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Defenestrator

Minnesota: Card Carrying Member of the Mile High Club

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After $761 million in public financing in the early nineties, countless broken promises to workers, unions, legislators, and the inane poke to the rectum that is the price of the Northwest SmartSnack, Minnesota's favorite dysfunctional relationship is over. Sure, it was great to throw our international hub status in the faces of those who would dare deem us flyover country. And surely the fascinating articles on Minnesota cities and landmarks featured in NWA WorldTraveler brought hordes of screaming tourists to our fair state and raised the profile of Forest Lake on the world stage. The tax revenue didn't hurt either.

But we paid dearly for these perks. For no matter how many times the airline took advantage of our willingness to bend over, we never once got a reacharound. And make no mistake, the announced acquisition of Northwest Airlines by Delta is no exception.

Many are calling this move a merger. I call bullshit. Delta is paying $3.1 billion for Northwest, the company is going to be called Delta, and the headquarters is going to be located in Atlanta. This shouldn't strike anyone with a functioning neuron as a merger of equals. Of course, this isn't such a horrible thing for the companies. By trimming operations, marketing, and executive staff, not to mention logistics, at various airports, the company gets to continue to do business in a remarkably inefficient way - continuing the holding action the airlines have been running for the last decade as they try to cope with the economic realities of the modern world.

That's what this merger is about. Two large airlines, both in fairly weak positions coming off bankruptcy, recognizing that being bigger would allow them to continue the status quo for a few more years before the economy and their own stultifying cultures and abject idiocy brings them inevitably to the conclusion that the only way to survive and cover the rising cost of jet fuel is to sell "executive services" in WorldClub lounges.

But what does this mean for Minnesota? In the short term, we're getting buggered again, sans lube. Northwest HQ will leave town, along with the high paying jobs and tax revenues that accompany it. The newly merged company will have a conversation with our esteemed governor to discuss how it can adhere to the "spirit" of its agreements with the state and much noise will be made about the obvious benefits of whatever agreement is made to release the company from its obligations - maybe we'll take flying unicorns instead of planes, and the in-flight drink service will include MDMA cocktails, making for the happiest red-eye in aviation history.

Regardless, Minnesota's grand tradition of being boned by business will, of course, preclude taking payment on the $245 million in bonding money the airline technically would owe the state for pulling the headquarters out of the state.

Of course, Northwest leaving would present more opportunity should our government show some huevos and take away some of the preferred provider status the airline enjoys at MSP. For years, Northwest has rabidly turned away competition at the airport by undercutting competitor pricing and locking up three quarters of the gates at the Lindbergh Terminal. With concessions from the uber-line, we could have real competition in the market. Southwest and JetBlue might actually set up shop here, thus dropping average fares for Minnesotans. Because sure, we have service to 160 cities, but on average it costs us $60 more per ticket to get to any of them, according to a University of California, Berkeley study.

But given how many times our government has rolled over and wet itself in the face of pressure from business interests, I'd say das uber-line will be happily gouging Minnesotans for Cancun vacations until we rise up in a grand populist rebellion, or until they realize what kind of margins Ashley Alexandra Dupre could bring to the WorldClubs.

 

 

 

8 Reader Comments

Dr.K. (not verified)10:17am
Apr 16
You're far too cynical. Northwest is an honorable member of our business community -- sort of the Red McCombs of airlines. I fully expect that they will uphold their part of the bonding bargain, though, due to the economic requirements of paying their executives competitive salaries, will have to renegotiate their payback down to a more reasonable level of 150 seven dollar per hour jobs at the call center in Hibbing. Maybe we can even pick up some of the tab under the Lottery proceeds, since it will benefit our economic and natural environments. However, the hard truth remains: it is MAC that is allowing the unlubricated violation. They have rolled over for these bastards for years. If they hadn't done a puppy piss on their own feet, but had stood up to NWA, we'd already have Southwest here. We also might have an airport that isn't in the middle of a residential area where planes shake the houses of thousands of people a day. At least now we won't have to continue to be the Hedda Nussbaum of states.
Rich Goldsmith12:21pm
Apr 16
I don't know that the folks in the flight path mind all that much. They've gotten tens of thousands in improvements and upgrades to those homes. But you're absolutely right. By the end of this, the MAC will have urine-soaked feet and we'll be stuck with a hub and no hope of anything even faintly resembling competitive pricing. The airlines haven't changed operating practices in years. I have no doubt they'll manage to screw this up, and we'll be boned along with them when either the state or federal governments are forced to bail them out again. Maybe I can pick up one of those sweet call center jobs though.
Cristina Cordova12:39pm
Apr 16
"Move Ya Body" would need only minor tweaking: If you wanna take me in the WorldClub, you gotta do it right, baby, show me some love. Sex, money, drugs is what I'm all about. Step your game up so you can see for yourself. Brush up against me and whisper in my ear. Make me feel what you want to feel. Numb to the touch, deeper pulse inside. Let's fly Northwest Airlines, turn it up inside.
Rich Goldsmith01:02pm
Apr 16
Brings new meaning to frequent flier miles.
Dr.K (not verified)01:20pm
Apr 16
Here's a little tidbit for those of you who live in the Twin Cities and don't have to deal with NWA's outstate criminality. I live in Bemidji -- 225 miles from Minneapolis/St. Paul. I have to do the journey frequently -- most of us who are professionals in outstate Minnesota face this need. If I wanted to fly NW's little turdlet Mesaba to Minneapolis within the next few weeks, I could do so for a mere $482. And that's a better price than we often see. I've seen it as high at $1200. Several times in the past other carriers have tried to come in and compete, and NWA has dropped its prices and set up sweetheart connection prices for folks continuing on out of MSP. But as soon as NWA blows these interlopers out of the water with ferocious price-cutting, it cranks our flight costs back up again. There have, literally, in the past been instances when it was cheaper to fly from MSP to Paris than from MSP to Bemidji. You can call it economies of scale, you can call it what you want. Up here, we call it getting screwed by Big Red. And I'm willing to bet that these are the good old days. And if you think we're singled out, you could go to MSP from Hibbing within the next few weeks for $485 and from Thief River for $518. Oh, and God help you if you need to go from small airport to small airport. If I needed to fly the eighty miles from Bemidji to Brainerd, I could buy my rt ticket for a mere $924. That's roughly $45 a mile. Are we having fun yet? That's what lack of competition brings. So, unless MAC gets some competition in to MSP, prepare to take the hard one in the dark side. Coming soon to an airport near you.
Uncle Sid (not verified)06:56pm
Apr 17
Grow up. Grow up. GROW UP. First, your profanity is unnecessary. Second, you don't understand the airline business. It is tough, and has rarely been profitable over the last 80 years of commercial aviation in the US. Airlines are required to fly routes and are regulated like the Postal Service yet expected to make money. There's a conundrum. Barron's wrote a long story about Northwest over 15 years ago in which the author stated NWA had three hubs, "Snowtown, Motown and Notown." Guess which MSP is. Of course there have been incentives for them to keep this a hub. And they will be required to fulfill their legal and financial obligations here. A lot of people don't want to fly here, believe it or not. And, believe it or not, I have no business relationship to Northwest, Delta or any other airline. I do, however, understand that this is a business and must be run as a business.
Dr. K (not verified)07:35pm
Apr 17
I would say that the profanity is nothing compared to the obscenity of your argument. The airlines have gotten all the transportation money that could and, in my mind, should, have gone at least in part to refurbishing our national rail network. They have used unfair advertising -- fares advertised in terms of one way costs which are only applicable to round trips; they have consistently made promises that they haven't kept, they have turned their frequent flier programs into jokes, and, in the case of our local airline, have manipulated the politicians, the airport commission, and the state to do their unsavory bidding. That we allowed this manipulation is no credit to us; that they have been able, in the face of this history, to convince what I assume is a reasonable citizen such as yourself of the merits of their behavior, is eternally to their credit. Unfortunately, it is to the long term detriment of those of us who live in reality and don't make broad brush analogies between the airline and generalized "good business practices."
Rich Goldsmith11:58pm
Apr 17
I'm ever so sorry to offend your tender sensibilities, and perhaps I do need to grow up. My girlfriend certainly tells me so often enough. However, might I suggest a significant dosage of anti-psychotic meds? You're living in a delusional fantasy, my friend. One in which the airlines uphold their obligations and are actually effectively run and managed. Northwest was bailed out well after deregulation of the airlines. The company had ample time to revamp and revisit its business model, and yet it still was on the verge of going belly up. And post bailout, it consistently failed to live up to its obligations to workers, consumers and the state while engaging in business practices designed to protect the airline's hub that were questionable at best.

Now, there's no question that the state and the MAC acted as enablers for the airline's behavior. As you say, NWA is a business, and like any business, it will push the envelope of good behavior to make money. However, airlines are no longer forced to fly routes in the post-deregulation era -- hell, they're barely forced to maintain their planes. In reality, the only reason they're not making money is because they're run in much the same way they were 30 years ago. Given the sheer idiocy, inefficiency and morally and ethically bereft way the airlines are run, I feel exactly zero compunction in saying they're fucked. And because of the way those responsible for negotiating with NWA have rolled over and let the airline have its way with them, I'm more than confident in saying that we'll be lucky to see a dime of the money Northwest will owe the state when the HQ moves to Atlanta.

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