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Twin Cities hub remains key asset for Delta Air Lines

The concentration of Fortune 500 companies in the Twin Cities is a boon for Delta.

Delta employees earned an extra $91 million in "shared rewards" payments in 2012 for hitting Delta goals that cover baggage handling, flight completions and on-time arrivals.
REUTERS/Jonathan Ernst

On a recent flight to North Dakota, I met a man in his 20s who gives new meaning to the phrase long-distance commuting.

Every three weeks, he leaves his wife and young children in Finland to fly to Minot, N.D., to work in the oil fields for 21 days. Then he flies back to Helsinki to be with his family for three weeks and returns to North Dakota for work on flights he books on Delta Air Lines.

When I asked him what he thought of Delta, he smiled and said he enjoyed the food on his Amsterdam-to-Minneapolis flight. Then he added that he likes flying on Delta because “the planes are always on time.”

Delta executives and front-line employees have been obsessed with producing stellar operational numbers. They know they can attract repeat customers if they get people to their destinations on schedule.

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On Valentine’s Day, Delta’s Twin Cities employees will be recognized for leading the company in operational excellence. Bill Lentsch, a Delta senior vice president, told Minnesota senators last week that the Twin Cities was named “hub of the year” for reaching numerous Delta operational goals.

Across the airline, Delta employees earned an extra $91 million in “shared rewards” payments in 2012 for hitting Delta goals that cover baggage handling, flight completions and on-time arrivals.

Largest profit-sharing in Delta’s history

Delta CEO Richard Anderson will be at Minneapolis-St. Paul International Airport on Valentine’s Day to celebrate the “hub of the year” award with Minnesota employees. His visit also coincides with the distribution of $372 million in profit-sharing payments to Delta employees for their work in 2012. The Atlanta-based airline has about 74,000 employees. In a Thursday report to employees, Anderson said that this will be “the largest profit-sharing payout for our employees in the history of Delta.”

When Delta acquired Eagan-based Northwest Airlines in 2008, Northwest brought a history of strong operational performance to the merger.

Under an agreement with the Metropolitan Airports Commission, Delta must maintain a certain level of flying at the Twin Cities airport.

However, the concentration of Fortune 500 companies in the Twin Cities is a boon for Delta, which is a major reason why the Twin Cities is Delta’s second-largest hub. Based on the number of seats on Delta departing flights, Atlanta is the biggest hub and Detroit comes in third.

A few hours before Gov. Mark Dayton delivered his State of the State address last week, the Minnesota Senate Commerce Committee learned how Minnesota businesses are using Delta to connect to top export markets. Almost half, 49.1 percent, of Delta international corporate account trips from Minnesota are going to Europe. Slightly more than 28 percent are going to the Asia Pacific region. Africa and the Middle East are attracting about 9 percent of the Minnesota business travelers.

While federal regulators had the authority to approve Delta’s acquisition of Eagan-based Northwest Airlines, the state lawmakers were naturally curious about Delta’s presence and commitment to Minnesota four years after the merger.

Northwest’s headquarters is gone. The operations control center and pilot flight simulators have been consolidated into Delta’s headquarters in Atlanta. MLT Vacations employees were relocated to Georgia. And other Minnesota-based jobs have been lost as a result of the merger.

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9,700 Delta employees in Minnesota

Yet, Delta’s Lentsch reported that the airline still employs 9,700 Minnesotans, and that employment figure rises to 12,000 when Delta’s regional airline operations are included. He told the senators that the employment will grow by 200 to 300 people when Pinnacle Airlines, a regional carrier, moves its headquarters from Memphis to the Twin Cities later this year.

The number 142 was a key figure shared with legislators. Delta flies to 142 nonstop destinations from the Minneapolis-St. Paul International Airport.

Corporate and Delta interests converge over nonstop service. It helps business people who want to travel efficiently and it allows Delta to reap revenue from business people who fly frequently.

Leisure travelers have been irritated by the relatively high fares they pay when flying out of the Twin Cities, where Delta operates the majority of flights. Lentsch got a mild expression of that concern at the Senate hearing when Sen. Paul Gazelka, R-Nisswa, exclaimed, “Boy these prices are high.”

It gave Lentsch the opportunity to explain dynamic fare pricing and Delta’s decision to buy an oil refinery to gain more control over its fuel costs. While Delta operates most flights out of the Twin Cities, it faces low-fare competition from Southwest, Sun Country and Spirit airlines.

The Delta-Northwest merger was approved by the Bush administration on the eve of the 2008 presidential election. At the recent Minnesota Senate hearing, it was apparent that many state legislators see a symbiotic relationship between Delta and the business community.

Delta said it has corporate accounts with “virtually all large businesses based in Minnesota,” and “works with thousands of small to medium sized businesses that together generate hundreds of millions of dollars in annual revenue.”

At peak travel season in July 2012, Delta was operating 477 daily departures out of the Twin Cities. The top six business markets at the Twin Cities airport and Delta’s departing seats per day were:  Atlanta (1,888 seats); New York (1,696); Chicago (1,407); Detroit (1,387); Los Angeles (1,254) and Seattle (1,115).

Delta reported to the Senate committee that it serves 39 destinations within Minnesota’s top 10 export markets of Canada, China, Japan, Mexico, Germany, South Korea, Belgium, United Kingdom, Singapore and the Philippines.

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In a global economy, the presence of a connecting hub in the Twin Cities allows Minnesota businesses of all sizes to travel the globe with speed.

Fedor can be reached at lfedor@minnpost.com.