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Airline merger viewed skeptically

ST. PAUL -- A mega-airline could be a mega-problem or a mega-opportunity for the Upper Midwest.

It all depends upon who analyzes a planned merger that would create the world's largest airline.

"Fewer flights, more expensive flights, more expensive airplanes and more stops in between." That is the summary of a planned Northwest Airlines-Delta Air Lines merger by Alfie Marcus,professor of strategic management and organization at the University of Minnesota. "I think it is not good."

On the other hand, Chief Executive Officer Doug Steenland of Northwest said Midwest travelers will benefit.

"We both have had historic commitments to serve small communities," Steenland said. "We believe that's a valuable and beneficial activity, and we expect the merged entity to continue to do that."

The debate likely will continue for months, as the federal Justice Department and Congress conduct separate investigations into the merger.

The Minneapolis-St. Paul airport will remain a major hub, but the airline headquarters will move from Eagan to Atlanta under the Delta-Northwest deal. Minnesota officials are worried that Northwest will leave its suburban Twin Cities headquarters owing hundreds of millions of dollars the state paid to keep the operation.

Marcus and most Upper Midwest political leaders were skeptical -- or worse -- of the merger.

Small airports will be especially hurt, Marcus said. "Those flights are the least profitable for an airline."

U.S. Rep. Jim Oberstar, a Chisholm Democrat and chairman of the House transportation committee, said small airports away from hub operations "would be the most disadvantaged."

However, Steenland said when his airline and Delta merge, small communities -- any that do not have hub status -- will receive better service than today.

The service "will be enhanced with providing them with more service to more communities worldwide," Steenland said during a New York City news conference.

Two Upper Midwest reservations centers should not be affected.

In a Minnesota Public Radio interview, Steenland said Northwest's northeastern Minnesota reservation center will remain open.

Oberstar's office reported he has received a commitment to keep the Chisholm operation as is. It employs 517 people.

Steenland offered no specifics and raised more questions when talking about Northwestowned 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.

Marcus said "optimizing" is a code word for reductions.

Oberstar said future airline mergers will hurt the Midwest.

"You will wind up with three mega, global air carriers," Oberstar said. "And then what voice does an air traveler in International Falls or Minot, N.D., have? None."

Added Oberstar: "It is probably the worst development in aviation history."

Marcus said congressmen like Oberstar "can yell at them," but airline officials will discontinue whatever routes they want.

Gov. Tim Pawlenty said he would look over merger details, and then decide how to deal with the $440 million Minnesota provided Northwest.

State Capitol reporters Scott Wente and Marisa Helms contributed to this story. Davis, Wente and Helms work for Forum Communications Co., which owns the Daily Globe.

Don Davis
Don Davis has been the Forum Communications Minnesota Capitol Bureau chief since 2001, covering state government and politics for two dozen newspapers in the state. Don also blogs at Capital Chatter on Areavoices.