MSP draws interest from other air carriers

With Delta Air Lines' acquisition of Northwest Airlines pending, other carriers are showing newfound interest in the Twin Cities market.

Alaska Airlines was the first to act, announcing twice-daily service between the Twin Cities and Seattle to begin on Oct. 26.

Bill Wren, who focuses on luring new carriers to Minneapolis-St. Paul International Airport, said Wednesday that several airline executives have initiated contact with him since Delta launched its attempt to acquire Eagan-based Northwest.

"For the first time, it might be a market they [other airlines] might feel comfortable entering," said Wren, who works for the Metropolitan Airports Commission (MAC).

Northwest has been dominant for decades in the Twin Cities, where it has a market share of about 80 percent. Northwest leases 101 of the 127 gates at the Twin Cities airport, which are used for flights operated by Northwest and its three regional partners -- Mesaba, Pinnacle and Compass.

Atlanta-based Delta now leases three gates at the main Lindbergh terminal.

Wren said there are ample gates available at the Lindbergh and Humphrey terminals for new airlines.

MAC Chairman Jack Lanners said six of Northwest's gates are on short-term leases, and could be allocated to a new competitor that wants multiple gates clustered together.

The Department of Justice is reviewing the Delta-Northwest merger proposal, and both airlines' executives have expressed confidence that they'll win merger approval before the end of the year.

Federal regulators would be trying "to at least maintain the same level of competition as it existed prior to the merger," said Tom Sheran, an antitrust attorney with Moss & Barnett in Minneapolis. Specifically, regulators would look closely at what kind of competition would exist after the merger where the two carriers now have overlapping routes.

Service overlap 'is minimal'

In congressional testimony this year, Northwest CEO Doug Steenland said the number of routes where Delta and Northwest have overlapping service "is minimal and raises no competitive concerns."

Steenland said that they both provide nonstop service on only 12 of the more than 800 domestic routes that they collectively fly. Four of those routes originate in the Twin Cities. Northwest and Delta now offer nonstop flights for Minnesotans traveling to Atlanta, Cincinnati, New York and Salt Lake City.

It's unclear how many seats and flights will be available on those routes after the merger.

"We will continue to base our scheduling decisions now and in the future on the cost of fuel, customer demand and route profitability," said Tammy Lee, Northwest's vice president of corporate communications.

Southwest Airlines is frequently mentioned as a candidate for Twin Cities service. Lanners and Jeff Hamiel, the MAC's executive director, flew to Texas this spring to make an in-person pitch to the low-fare airline, but there is no indication that Southwest will launch service in Minnesota in the coming months.

In some mergers, regulators require a carrier to vacate gates. In those cases, there usually is significant service overlap. But Delta and Northwest have complementary route systems -- with Northwest strong in the North and with Delta having a huge presence in the South.

Herb Kelleher, a founder and longtime chairman of Southwest, said in a recent interview that he's "not convinced" that there would be extra gates opening up in the Twin Cities as a result of the merger. Kelleher, a lawyer, declined to define how Southwest views the Twin Cities market. He said the carrier doesn't "discuss our strategy with respect to future service."

Delta and Northwest declined Wednesday to directly comment on whether the combined carrier would vacate any of its 104 MSP gates.

Northwest's Lee said, "Access to gates at MSP is a nonissue. Every airline that has ever wanted to fly to MSP has been able to gain access to the gates that it needs."

With a large number of Fortune 500 companies based in Minnesota, Wren said he has been spending a good share of his time recruiting foreign-based carriers.

While he's optimistic about multiple prospects, one international carrier has decided to suspend daily nonstop service here for six months.

Icelandair, which flies to Reykjavik from the Humphrey terminal, will halt service from Oct. 30 until May 1 because of high oil prices. Typically, Icelandair only suspends flights for about two midwinter months.

Alaska Airlines, when it starts MSP-Seattle service this fall, will operate 157-seat Boeing 737s on its flights. They will depart the Twin Cities at 1:35 and 6:35 p.m. Northwest and Sun Country also offer nonstop service to Seattle.

Wren envisions more service launches. "We will see others."

Liz Fedor • 612-673-7709