Is Delta Blind To Possible Merger Risks For Its Political Allies?

(4/24/08) Based on the most reliable of sources, it appears Delta Airlines may view as relatively unimportant the potential interest in Congress over a proposed merger with Northwest Airlines - unless someone “slips something” into the aviation bill.

That should come as a major shock to political leaders in Washington and Georgia. Even more disturbing, there is a clear impression that the company has little or no concern for the popularity of the merger among Georgians.

According to an InsiderAdvantage survey conducted last week most Georgians remained opposed to or undecided over the merger. The company apparently, based on these sources, sees no reason why Georgians would oppose the effort.

The high level media staff at Delta obviously missed the telling cartoon by two-time Pulitzer Prize winning polecat cartoonist Mike Luckovich of the AJC lampooning the public’s treatment by airlines just this week. They will likely see it in Newsweek within a matter of days.

It appears the airline views a relatively disengaged Department of Justice Anti-Trust Division to likely rubberstamp its deal with Northwest, implicitly with the support of Georgia’s highest ranking Republicans.

After putting his political life on the line saving Delta from going out of business, this news should come as particularly disturbing to U.S. Sen. Johnny Isakson, who almost single-handedly led the bailout of the airline, which, until the recent acceleration in fuel costs, appeared to be headed towards financial stability.

Isakson received heat from the more conservative elements of his own party who have coupled the Senator’s support and involvement in the increasingly politically unpopular “No Child Left Behind” legislation, his involvement in an attempted compromise over illegal immigration, and the so-called bailout of the airline as too “liberal” on numerous conservative blogs.

Already State Insurance Commissioner John Oxendine has announced he is running for Governor. Isakson was rumored to be considering a run in 2010 at the request of the Atlanta business community. However, the move by Oxendine, who is expected to use Isakson’s record as an appeal to conservative Republicans, makes an Isakson race more unlikely. Other conservative candidates, including Lt. Governor Casey Cagle are also likely to run in 2010.

Isakson is not the only elected official who could suffer from Delta’s perceived (indeed, per our impression, real) belief that the political winds both aloft nationally and in Georgia are all clear. Congressman Lynn Westmoreland, who has been rumored to be setting up for either a race to replace Isakson or, perhaps for Governor, represents many Delta employees. A cavalier approach by the airline could force Westmoreland to stand by a politically unpopular move.

Ironically, the InsiderAdvantage poll showed Delta enjoying a very high favorable rating in its home state. Not necessarily so nationwide and certainly not in Minnesota where opposition to the merger runs strong.

Among those Georgians who flew Delta in the past year, concern over the merger is more substantial. Only 30% of those who have flown Delta in the past year said they had no concerns about a merger. A whopping 70% expressed concerns. Here is a list of the greatest concerns based on the InsiderAdvantage survey conducted for the Southern Political Report April 17th in descending order of percentage of concern:

• Reduced quality of service

• Potential for longer delays

• Loss of Frequent Flyer Points

• Concern for lost baggage

With the news yesterday of the combined staggering losses for Delta and Northwest last quarter, one would think that the soaring cost of fuel would argue for swift approval of the merger. In fact, writing in the on-line publication Politico yesterday, a former Justice Department official argued strongly that the two carriers meet the criteria for approval under the current administration’s view of airline antitrust laws.

The big question is whether Georgians understand the detailed reasons why such a merger is essential. And if they do not, will the rescue of Delta Airlines ever be appreciated by voters? Or will complications related to the merger of two giants cause voters to take their frustrations out on political leaders who were trying to do the best thing. Delta has assumed that the public understands too much about the current status of the airline and its needs.

And with only 40% of Georgians supporting a merger in our latest poll, this rather “business-like” lip service could save an airline—but cost a U.S. Senator and others their political careers in the future. The public is angry and expects bailouts and special deals to benefit them.

For political leaders to suffer because of the airline’s ignorance would be a shame.