Sky-high fuel prices and its proposed merger with Northwest Airlines mean Delta Air Lines won't be coming to Redding this year.
Airports Manager Rod Dinger received an e-mail from Delta late Wednesday informing him Redding won't be on the carrier's summer schedule.
Redding had offered Delta $1.2 million in incentives in exchange for a twice-a-day regional jet service to Salt Lake City.
The City Council in March gave Dinger its blessing to finalize the deal, which included $500,000 in revenue guarantees and $600,000 in prepaid tickets, a voluntary travel bank funded by businesses that would have required a $2,000 minimum purchase.
"Of course, I am disappointed, but I am not totally surprised considering the current economic environment," Dinger said Thursday. "... I am optimistic because I believe Delta has a strong interest; they were very sincere in their e-mail that when things settle, and hopefully fuel prices drop, we have a serious opportunity in 2009 to get Delta service."
Wednesday's news ends -- for now -- a three-year effort by Dinger and city officials to woo Delta. Dinger went to Atlanta, Delta's headquarters, at least twice to make his case.
In late February, Delta told Dinger they were ready to consider Redding, but it wanted subsidies. A package was put together and brought before the City Council on March 4; the council voted 4-1 to move forward.
Almost on cue, economic hardships and uncertainty caused what seemed like daily turbulence in the airline industry.
This week, Delta and Northwest reported a combined $10 billion in first-quarter losses. The two carriers on April 14 announced plans to merge operations. Delta and Northwest see the alignment as a way to better compete with rivals and battle high jet-fuel prices.
Earlier this month, Aloha Airlines, ATA Airlines and Skybus grounded their commercial jet services. The three airlines made the announcements in the span of one week -- all blaming fuel costs, the sagging economy and competition.
In an Air Transport World online magazine article published this week, aviation analyst Mike Boyd said the proposed Delta-Northwest merger could mean bad news for regional carriers.
"Delta and Northwest, regardless of any merger, have about 125 too many 50-seaters that have to go quick. They are losing money on every flight." Boyd said in the ATW article.
Delta proposed to fly twin-engine 50-seat regional jets in and out of Redding.
Humboldt County is the only new market that Delta plans to add in 2008, Dinger said. The airline announced in February it would start in June service to Salt Lake City from Eureka-Arcata. Humboldt County also gave Delta more than $1 million in subsidies in exchange for the service.
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