Delta chief: Merger won't hurt rural service
ST. PAUL - Passenger air service in rural areas of the upper Midwest would not be harmed by a Northwest-Delta airline merger, but high fuel prices could affect service, a Delta executive said.
Delta Air Lines President Ed Bastian, who appeared Monday before Minnesota lawmakers at the Capitol, said a reduction in service to small communities outside airline hubs such as the Minneapolis-St. Paul International Airport would "not be triggered by the merger."
"We think the merger will strengthen the opportunities to provider service to the smaller airports because we're going to be a stronger airline and we're going to be able to support service," Bastian said in an interview.
However, Bastian said rising oil prices could impact routes.
"Service will always be dictated by the economics, and if fuel prices were to continue their unprecedented rise that's going to impact service and that doesn't matter whether you're a small community or a large community," he said.
Bastian said a merged airline stands a better chance at providing those services in light of rising fuel costs. Rural service is important to both customers and the airlines, he added. Those routes help keep airline hubs vibrant.
Testifying before Minnesota House and Senate committees, Bastian said there is nothing state legislators can do to convince Delta to locate its headquarters for the combined airline in the Twin Cities rather than Atlanta.
Northwest Airline's Eagan, Minn., headquarters is home to 1,000 employees; Bastian said the merged headquarters could include workers from both airlines' existing headquarters.
Lawmakers told Bastian that moving the headquarters from Minnesota would violate terms of a deal between the airline and the state. Doing so would force the airline to pay the state more than $240 million.
Bastian said his company intends to enter into discussions with Gov. Tim Pawlenty and state officials on that issue.
The Delta president also said the merger would not result in job losses for "front-line employees," those who provide customer service, including pilots, flight attendants and those at reservation centers.
Airline union official Steve Gordon said Bastian is "saying all the right things" as federal officials review the proposed merger.
"There is going to be job losses. There is going to be service disruptions," said Gordon of the International Association of Machinists and Aerospace Workers.
Some lawmakers also were not convinced by Bastian's prediction of a stronger airline after the merger.
"It feels like when we lost the North Stars," said Rep. Joe Atkins, DFL-Inver Grove Heights, whose House Commerce and Labor Committee heard Bastian's testimony.
Atkins said state officials told him the loss of Northwest's 1,000 headquarters jobs would result in a $400 million impact to the economy.
"It always gets back to one issue - jobs," said Sen. James Metzen, DFL-South St. Paul, when Bastian testified before his Business, Industry and Jobs Committee.
Sen. David Tomassoni, DFL-Chisholm, sought an assurance from Bastian that the merged firm would not close Northwest's reservations center in his hometown.
"It's our intent to retain the reservation center in Chisholm," Bastian said of the center with more than 500 workers.