A sigh of relief over Delta

Utah leaders happy to hear US Airways dropped bid; other suitors may try later

Published: Thursday, Feb. 1, 2007 10:24 a.m. MST
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Relief. Cautious relief.

That was the reaction of many Utahns Wednesday upon learning that US Airways Group Inc. had dropped its $9.8 billion hostile takeover bid for Delta Air Lines Inc.

"It's a fantastic thing for Delta — for the employees, for the customers and ultimately for the shareholders," said Mike Dunn, Utah spokesman for the Air Line Pilots Association. "I think I speak for most employees at Delta, including the pilots, when I say that each of us was dreading any association with US Airways, for a number of reasons: Nobody believed that Salt Lake City would survive as a hub after the US Air takeover. And nobody believed that hundreds, if not thousands, of employees wouldn't be furloughed as (US Airways president) Doug Parker tried to put this thing together. ... I think fundamentally, Doug Parker wanted to avoid competition with Delta by somehow assimilating us, and I'm glad it didn't work."

Having a Delta hub in Utah is a help to businesses and a big selling point to recruiters hoping to draw companies to the state, said James Wood, director of the Bureau of Economic and Business Research at the University of Utah. Though exact dollar figures aren't known, Wood said the hub's economic impact is "enormous," and the effect would have been enormous had the hub been lost — which was a concern, despite assurances from US Airways that it would keep Delta's hub in Salt Lake City.

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"It's really important," Wood said. "Companies seeking to locate here, or those that already are here, some of them base that decision on the quality air service here — particularly for a metropolitan area our size. And (Delta is) a major employer.

"The transportation system is really critical for economic development. It has played an enormous role here in the last 20 years. It's a tremendous advantage, and if it were to go away, it would cause some serious grief to the economy."

Delta's official committee of unsecured creditors announced Wednesday it had looked at both carriers' proposals and had chosen to work with Delta management to help the airline emerge from bankruptcy as a stand-alone carrier.

The possibility that it wouldn't — or that Salt Lake City would lose its hub — sent cities all over the valley into a tizzy. At least eight city councils passed resolutions opposing US Airways' hostile bid for Delta.

The Salt Lake City Council in December adopted a joint resolution with Mayor Rocky Anderson expressing a preference that Delta emerge from bankruptcy as a stand-alone carrier. The resolution also urged federal officials to "carefully scrutinize US Airways' unsolicited merger with Delta Air Lines to guard against the potential for anti-competitive behavior, to ensure a level of competition among airlines that will benefit the traveling public and to ensure that the high level of air service to Utah and the Intermountain West is continued."

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Mike Terry, Deseret Morning News

A Delta Air Lines jet comes in for a landing Wednesday at Salt Lake City International Airport, a hub for Delta.

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