city requires none of the facility investments of a hub, like in Seattle where Delta's growth prompted the airport to invest in a new nearly $1 billion international arrivals facility.

Delta's rationale for focus cities is simple dollars and cents, as the airline's president Glen Hauenstein described it to FlightGlobal several years ago. He explained it as simple logic to allocate capacity where it can generate the a significant return.

The mainline carrier has consistently generated better financial returns than either American or United in recent years. It generated a pre-tax margin of 11.6% compared to 4.2% at American and 5.3% at United in 2018.

Delta saw domestic passenger revenues increase 8% to $28.2 billion last year, faster than at larger American but slower than at United. However, the latter had more opportunity for growth as its domestic network underperformed compared to its peers in several years.

"At the end of the day, [Delta] can continue doing stuff like this and, as long as they keep putting up the numbers they keep putting up, they're going to keep getting more rope to experiment," says Keay.

Source: Cirium Dashboard