Delta Air Lines wooed supporters from Capitol Hill to City Hall Tuesday as it launched a battle in the court of public opinion against a hostile takeover with rallies held at the Cincinnati/Northern Kentucky International Airport and in eight other locations. The events were aimed at generating grassroots support for Delta as it fights to stave off a hostile takeover by US Airways. They took place the same day that Delta filed a reorganization plan in bankruptcy court that the Atlanta-based airline says is better for creditors than the deal US Airways is proposing.
While a decision in bankruptcy court could be months away, Delta gathered key allies at Tuesday's rally at Cincinnati/Northern Kentucky. "I am opposed, categorically opposed, to a hostile takeover of Delta Air Lines," U.S. Rep. Geoff Davis told a room filled with uniformed Delta employees, airport workers and political, civic and business leaders who had come to take part in the employee-led campaign, dubbed "Keep Delta My Delta."
"If this merger were to come to pass - it comes down to satisfying a group of institutional shareholders who invest in Wall Street or the families and the employees of this company who have worked so hard, I side with the families because the economics are there," said the Hebron Republican. The economics he and several other speakers spoke of are those that have made the airport the No. 1 driver of Greater Cincinnati and Northern Kentucky's economy with an annual impact estimated at $5 billion. With Delta and its Comair subsidiary providing 80 percent of the flights, the futures of Delta and Cincinnati/Northern Kentucky, the airline's second largest hub, are interlocked.
Davis said he fears if US Airways succeeds in forcing the merger with Delta, it would abandon Cincinnati/Northern Kentucky as a hub in favor of one it already has in Philadelphia. And because US Airways has committed to its own regional carriers not to downsize, cutbacks of regional jets called for in its plan would likely come out of Comair, he said.
"And that can mean only one thing: the effective end of Comair. And I oppose that because that's our homegrown airline here in Northern Kentucky, which is also profitable and having a huge impact on the region," Davis said. Cincinnati Mayor Mark Mallory also expressed concern that a U.S. Airways takeover of Delta would mean the end of Cincinnati/Northern Kentucky as a hub.
"A hostile takeover by US Airways upon Delta would not be good for the city of Cincinnati, would not be good for the state of Ohio, would not be good for the state of Kentucky and would not be good for the United States of America," Mallory said. "Ladies and gentlemen, we must do everything within our power to oppose this hostile takeover." Ellen Van der Horst, president of the Cincinnati USA Regional Chamber, and Steve Stevens, president of the Northern Kentucky Chamber of Commerce, spoke of the impact a merger with US Airways would have on the 10,000 businesses the two organizations represent. Van der Horst forecast a "significant reduction" in flights from the airport if US Airways succeeds in its takeover and that would have a negative impact on the ability to attract and retain businesses and jobs to the region, she said.
Stevens talked about the major impact that spending by employees of Delta and Comair has on the local economy. If the bankruptcy court decides in favor of US Airways' takeover, the cutbacks that would follow would curtail that spending.
"This is not a good decision for Delta and threatens this hub. It cannot be a good decision for Northern Kentucky or Greater Cincinnati," Stevens said. Dan Lincoln, president of the Greater Cincinnati Convention and Visitor's Bureau, and Tom Caradonio, president of the Northern Kentucky Visitor's Bureau, warned that loss of a hub would harm the region's tourism and hospitality industry and the 70,000 people it employs. Morgan Durrant, spokesman for US Airways, said in a phone interview after the rally that the Tempe, Ariz.-based airline was aware of rallies at Cincinnati/Northern Kentucky and elsewhere. "We understand that some Delta employees probably have mixed feelings about our proposal based on what they may be hearing from management and hearing from the community," Durrant said. "But we are confident as employees of Delta understand the stability that this merger would create that they'll come to support it."
He said the airline remains committed to operating Cincinnati/Northern Kentucky as a hub although there could be some service changes. He anticipates lower fares just as has happened in a number of other markets the airline serves. As for Comair, he said it was too early in the process to say what the Erlanger-based regional carrier's status would be if the US Airways-Delta merger takes place.
"We're still on course," Durrant said. "We want to get in front of the creditors committee and conduct due diligence. That's where our focus is." The creditors committee, made up of representatives of companies the airlines owe, will make a recommendation on the merger proposal to U.S. Bankruptcy Judge Adlai Hardin, who has the final decision. Joseph Kolshak, executive vice president and chief of operations for Delta, stressed that consumers will come up short if the US Airways takeover succeeds. "Here's what's at stake for consumers and communities across the country. Stated simply: Fewer travel choices, limited service and higher fares," Kolshak said.
He said that since US Airways merged with America West last year, in every market where U.S. Airways has lowered fares, it has raised fares in four others. US Airways' fares have increased nearly twice as much as those of other legacy carriers, he said. After the presentations and a chance for people to sign an oversized petition in opposition to the takeover, Kolshak said gathering public support is important to the airline and its employees, which had similar rallies Tuesday in Atlanta; Augusta, Ga.; Boston; Charleston, W.Va.; Columbia, S.C.; Harrisburg, Pa.; Salt Lake City and Tallahassee. "I think we have to be very clear and make sure everyone realizes that this is not a good deal. It isn't a good deal for Ohio, Kentucky. It's not a good deal for Cincinnati. It's not a good deal for Delta (and) Delta people. And when you look at it globally, it's not a good deal for the traveling public," he said. He said Delta is making a case for its reorganization plan with the creditors committee in bankruptcy court, but garnering public support is also important. Stevens said the reason that residents of Greater Cincinnati and Northern Kentucky should rally behind Delta is simple: the airport hub operation and the some 10,000 jobs it supports. He acknowledged that local passengers have a longstanding grievance with Delta over the fares it charges at Cincinnati/Northern Kentucky, which are among the highest in the nation. "It is obviously a situation that is something we would like to see improve, but as unhappy as we are with airfares that are higher than our competitors, we would be more unhappy if these jobs left us," Stevens said.
