With the recent reports that bankrupt carriers Delta and Northwest airlines may be weighing a merger, fears have sprung up in Memphis about losing the Northwest hub to Delta's headquarters in not-so-far-away Atlanta.

Memphians have three main worries about the prospect of losing Northwest's hub, which is the smallest one the airline operates: fewer choices, hampered business growth and less prestige for the city.

Only a handful of airports are dominated by a sole carrier so completely as Northwest dominates Memphis International Airport. Northwest's dominance leads to a minimum of airline competition in Memphis--only six other airlines offer nonstop service to Memphis from 14 cities. Northwest can afford to charge high fares on its Memphis routes.

"Fortress hubs" like Memphis are home to the country's highest fares. According to statistics from the U.S. Department of Transportation, the average one-way fare for flights originating or arriving in Memphis during the second quarter of 2006 was $227. Among comparable markets for location and size, the average one-way fare was $186 in Austin, Texas; $170 in New Orleans and Indianapolis; $169 in Jacksonville, Fla.; $167 in Louisville, Ky.; $165 in Nashville; $163 in Oklahoma City, and $158 in Richmond, Va.

With such high fares, one would think that Memphis is an ideal market for a low-fare carrier like Southwest or JetBlue. Theoretically, they could undercut Northwest's fares and capture a share of the market. But when this has been attempted in other markets, the dominant airline has lowered fares on the same routes that the low-fare carrier operates. Northwest serves approximately 90 cities with nonstop flights from its Memphis hub. If Southwest were to come to Memphis--serving, say, four cities--Northwest could afford to cut fares on those routes until Southwest gets priced out and gives up. Then Northwest could raise its fares again, having successfully driven away a competitor. Hence the term "fortress hub."

If Northwest were to close the hub, however, it would open the door for low-fare carriers to bring competitive fares to Memphis. In 1995, Nashville lost its American Airlines hub. It left much of the airport empty and local leaders bemoaning the city's misfortune. For a few years, there were fewer destinations for passengers flying out of Nashville. But with the expansion of competitive service and the arrival of discounters Southwest, JetBlue and Frontier, fares have dropped 22 percent. Ever since US Airways closed its hub at Pittsburgh, empty gates have been slowly filled by low-fare airlines and other legacy competitors. Today, passengers there pay less than they did when US Airways had the hub there.

Without Northwest's Memphis hub, local residents probably would have fewer choices among nonstop destinations. But if a route really has demand, it wouldn't be long until another airline picked it up. And who knows? Another airline could find untapped potential in Memphis. After American Airlines closed its hub at Raleigh-Durham International Airport, increased competition and lower fares more than doubled the number of passengers who made the airport their destination--a key marker of air market strength.

So the decline of a Northwest hub would not mean higher fares for Memphis, nor would it ultimately mean fewer choices. But what about its effect on local business? Ordinary businesses which depend on air travel in Nashville and similar cities have found that hub status is not a big deal. "We've actually had more success in recruiting (corporate) headquarters in the last two years than probably (we've had in) the history of the city," Janet Miller of the Nashville Chamber of Commerce told Minneapolis' City Pages. "Having a hub is not the deal breaker when it comes to recruiting headquarters. Having diversified carriers and competitive costs has a lot to do with it as well."

The final concern--the potential loss of prestige for the city--is the weakest argument for preserving hub service, but it is also tremendously powerful to local boosters who love Memphis. Sure, it's prestigious for Memphis to have a daily nonstop flight to Amsterdam, but if the price of all those red tails on the tarmac is higher fares and reduced competition, is it worth it?

One final consideration that might be raised regarding a potential hub closure is loss of jobs in the region, as pilots, cabin crews and ground crews are transferred elsewhere. While growing up in Germantown, I lived next door to a Northwest pilot and I went to school with other pilots' children. These job issues are indeed sensitive. From the consumer's perspective, however, hub closure would not be a loss.

On the issues of fares, choice, business and prestige, it's not worth bending over backwards to keep the Northwest hub in Memphis. Local residents would be better served by competition and choice in air travel. Should Northwest thread the needle of a merger with another airline, and should the Memphis hub be closed, I look forward to flying home for less money on a plane full of travelers who are better off.

Evan Sparks is an editorial assistant at AEI.