Airline merger causes concerns

Delta and Northwest executives said Tuesday that Salt Lake City is one of four U.S. cities with a high number of overlapping routes that could be affected by a merger between the two carriers.

"Only 2 percent of Delta's seats are in direct competition with Northwest, and only 3 percent of Northwest seats are in direct competition with Delta," said Northwest's chief executive officer Doug Steenland, during a teleconference Tuesday with investors.

Despite those numbers, the merger would result in 12 cities with domestic overlap of nonstop flights. All but four of the 12 airports — Salt Lake City, Minneapolis-St. Paul, Detroit and Cincinnati — have at least two nonstop competitors.

In Salt Lake City, both Delta and Northwest have nonstop flights to and from Detroit and Minneapolis-St. Paul.

So what will become of flights at the Salt Lake City International Airport?

The new airline would study passenger demand and economic conditions and determine whether flights need to be cut, a person familiar with the merger discussions said. The airline also could adjust with smaller planes, or cut flights but use bigger planes. The new airline would study where passengers are going. If people are in the Salt Lake City airport for a layover between Minneapolis and Los Angeles, for example, the new airline might just add a nonstop flight between the two cities and eliminate the stop in Salt Lake City.

During Monday's announcement, executives at both airlines promised that all of the Delta and Northwest hubs would remain intact and no front-line employees would be laid off if the merger is approved by regulators. The Department of Justice, which can block the deal if it determines competition will be hurt, has up to 60 days to review the plan and object.

The merged airline would be named Delta Air Lines and would be headquartered in Atlanta. Current Delta CEO Richard Anderson would be the new airline's CEO. Ed Bastian, Delta's president and chief financial officer, would have the same position in the new airline. The airline would be the world's largest, Anderson said.

The future of the airline would be in expanding international business. Sixty percent of its traffic would be domestic and 40 percent would be international. "Over time we'd expect to move this mix to 50-50," Bastian said.

By increasing traffic throughout the world, "we build a natural hedge against seasonal demand shifts and regional economic weakness, positioning us for long-term success and increasing financial stability," he said.

The executives said they expect the merger to be ready by the end of the year. The Bush administration is seen as friendly to mergers.