Why Delta Air Lines doesn't have a hub in Texas

As a full-service network carrier, Atlanta-based Delta Air Lines operates a traditional hub-and-spoke model, meaning that they operate thousands of daily flights to and from their major hubs, which are located across the country.

If you are looking to fly between two destinations, neither of which is a Delta Air Lines hub, you will likely have to connect somewhere along the way at a Delta hub.

For example, if you are looking to fly from Philadelphia International Airport (PHL) to Miami International Airport (MIA), your most efficient option with Delta will likely be to connect at Atlanta Hartsfield-Jackson International Airport (ATL).

Delta's hub network is fascinating unto itself, and we have discussed it extensively here at my.

The carrier's hub network tends to focus on secondary markets, such as Atlanta, Detroit, Salt Lake City, and Seattle, while also having a presence in New York and Los Angeles, the nation's two largest air travel markets.

Interestingly, the airline has shunned a Chicago hub in favor of basing its operations in the region out of Minneapolis/St. Paul International Airport (MSP) and Detroit Metropolitan Wayne County Airport (DTW).

Two of the most valuable air travel markets in the United States are in Texas, with millions of annual travelers flying to and from Houston and Dallas every year.

These two cities are frequented by business travelers, who bring along with them the high revenues generated by those who fly in premium cabins.

As a result, both United Airlines and American Airlines have recognized the immense potential of the Texas market and have set up shop in the state.

Dallas/Fort Worth International Airport (DFW) is, as many travelers already know, one of the largest and most important hubs for American Airlines, regardless of where you might be traveling.

The airline's corporate headquarters, which are located on a Silicon Valley-style campus, are located in nearby Fort Worth.

United Airlines, while headquartered in Chicago, still has an important presence in the market. George Bush Intercontinental Airport (IAH) in Houston is one of United's most important hubs and serves as the gateway to the airline's Latin American network.

Delta Air Lines, however, has stayed far away from the Texas market, something that may seem surprising given the carrier's status as the US commercial aviation industry's long-time leader in terms of profitability.

The airline actually does not even have a hub located remotely close to Texas, with no hub in the neighboring states of New Mexico, Oklahoma, Arkansas, or Louisiana.

The closest Delta hubs to Texas are Atlanta and Salt Lake City, making the airline a pretty weak option for convenient travel to and from Texas, unless you happen to live at a Delta hub. Let's take a deeper look at the many reasons why Delta Air Lines has chosen not to have a hub in Texas.

The commercial aviation industry is defined by intense competition, and carriers must be extremely careful when launching new services to note which airlines they will be competing with.

Furthermore, hub airports where an airline has a significant market share are some of the most important revenue-generating assets for legacy carriers, something which may require them to fiercely defend against competitors in these key markets.

In Texas, there is intense competition across both key sectors of the passenger market, including business travelers who are more likely to fly in premium cabins and leisure travelers who are likely to fly to and from Texas to visit friends and relatives or go on vacation.

In Houston, United Airlines has a significant hold on the high-end business travel market, operating flights to and from dozens of destinations and providing travelers with the most convenience.

In Dallas, the same is true for American Airlines, and the carrier likely has even more to lose from added competition due to its long-standing presence in the market.

When it comes to leisure travelers, there are low-cost airlines in Texas that have an important presence, with the existence and influence of Southwest Airlines being the most powerful.

The carrier has two important hubs at Dallas Love Field (DAL) and Houston Hobby Airport (HOU), from both of which the carrier extensively serves destinations across the United States and in Mexico and the Caribbean.

At these facilities, Southwest is dominant, with market shares that exceed 96% at the former and 93% at the latter, according to statistics from the Department of Transportation.

As a result, breaking into these markets could be difficult, especially with these airlines' long-standing presence in the Texas market and the existing base of customers being loyalty program members.

Therefore, the largest factor restraining Delta from entering the Texas market is the competitive dynamics, which could make it difficult for the carrier to succeed in the state.

The important thing to know about Delta's reasons for not operating a Texas hub are that the carrier does not necessarily want to compete with these two airlines, not necessarily because it would not be able to if it wanted.

Delta has been able to succeed in markets where it competes directly with one of these two legacy carriers, and it has even succeeded in places where it has had to compete with both of them at once.

The best example of this is at Los Angeles International Airport (LAX), where all three US legacy carriers have a major hub.

While American Airlines does not have another West Coast hub, this hub is one of two in both American and Delta's networks, which have hubs at San Francisco International Airport (SFO) and Seattle/Tacoma International Airport (SEA), respectively.

At LAX, where all three airlines are competing vigorously over the same high-spending segment of business travelers, the three legacy carriers have the following market shares:

As we can see, the carrier has been able to emerge with the largest market share at LAX, despite the competition from both American and United.

It is not unreasonable to expect that Delta could create a profitable market share at a major Texas airport, even if they were facing heavy competition.

The carrier, however, is likely to have no interest in expending the amount of resources that would be required to build this kind of market share.

This would be a costly and time-intensive process, and the airline is better off expanding its presence in different places.

Delta Air Lines has a presence in Texas, but it does not have a hub. The carrier maintains Austin as a focus city, operating some flights from Austin Bergstrom Airport (AUS) that do not go directly to other Delta hubs.

The carrier's regional subsidiary, Delta Connection, serves a handful of different destinations throughout the nation. From Austin, the airline currently serves cities like Orlando and Cincinnati.

The airline has big plans for its Austin focus city in the coming months, something which will be the airline's largest move in the Texas market in recent memory.

On June 8th, the airline will launch nonstop flights from the facility to and from Tampa International Airport (TPA) and San Francisco International Airport (SFO), according to local news outlet KXAN. Delta Connection will also launch four new routes from Austin in the coming months.