Academic

Delta And Northwest Merge. What Is The Future Of The Minneapolis Hub?

By Dan Filler

One of the less talked-about aspects of airline mergers and consolidation is their impact on hub cities.  While some airline hubs are located in towns that generate substantial traffic on their own, many are not - and these cities stand to lose a lot when an airline reduces its presence.  Some examples?  Pittsburgh had been a hub since the days when US Airways called itself Allegheny.  As a result, the airport opened the first serious airport mall.  More importantly, the busy airport offered loads of flight choices for the locals.  When US Airways pulled back, the airport suffered serious contraction.  The same happened in St. Louis when American swallowed TWA.    Sometimes we even forget old hubs. When I clerked in Durham, I once rushed a friend to the RDU airport for her non-stop to Paris.  RDU to Paris, non-stop?  Incroyable! 

Now that it appears that Northwest and Delta are merging (with corporate offices in Atlanta), what is the future of a Minneapolis hub?  In the short term, the airline will clearly maintain a strong presence.  It would only be politic.  Over time, however, Delta/Northwest will have to determine whether it needs both an Atlanta and a Minneapolis mega-presence.  And if Minneapolis does lose it's hub status, that might have a significant economic impact on the city and state. One real cost is that it becomes harder for cities to attract and hold onto major corporations.  It is almost a given among those in the Southeast that Atlanta's rise as the center of the South is largely attributable to its airport. 

Will Minneapolis be the next victim of air consolidation?  Are these significant political-geographical effects important enough for the federal government to put brakes on the deal?  I'm betting that Al Franken and Norm Coleman will have something to say about it in this year's Senate race.  It won't be a laughing matter.

Full post as published by The Faculty Lounge on April 14, 2008 (boomark / email).