Delta-Northwest airlines' merger raises questions in rural Minnesota

ST. PAUL – Questions are mounting today as details of a mega-airline merger emerge.

Minnesota will remain important in the new Delta Air Lines, but just how the merger will affect the state remains in doubt.

Chief Executive Officer Doug Steenland of Northwest Airlines today said when his airline and Delta merge, small communities will receive better service.

The service “will be enhanced with providing them with more service to more communities worldwide,” Steenland said this morning at a New York City news conference.

However, he offered no specifics and raised more questions than he answered when talking about Northwest-owned regional airlines such as Mesaba that serves many Upper Midwest cities.

“We will be optimizing the number of carriers we have and where they operate,” Steenland said without explaining how that could affect regional airport service.

The U.S. House’s top transportation lawmaker also has lots of questions.

Rep. Jim Oberstar, D-Minn., today repeated his opposition to a merger.

“I’m concerned about the effect this merger could have on the aviation industry; it will trigger a cascade of mergers," Oberstar said. "You will wind up with three mega, global air carriers. And then what voice does an air traveler in International Falls or Minot, N.D., have? None.”

Oberstar planned to discuss the merger more this afternoon during a Washington news conference. Steenland was returning to Minnesota for his own meeting with reporters.

In a Minnesota Public Radio interview, Steenland said a northeastern Minnesota reservation center will stay open.

“We have a fantastic reservations center up in Chisholm, which obviously will stay,” he said, but did not say if it will remain the size it is today.

State officials worry whether the state will see any of more than $400 million in help Minnesota has provided Northwest. They also worry about how the merger will affect the already sluggish economy.

Economic Development Commissioner Dan McElroy said this morning that Gov. Tim Pawlenty will oppose the merger if it is not in the best interests of consumers and Northwest employees in Minnesota.

McElroy told lawmakers it is too early to know whether legislative action will be necessary as a result of the airlines’ merger.

“The possibility of a special session (later this year) has not, to my knowledge, been discussed,” McElroy said.

Minnesota State Economist Tom Stinson said he doesn’t know if the economy will change in any way as a result of the merger.

“The big question is, what are the side agreements?” Stinson said. “We had Norwest bank corporation buy out Wells Fargo, take Wells Fargo’s name. The headquarters moved to San Francisco, but employment held up really well here. So you could have that model, or you could have a model where all the high paid executives move to Atlanta, and all that’s left in Minnesota is a hub and some maintenance activity. And until it works through for awhile we aren’t going to know if it’s really harmful to Minnesota or whether it’s just business as usual.”

Stinson said he is not necessarily worried about the impact of the merger

“The hub itself is a very profitable enterprise and so all the activity associated with the hub, that’s not likely to change very much,” said Stinson. “I’m interested to see how the business unfolds, with the reservation centers, and see how all that works out. And that is something we’ll be considering when we do our next economic forecast in November.”

Upper Midwestern states depend upon Northwest, especially, for air travel.

Northwest has 12,500 employees in Minnesota, its headquarters state, and up to 522 flights a day. Delta has 125 workers and 17 flights.

Northwest and Delta officials promise the Minneapolis-St. Paul International Airport will continue to serve as a major hub.

Besides the Twin Cities, Northwest serves International Falls, Thief River Falls, Hibbing, Bemidji, Duluth, Brainerd, St. Cloud and Rochester.

In North Dakota, Northwest serves Fargo, Grand Forks, Jamestown, Bismarck, Devils Lake and Minot with up to 28 flights a day. The airline has 30 North Dakota workers.

Northwest and Delta both serve Sioux Falls and Rapid City, S.D., while Northwest also provides flights to and from Pierre, Aberdeen and Watertown. Northwest has up to 21 and Delta 4 flights a day in South Dakota.

In western Wisconsin, Northwest serves Eau Claire and LaCrosse.