http://minnesota.publicradio.org/display/web/2008/01/14/nwa_corp/by Annie Baxter, Minnesota Public Radio
January 15, 2008
Merger discussions between Eagan-based Northwest Airlines and Atlanta-based Delta Air Lines appear to be on a fast-track. If the two carriers merge, the combination could crimp parts of Minnesota's economy. That is, if a merger leads to the loss of the Twin Cities hub or Northwest's corporate headquarters -- or both.
St. Paul, Minn. — Delta Air Lines is reportedly seeking to work out a merger agreement with either Northwest or United Airlines in two weeks.
Citing unnamed sources, the Wall Street Journal reports Delta officials plan to make their recommendation for the best merger partner to the carrier's board of directors early in February.
Northwest will not comment on developments, though the company's CEO has told employees the airline could benefit from a merger.
In the past, Northwest has been favored as Delta's most likely merger partner. And that has prompted experts to mull how the Twin Cities hub and Northwest's corporate headquarters could fare in a possible consolidation.
A number of airline analysts, including Ernie Arvai believe the Minneapolis-St. Paul International Airport would likely stay intact as a hub. If there are service reductions, Arvai thinks it would be a small percentage.
"Some people have said as much as 15 percent, I would say more in the 5 percent range, given the fact that Delta doesn't really have a great presence in the upper Midwest to Northwest's part of the country. Their nearest hub is Salt Lake City, their other nearest hub was Cincinnati, which they greatly deemphasized, and I think as an East-West connecting hub, Minneapolis is more convenient than Salt Lake City," Arvai says.
That's also the view of Bill Blazar of the Minnesota Chamber of Commerce, the state's largest business group. And it's a view he finds comforting. Blazar says losing the Twin Cities hub would make the area a much less convenient place from which to do business. And, he says, most business owners he speaks to value the hub enough that they don't mind paying Northwest a premium for non-stop flights.
"Some of them use stronger terms to describe how much they're paying to fly nonstop. And I say to them, well maybe the hub isn't important, and they say, 'Well, it's worth every dime,'" he says.
FULL story at link.
I'm headed out the door soon, and will be back later today.