Airline merger effects examined

The Twin Cities’ status as a major hub for Northwest Airlines is not expected to change if the carrier merges with Delta Airlines.

That was the position of Metropolitan Airports Commission (MAC) Chairman Jack Lanners and MAC General Counsel Tom Anderson at a Feb. 25 meeting of the House Local Government and Metropolitan Affairs Committee.

“The talk of the day is of a potential merger. That’s of great concern to all,” Lanners said.

Lanners said the MAC has “arrows in the quiver” at its disposal for negotiations with Northwest Airlines, including state loans that must be repaid and lease agreements that ensure hub status.

Anderson said there would be a “significant penalty” for the merged airline if those agreements are not abided by in the future.

Lanners said that Minneapolis-St. Paul International Airport has many factors in its favor that leave it well-positioned to maintain hub status, including being well-run, and profitable, as well as the western-most hub for Northwest Airlines.

The outlook on Northwest Airlines’ corporate headquarters remaining in Eagan after a merger is not so optimistic.

Rep. Mark Buesgens (R-Jordan) said it seems as though losing the corporate headquarters in a merger is a foregone conclusion, and the MAC is more concerned with making sure there is not a loss of hub status.

“It’s also seemingly obvious, based on the media reports that we all see, that the headquarters is not looking like it would be here,” Lanners said.

Citing state aid received by Northwest Airlines during its 2005 bankruptcy, Rep. Loren Solberg (DFL-Grand Rapids) took issue with the idea that there is a choice to be made by Northwest Airlines in keeping its headquarters in the Twin Cities or maintaining Minneapolis-St. Paul’s hub status.

“When Northwest was in deep doo-doo and came to the state and MAC, it was with complete understanding that their headquarters would never be moved and, quite frankly, when they talk about headquarters and hub, and want us to choose (between) those two, that’s not a choice,” Solberg said. “Northwest wouldn’t exist for Delta to have a merger if it wouldn’t have been for the state stepping up to the plate.”