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Possible NWA-Delta merger sends worry across region

ST. PAUL -- Upper Midwesterners know Northwest Airlines dominates air travel, but it is not just the air carrier's flights that have an affect on the region.

ST. PAUL -- Upper Midwesterners know Northwest Airlines dominates air travel, but it is not just the air carrier's flights that have an affect on the region.

Northwest's footprint also includes thousands of jobs, and the company is considered a strategic asset for the region's economic health and stability.

Minnesota, North Dakota, South Dakota and Wisconsin are concerned about keeping those jobs as the airline considers a merger with Delta Air Lines.

The majority of Northwest's 11,500 regional employees work in Minnesota, most based at the Minneapolis-St. Paul International Airport. About 1,000 executives work out of Northwest's headquarters in Eagan, and about 300 workers are based at Northwest's reservation center in Chisholm.

Dan McElroy, Minnesota's commissioner of employment and economic development, said the state is keen on Northwest retaining a strong presence in the region, even if the company merges with Delta.

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"The hub [at Minneapolis-St. Paul International Airport] is incredibly valuable," McElroy said. "It's very important for Minnesota to preserve the hub because it attracts businesses and travelers wanting to fly non-stop to over 100 locations nationally and internationally. Also, we are a service access point to a large number of people in more sparsely populated states."

Northwest Airlines' substantial economic impact on the Upper Midwest region is not lost on U.S. Rep. Jim Oberstar, D-Minn., House Transportation Committee chairman.

"Put it this way, the Minneapolis-St. Paul hub has about a $15 billion economic impact on the metro region and state and you can extend that into Wisconsin and northern Iowa as well," Oberstar said. "So, the economic significance of Northwest to Minnesota, Wisconsin, Iowa, North Dakota and South Dakota environ is very significant. It's important for business travelers particularly, it's important for tourism in the state, and it's important to maintain those airline services in cities at the end of the spokes in the hub and spokes system."

Bob Anderson is a Boise Cascade executive in International Falls and is chairman of the local airport commission. He said about 22,000 people a year -- from the area, as well as from parts of Ontario -- use Northwest's Mesaba Airlink service from the local airport to Minneapolis-St. Paul. Mesaba runs three flights a day and more in the summer.

Anderson said Northwest service in International Falls is important for the local paper industry and for tourism.

But flying between International Falls and the Twin Cities is costly -- about $438 round trip, Anderson said.

Higher fares and lack of competition to Northwest's dominance also is a sore spot for Minnesota's less populous neighbors in North Dakota and South Dakota.

Dan MacIver, North Dakota Chamber of Commerce president, said he is part of an ongoing conversation with Northwest officials about fare pricing and increased service in the state. Despite his concerns, MacIver said he commends Northwest Airlines for having served North Dakota since the airline was created in 1926.

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"I think that's something to pay attention to," MacIver said. Northwest "has been consistent in our state. We've watched a lot of airlines come into our state and leave."

Northwest serves North Dakota's four major and two smaller airports. In 2007, the carrier served 414,000 passengers through those airports. Northwest also employs about 200 people in Minot, through its vacation wholesale company, NWA WorldVacations.

South Dakota also relies on Northwest's strong presence.

Evan Nolte, president of the Sioux Falls Area Chamber of Commerce, said the importance of Northwest to South Dakota's economy cannot be overstated.

"Having a major airport and good airline service is a prerequisite to economic development," Nolte said. "Citibank is here and other financial service companies, we were successful in getting new ethanol headquarters here. Cities don't get that without having a major airport and air service."

While it's unclear what a merger with Delta would mean for the region, there is speculation that there would be few benefits for those living in North Dakota, South Dakota, Wisconsin and Minnesota, particularly in remote areas served by Northwest's Airlink carriers.

Alfred Marcus, a professor in the University of Minnesota's Carlson School of Management, called the proposed merger "a terrible failure of imagination on the part of executives."

"Becoming bigger is not a strategy," Marcus said. "There's no plan for attracting customers, maintaining loyalty or improving the experience of customers and employees."

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However, Marcus said, there is incentive for a merged airline to improve service and fares to so-called "spoke" communities, like those that feed into the Minneapolis-St. Paul hub. He said a drop of even five passengers can make the difference in the profitability of a flight. So, Marcus said, a Northwest-Delta airline would have the burden to show it will maintain or increase service to thinly traveled routes, and that it can create a personal connection with passengers to keep them.

Marisa Helms works for Forum Communications Co., which owns the News Tribune.

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