Delta Chief Executive Officer Richard Anderson, right, and Northwest Chief Executive
Officer Douglas Steenland, far left, testify before the House Judiciary Committee.

Airline Mergers, Bankruptcies Hurting Smaller Cities

May 02, 2008 10:37 AM
by Anne Szustek
Regional transport hubs that were home to bygone carriers are faced with losses of air connections, jobs and pride.

30-Second Summary

Honolulu and the Twin Cities each lost a hometown airline as a result of the surge of bankruptcies and merger activity to hit the U.S. airline industry over the past few weeks.

Following its merger with Delta, Northwest’s base will be moved from Eagan, Minn. to Atlanta, sparking fears of job cuts in the Twin Cities region. Northwest has agreed to keep its own headquarters in the St. Paul suburb. Gov. Tim Pawlenty said on Wednesday, however, that Minnesota has “no leverage over them” if Northwest completely jumps ship.

Delta–Northwest’s joint Web site, OneGlobalAirline, tries to assuage Minnesota’s fears, mentioning that the Twin Cities will benefit from “improved single carrier access to Latin America, Europe, the Middle East and Africa.”

Smaller cities in outstate Minnesota remain unconvinced about the benefits. Sen. Jim Oberstar (D-Minn.), whose district is the largely rural northeast of the state, called the merger “the worst move in aviation history … What voice does an air traveler in International Falls (Minn.) or Minot, N.D., have? None.”

Aloha Airlines’ bankruptcy may have a similar effect on outstate Hawaii as the Delta–Northwest merger on the rural Midwest.

In addition to the March 30 shutdown of its passenger service, Aloha’s cargo unit was shuttered on Monday after GMAC pulled funding. Residents of the Neighbor Islands will likely see subsequent cost hikes in staple goods.

“I am concerned for both the employees of Aloha Airlines cargo as well as for the many small businesses that will be impacted,” said Charmaine Tavares, the mayor of Maui.

Headline Links: Airline industry cinches economies of Hawaii, Upper Midwest

Video: ‘NWA CEO talks about merger’

Background: U.S. airline mergers and bankruptcies

Reactions: ‘Delta and Northwest—Creating America’s Premier Global Airline’

Reference: FindingDulcinea’s Web Guide to Budget Travel

Related Topic: ‘Alitalia Agrees to Buyout by Air France-KLM’


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