Delta merger won't solve problems, airline workers tell Congress

WASHINGTON — Flight attendants and mechanics told Congress on Wednesday that the planned merger of Delta Air Lines and Northwest Airlines could hurt consumers, communities and workers.

But the carriers' chief executives insisted they must combine to compete effectively worldwide and deal with soaring fuel prices.

"In order for these two carriers to do right by employees, by shareholders, by the communities we serve, we should be given opportunity to act on our own," Delta CEO Richard Anderson told a Senate Commerce subcommittee.

Anderson and Northwest CEO Douglas Steenland repeated their claim that after a merger, Delta does not plan to reduce service to smaller communities or raise prices. While Anderson told two other committees last month that about 1,000 headquarters jobs could be cut in Minnesota and Atlanta, where the combined airline will be based, they CEOs said again Wednesday that layoffs will be minimal elsewhere.

Merger opponents, however, told the senators the merger is just another quick fix that will not solve industry-wide problems such as high fuel prices and high executive salaries.

"I've been in this industry for 33 years and I've heard a lot of promises. . .and the commitments made today will mean nothing tomorrow," said Robert Roach, general vice president of the International Association of Machinists and Aerospace Workers union.

"It's time we fix the (industry's) problems instead of having short-term fixes that only provide millions and millions of dollars to the people at the top of these airlines," he said.

Patricia Friend, international president for the Association of Flight Attendants union, said she was concerned that a new, bigger Delta could use its heft to cut labor costs and keep out unions. She said the financial problems facing all airlines today demands attention from regulators.

"We believe Congress must take a hard and very serious look at where this industry is heading," Friend said. The current airline industry, she added, "is failing employees, consumers and communities."

Asked whether the new Delta would try to keep out union organizers, Anderson said the company would only try make sure employees were educated and that fair elections were held.

"We've tried very hard to create a positive work environment at Delta," Anderson said, prompting some chuckles from Delta employees in the audience.

Groups representing airline workers have taken the lead in opposing mergers. On Thursday, the head of United Airlines' pilots union issued a statement saying a merger with US Airways, now under discussion, would do little to solve United's financial problems.

Thursday's hearing on the Delta and Northwest was designed to explore whether the deal to create the world's largest airline would hurt consumers or decrease competition.

Mark Cooper, director of research for the Consumer Federation of America, suggested it might not make a difference.

Either way, Cooper said, consumers face "fewer choices, higher prices and crummier service."

Like Friend, Cooper called on Congress to consider re-regulating the airline industry.

"The public interest is not being served by the current model," he said.

Sen. Kay Bailey Hutchison, R-Texas, said she has reservations about the planned merger, but also worries about the ability of the two separate airlines to compete against foreign and low-cost domestic carriers like Southwest without merging.

"In the main, I don't like the idea of mergers because I think the more competition we have, the better it is for consumers," she said. "However, I don't think it's the role of Congress to step in and try to impart our policies on these airlines, at least not as it refers to mergers."

Sen. Jay Rockefeller, D-W.Va., who has been critical of consolidation in the aviation industry, echoed some witnesses in emphasizing the role of regulation in addressing some of the industry's ongoing woes.

"I'm not against the merger," Rockefeller said, but "I want very, very strong scrutiny of it by the Department of Justice and others." Regardless of what happens, he added, "at the end of the day, we're going to have to fix this system."

Much of the discussion, in fact, centered not on the merger but on the same topic that's on consumers' minds everywhere — rising fuel costs.

Northwest's Steenland said 40 cents of every dollar his airline makes is spent on fuel. In the past year, he said, his company's fuel bill increased by $450 million.

Those costs, he said, must be passed on consumers, which will ultimately reduce ticket sales. As a result, he said, U.S. airlines must seek more revenue by expanding further into international markets. Delta and Northwest executives have repeatedly said that is a prime benefit of the merger plans.

But Roach, the union official, pointed out that a combined airline won't do anything to address the industry's biggest problem these days.

"If you put these airlines together," he said, "it's not going to drop the price of oil by one nickel."

Bob Keefe is a Washington correspondent for Cox Newspapers.