Observers wait to see if Delta-Northwest deal impacts Comair By LISA CORNWELL Associated Press Writer
Published on Tuesday Apr 15, 2008

Comair's status as a Delta Air Lines subsidiary remained uncertain even with the two airlines' emergence from bankruptcy last year. The regional airline and anxious government and business leaders now wait to see what the Delta merger with Northwest Airlines will mean for Comair and the area.


The boards of Delta and Northwest, pressured by record high fuel prices and a slowing economy, agreed Monday to combine the companies in a stock-swap that would create the world's biggest carrier.


Delta said the combined airline will be based in Atlanta, where Delta has its headquarters and a main hub. Another Delta hub is at the Cincinnati/Northern Kentucky International Airport in Hebron, Ky., near Cincinnati, and Comair is based in nearby Erlanger, Ky.


Comair says that the announcement doesn't change the importance of its role in Delta's network.


Comair President John Selvaggio told employees in a memo after the merger announcement that Comair has demonstrated its value as a carrier that could take on challenges. He said the best action was to continue focusing on what it can control.


"Continuing these efforts to improve our performance and keep our costs in line will ensure we are a valuable partner and asset, regardless of what the future may hold," Selvaggio said.


Delta has said that it was evaluating whether to sell any noncore assets, including Comair. President and Chief Financial Officer Ed Bastian said Tuesday at a news conference in Atlanta that the deal will have no effect on Comair.


"We've said all along whether we make a decision to ultimately divest of Comair or retain Comair, either way it's going to be an important part of the Delta network for as far as the eye can see," Bastian said.


The Machinists union, which represents about 14,300 ground workers at Northwest and Comair mechanics, is against the merger because of its effect on workers, passengers and communities the Delta and Northwest serve. Spokesman Joe Tiberi said he does not know how Comair will fare under the deal.


The Comair pilots union's merger committee had been looking at different scenarios, including a merger and even Comair's possible sale or spin off, said Mark Cirksena, chairman of the master executive council of the local chapter.


"We're going to do everything we possibly can to better the interests of our pilots," he said.


If Delta sells or spins off Comair, the regional airline's future could depend on how that happens.


"If Comair was spun off with a long-term contract with Delta, then that's probably not bad," said Richard Golaszewski, executive vice president of the aviation consulting firm GRA Inc. "But if they are spun off to fend on their own and find a new partner in an industry that may be shrinking or merging, then there may be too many people at the dance."
Golaszewski said he thinks the Delta-Northwest deal pushes all regional relationships up in the air.


"Northwest has a number of regional partners as does Delta, and I think they are going to look at the costs of all the regional providers," Golaszewski said.


The region will be closely watching any effects the merger will have on Delta's Cincinnati hub even as Delta has said that it doesn't plan to close any of its or Northwest's hubs.


"The Northwest routes and the Delta routes are relatively independent of one another, and we think we are going to maintain about the same level of jobs and air service that we have now from the hub," said Steve Stevens, president of the Northern Kentucky Chamber of Commerce.
He said he hopes the area might gain from having a larger airline with more international possibilities.


Stevens said that the hub provides about 2,000 jobs, while 4,600 are related to Comair.


Stevens and others say having a major airline hub greatly benefits economic development.


Comair has about 6,300 employees and 669 flights a day to 86 cities in the United States and Canada. It transported 9.6 million customers in 2007.
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Associated Press writer Johnny Clark in Atlanta contributed to this report.


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