Indianapolis Airport announced today that Delta will be adding year-round flights to Paris Charles de Gaulle as of May 24, 2018, which will be the airport’s only transatlantic flight. While Cincinnati, Cleveland, Detroit, and St. Louis benefited from WOW Air’s recent midwest expansion, Indianapolis had no such luck.
Continue reading: Delta Will Add Flights From Indianapolis To Paris (With Subsidies)
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It would be interesting to find a list of airports that subsidize flights in order to maintain their "international" status.
every new flight gets subsidies in some shape or form. No reason to single this one out since it'll be exactly the same as every other new route announcement. This will be a revenue guarantee, marketing spend and probably rent and landing fee waivers for 1-2 years.
So the Republican dumb ducks want to subsidize Europe travel but had no trouble taking away grandma's healthcare subsidies. Typical!
Hey Lucky wouldn't you call AMS a Delta hub as much as a KLM hub? I couldn't believe how big DLs presence was at AMS when I flew through there.
I am sure VP Pence (who was Governor of IN before) had a hand in this. I can't imagine the yield from IND-CDG will be particularly great, I imagine most business people just fly into ORD and connect. I assume Delta will route some passengers from other airports into IND and fly them to Europe. Creating a sort of mini hub for that one flight. I can see subsidizing out of the way places with domestic connecting service (what the Essential Air Service program does) because many places are difficult to get to even by car or train. I just checked I can get 6 weeks out late October fares from IND-CDG for under $1000 with one stop.
Sometimes incentives can be a windfall, I live by CLT and the airport was projected to have 60m total passengers in 2017 based on American's expansion plans for the remainder of the year. However since 92% of the passengers are connecting, you wouldn't know it if you drove around the airport perimeter. American gets a good deal by investing in Charlotte, the airport is getting inter-modal now soon and is a huge economic generator. I would be curious to see what Indiana expects out of this. Are there French companies doing business in Indianapolis that I don't know about?
There is a vast difference between a city subsidizing a specific route and a state-backed airline. While you can argue that there should be no subsidies from any government entity to any business, trying to compare this to the relationship between the ME3 to their governments is a false equivalency.
The subsidies that the ME3 receive make the playing field between them and the American Big Three carriers unlevel. The ME3, being backstopped by government, are not held to the same financial constraints of profitability as are Delta, American and United. This naturally impacts their pricing, their product quality at a competitive price point, etc. You have even noted in your blog that the missions of some of these carriers is to promote tourism and stature of their home country. I suspect you understand this but your view is colored by your fondness of these carriers and their premium cabin products. I am sure I would love those products too and while I oppose the unlevel playing field that exists, I would not personally boycott those airlines. However, that would not color my economic perspective on that market.
The subsidies that Delta received from Indy does not negatively impact the competitive landscape with another carrier since no other carrier provides service between Indy and Europe. You could argue that this route would encourage traffic to Indy that is continuing onto Europe to go via Delta, but IMO this would be a a weak argument since Indy is not a Delta hub. Any European bound traffic would not have gone through Indy any way so any incremental traffic on Delta flights to Indy would likely not be at the expense of other carriers. As noted, this does not remove any concerns over ANY subsidies, but you have not taken that stand.
Delta also operates a Cincinnati to Paris flight which I've always found a bit strange, but it still makes more sense than this route since CVG is at least sort of a Delta hub and the route can link the aircraft manufacturing industries in the two cities.
I dont like this comparison of subsidies. I'm sure if Emirates wanted to fly DXB-IND they would have received the same subsidy. This is a far different cry from your national government bankrolling your airline.
I could see this route working well. IND is pretty easy vs flying through JFK/ORD/IAD and will allow one stop access for anyone in Indiana to access all of Europe/Middle East/North Africa.
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Like you said, it's really interesting that they chose CDG for this since CVG (99 miles away) also has a CDG flight. In my mind this would have made more sense to go to AMS.
@Weymar Osborne - A large chunk of CVG-CDG route demand is due to the JV between GE Aviation & Snecma who are based in Cincinnati and Paris respectively.
@Weymar Osborne
I have flown CVG - CDG - CVG two times, and none of the flights was empty!
Apart from GE traffic, Air France carries a large chunk of Midwestern population ahead to India, Middle East, Africa, and Asia. Remember these flights attract people at least from OH, KY, IN - if not other Midwestern states.
I find it really interesting how Delta does have these routes from non-hubs to their JV hubs across the pond. Neither United nor American do this, but at this point you do have quite a bit of these flights, like IND-CDG, PHL-CDG, PIT-CDG, EWR-CDG, PDX-AMS/LHR, and MCO-AMS. Does anyone know why DL operates these instead of AF, VS or KLM? DL also has that seasonal CUN mini-hub, and a few other oddities like MCO-GRU and PDX to NRT.
@alex - my thinking exactly. This is completely different from the bankroll that the nationalized airlines have gotten. And look where those airlines are today, making cuts so they can actually compete. So calling an amount less than $5M (that is the total budget they had to attract TATL traffic) a subsidy and on par with Gulf carrier subsidies is just silly. Enough whining about DL...they're the best run airline in the US and it's because they'll actually fight for things like this.
@Neel -- this was well explained in an airliners.net thread that popped up recently. Apparently, Delta has a different type of joint venture with their SkyTeam partners (AF, KL, VS, etc.) compared to other joint ventures (like the BA, AY, IB, AA JV or the AC, LH, OS, UA JV).
Due to the fact that there are so many connections out of both CDG (Air France's hub) and AMS (KLM's hub) (as well as to a lesser extent LHR due to the Virgin Atlantic hub), this means that there is an incentive to add flights from these hubs to cities that are non-hubs. Although it is most common to see a new route from, say, a KLM hub to a non-hub like IND being operated by KL because it has the largest presence in AMS, that isn't true with Delta's joint ventures. Apparently, flights are so "metal-neutral" with equal code sharing opportunity that it's actually Delta that flies some of these weird non-hub -to- hub flights.
Currently, the smallest aircraft that AF or KL can send overseas is the A330-200, which is a fairly heavy plane. DL's 757s and 767s carry a fraction (between 2/3 and 3/4) of the seats of those aircraft, with a lower operating cost compared to one of those aircrafts. Because the flight itself is metal-neutral, any airline can fly the route and all carriers in the JV will benefit from it. Take this new IND-CDG route. US customers on delta.com will see DL flights from IND-CDG-xxx, and will earn mileage on all flights as if all segments are on Delta (even though connecting flights be operated by a different carrier). French passengers booking on AF's website will see CDG-IND being operated by AF and earning mileage as if it was an AF flight, meaning that AF loses nothing and also gets to "operate" this flight. The same applies across Delta's transatlantic network, meaning that smaller routes (like EWR-CDG/AMS, IND-CDG, MCO-AMS, etc.).
However, some of the routes that you mention are special cases. Take PDX-NRT as an example. DL has the services necessary to offer longhaul from PDX, and has valid connections from NRT operated as 5th freedom flights (like NRT-TPE, or NRT-SIN). Although these are winding down, this was once one of the many ways DL flew PDX passengers across Asia.
EWR-CDG and AMS are a mixed bag. On one hand, it's to allow connections in Europe (AF once tried EWR-CDG with an A332), but on the other, it's due to the size of the New York market. There are plenty of premium seats being sold meaning most flights can be reasonably filled, and with such a large catchment area spread over both JFK and EWR, airlines try to maximise their spread over both airports. This is why UA regrets leaving JFK, and why DL operates this route. Although they have a hub at JFK, it's not the optimal airport for passengers living in NJ and certain parts of the city. Because DL would like to have as much market share as possible, it makes sense that they would operate a route that will increase their presence and has a likelihood to be filled.
Perhaps some of our coastal elite commentators aren't aware that the flyover backwoods backwater of Indianapolis hosts corporate headquarters of Eli Lilly, Cummins, and Simon Property. Salesforce has a large presence there as well as a number of other global tech and industrial/manufacturing companies. It's a prosperous area with some high incomes and a very low cost of living.
The only surprise is that there wasn't already a TATL flight there.
5.5 Million of the taxpayers money for 2 years, for 3 flights a week,
Wish they would pay their own way.
@Neel To piggyback off of J's explanation, Delta already has existing ops in those cities, so for them it's just an additional flight. They don't have to do any negotiations with the airport for signage, landing rights, counter space, or gates. They also don't need to hire new employees or find a subcontractor like Swissport or Delta Global to manage ground handling, so the JV doesn't incur any additional costs to operate.
Grant is right. I'm an employee of one of he companies he mentions. We welcome the CDG flight. I have lost track of how many times I have driven to or from ORD because the regional jet didn't arrive. And some of us remember the ATR 72 crash in 1994.
We also have a DL lounge at IND so even better!
Hmm... I'm planning on being in Indianapolis for the 500 next year and this could be the perfect flight for me (getting to Paris from the UK is trivial).
How are Delta long haul? It's them vs BA vs Virgin (all premium economy).
Everybody hates subsidies until there's one they'll benefit from, then "it's different".
@Another Steve
Is it possible that the governments involved evaluated the numbers and determined that a measly $5M investment in attracting he flight might create an ROI of many multiples there the city and state?
Or is it easier just to regurgitate idiotic leftist tired blather that makes you think you're clever?
For you I suppose the latter.
This could be a great use of Delta global upgrade certificates for diamond elites. I can't imagine business-class will be as full as other routes.
This was a great article, until you had to give that little quip at the end, Lucky. This is hardly an apples-to-apples comparison with the ME3 subsidies. You can do better than this. I expect this kind of low-level blogging from Gary Leff, not you.
Besides as a poster mentioned above with the companies we have here, we also host a LARGE amount of big sporting events. The final 4 for basketball quite often, the Indy 500, we've had the superbowl, the NCAA headquarters are here, and a TON of conferences. It will help attract even more visitors.
@Grant - Are the insults and stereotyping making you feel better about something or are you just upset that everyone doesn't share your enthusiasm for the economic prospects of Indianapolis? Here are my responses to your questions:
Grant: Is it possible that the governments involved evaluated the numbers and determined that a measly $5M investment in attracting he flight might create an ROI of many multiples there the city and state?
Of course it is possible, and their conclusions may be right or they may be wrong. A 2 minute google search though will allow you, me or anyone else to find dozens of examples across the country of government subsidized sports stadiums, commercial developments, and even airline flights that despite extensive preliminary analysis indicating substantial economic ROI for decades to come - did not in fact produce the promised prosperity or economic stimulus. So, while they may have done the analysis, they may be or may not be right. Hopefully they did do it, and hopefully they got the numbers right. But you don't know and neither do I, and neither do the people who did the analysis.
Grant: Or is it easier just to regurgitate idiotic leftist tired blather that makes you think you’re clever?
Not sure how to answer this, never considered myself a leftist, so I don't know what would be considered idiotic leftist blather - is opposition to subsidies leftist? What if the subsidies go support a union or the ACLU and I opposed that, would I be a leftist then? Do you know if I oppose subsidies? Which subsidies do anti-leftists support? - Your questions raise literally dozens of other questions, but mostly those questions involve trying to understand how you've convinced yourself that you know so much of my character and personal belief system from reading a single line comment about how often people and groups evaluate the value of a subsidy based on whether it affects them. If you can explain that without using a personally dismissive insult (especially the boring threadbare ones that everyone thinks are so incisive now like snowflake, nazi, grow up!, cuck) then I'll read the explanation, otherwise I'll just judge you based on your inability to post the previous two comments without stereotyping and assigning identities to people you know nothing about.
Honestly with IL and MN taxes the way they are, I wouldn't imagine IND not becoming an even more popular business city in the years to come. 2 connections to most of Europe may be a deal breaker for multinationals but direct IND to a Schengen country is definitely a plus vs say stopping in LHR and dealing with border control twice
Delta obviously has the confidence that this flight won't cannibalize the CVG-CDG route.
the CVG-CDG route performs pretty well from my understanding. Cargo hold apparently goes out full on this flight. The biz community in Cincinnati won't let Delta cut this flight either. So if DL is adding IND-CDG, then CVG must be performing well enough for them.
On another note, If I am not mistaken, Chiquita actually cited the diminishing options out of CVG as one of the reasons they moved headquarters out of Cincinnati.
*sigh* once again zero mention of the billions US airlines have written off via bankruptcy. Subsidies by another name.
As with comparing the overall backstopping of an airline by the government to a city specific subsidy is a false equivalency, the same can be said of deeming bankruptcy a similar subsidy. As with the other, we could debate the efficacy of the bankruptcy laws as structured, both for corporations and individuals, but to suggest that using a blanket law that covers all corporations versus a government-provided ongoing support to an operating budget are also apples to oranges. I am not familiar with Middle Eastern bankruptcy laws, but I would imagine there are provisions in those countries laws as well. Either way, it's not an ongoing, operational support so it's another false equivalency.
A false "equivalency" is claiming this route subsidy is not a subsidy. Sheesh.
They have announced, in the initial press release that it will operate 3 times a week, year round.
Seriously--if you don't get why this flight is important you are probably not a business person or you don't know Indy. Making a connecting flight is not a big deal for a person who will make a once in lifetime flight to Paris or Europe. Thats not where the real money will be made here
Seriously--if you don't get why this flight is important you are probably not a business person or you don't know Indy. Making a connecting flight is not a big deal for a person who will make a once in lifetime flight to Paris or Europe. Thats not where the real money will be made here. Business people will choose the direct flight 9 times out of 10 if they choose even if the flight is more. Why? Time of course; would you like to add on an extra 3 hours (layover etc) to your work week every week for no extra pay or benefit and be away from your family? Also there is just more to go wrong with a connecting flight, like missing a connection or baggage.
We have not even mentioned the Indy Airport. I fly weekly, and I have never been to a nicer, cleaner airport. It has won "best airport" in the country something like 3 out of 4 years. You can also be downtown in 15 minutes
Seems they're on the Delta site now, but the search is awful. When you use the flexible date search there are days that show with nonstop... but when you click those days, you only get 1 and 2 stop routes.
So far I've only managed to get it to give me two days when they fly the route (at crazy prices).