Delta president says changes will occur graduallyby Annie Baxter, Minnesota Public Radio
Delta Air Lines president Ed Bastian says the integration of Delta Air Lines and its new subsidiary, Northwest Airlines, will proceed slowly. And customers will come first.
St. Paul, Minn. — Bastian visited the Minneapolis-St. Paul International Airport on Thursday. The Atlanta-based carrier completed its acquisition of Northwest Airlines earlier this week and Bastian said the rest of the changes will be slow in coming.
Bastian set an upbeat tone during his visit, striding into a press conference wearing a tie dotted with polar bears. He said it signaled his embrace of Minnesota winters.
Now that Delta owns Northwest, the usual press grilling over Delta's commitment to the Twin Cities hub and regional flights seemed somehow less anxious. And, when Bastian did address such questions about pledging commitment to the hub here, he did so in good humor. At one point, when a cell phone started ringing, Bastian realized it was his own and made a joke of it.
"It's my son," Bastian said. "He's probably listening in. That's okay. We can call him back."
Bastian said the new Delta will still be the Twin Cities' hometown carrier, just with a different look. Flight attendants and customer service agents will start wearing the Delta uniform in the Spring. Northwest planes will get new leather seats and Bastian said the Twin Cities hub will likely grow and add flights. He said all those changes will come gradually.
"We're going to move at a very cautious pace because the last thing in the world we want to do is screw up our customers' experience," Bastian said.
Airline mergers don't always go smoothly. During Northwest's acquisition of Republic Airlines in the 80s, bags were lost and flights were delayed. The more recent combination of US Airways and America West led to pilot conflicts over seniority and passenger complaints about bad service.
Bastian asserted that Delta executives have done their homework to avoid those pitfalls.
"We have spent six months studying this," Bastian said. "We've allocated $600 million to make sure we do it right. We have the unusual benefit of Richard Anderson who had been CEO of Northwest, currently CEO of Delta, having run both companies, so he understands how both companies operate, so there's not a lot of mystery between that. We're also both members of the same alliance, the Sky Team alliance, so a lot our technology platforms already talk to each other and communicate."
A Delta spokesman said Northwest's WorldPerks and Delta's Sky Miles frequent flyer programs are almost the same, and some small adjustments will be made over time to make them uniform.
The two carriers currently have different policies on baggage fees, Northwest charges for the first checked bag, and Delta does not. Delta president Bastian said a consistent policy is forthcoming on that front, too. He said Delta favors an 'a la carte' approach, where customers do pay extra for perks like meals and checked bags.
So far, travelers at the Twin Cities airport seem focused on what will happen to their travel plans today rather than down the road.
Traveler Carolyn Fox said she received notification from Northwest about the merger a couple days ago and had some initial concern.
"I got an email and I thought 'oh no, I'm flying tomorrow, what's this telling me,'" Fox said. "But I thought, fine, you know, it seemed all right. At least they're not going bankrupt."
Airline analyst Jon Ash said he expects Delta and Northwest to integrate with few hitches. He said there might be some difficulty merging computer systems.
"Nothing insulates you particularly in the IT area, but if you're running your systems parallel and you adequately test them you should be able to minimize the disruption," Ash said.
Ash added that sorting out and making the best use of the different planes in each fleet will be complex, but he said he would expect that to go smoothly, too.
And, Ash said he doubts the merger will spell higher prices in the Twin Cities market for now, given the state of the economy. That confirms the message from Delta's Ed Bastian.
"Going forward I don't know what the future of airline ticket prices are going to be," Bastian said. "It's hard to anticipate them going higher into the face of a weak economy."
Bastian said prices did spike this summer due to higher fuel costs. But, as the price of oil declines, it may be easier for Delta to keep ticket prices down at a time when consumers are much less willing to spend. Delta may have to keep prices down, since low-cost carrier Southwest Airlines is coming to the Twin Cities market.
- Morning Edition, 10/31/2008, 6:20 a.m.