Delta Air Lines is striving to keep a direct flight between Minneapolis-St. Paul and Asia, the company’s new boss said Wednesday.
Just two days after becoming Delta’s chief executive, Ed Bastian met employees, community leaders and top customers in the Twin Cities to reinforce the airline’s commitment to its Minnesota hub.
Delta dominates air travel at Minneapolis-St. Paul International Airport, but anxiety about its strategy has percolated locally ever since it bought Eagan-based Northwest Airlines eight years ago. Bastian sought to alleviate the latest source of hand-wringing: a warning by the company several months ago that Minnesota’s only daily nonstop flight to Asia was in jeopardy because of new rules in Japan.
He said Delta ranked MSP its No. 1 new route choice in its petition to the U.S. Department of Transportation for three daytime flights to Tokyo’s Haneda Airport.
Delta already flies nonstop from MSP to its hub at Tokyo’s Narita International Airport. But the opening of new routes to Haneda could reduce the competitiveness of Delta’s Narita hub. Delta hopes to protect MSP’s Asia connection by shifting the flight to Haneda.
“We let the authorities know MSP-to-Haneda is our first request for a new slot,” Bastian said. “We look at the historical importance of the MSP-Tokyo route going to Narita — the amount of business travel it carries, the amount of economic activity it has spurred — and we need to preserve that [at Haneda].”
The move also acts as a thank-you gesture to Minnesota’s government officials and business leaders who quickly mobilized on Delta’s behalf to plea with the DOT.
“We want to thank the local community for coming out strongly supportive of Delta in this request and we ask that they continue to express that support,” Bastian said.
In September 2014, then-CEO Richard Anderson told a group in Minnesota that Delta hoped to explore a new nonstop route from MSP to China “in the next three to five years.”
Bastian, who has served as president since 2007, succeeded Anderson, who formally retired Monday. Bastian said he also believes an MSP-to-China route “would be an ideal opportunity” once Delta receives its new Airbus 350 planes — which will replace the retiring Boeing 747 aircraft — next year, and if U.S. carriers are granted more traffic rights in China. Foreign governments negotiate how many flights from each country it will allow to operate within its borders.
“Right now with the existing China-U. S. bilateral [agreement], we are at the limits for the U.S. carriers,” Bastian said. “There are no more designations available.”
If the U.S. carriers successfully petition for more traffic rights in China, Bastian said Delta plans to model its expansion there after its partnership with KLM in Amsterdam, which was formed by Northwest Airlines before its merger with Delta in 2008.
“We will be looking to take that same strategy forward in China, and Shanghai would be that center of focus,” Bastian said.
Delta took a major step toward China last year when it bought a 3.5 percent stake in China Eastern Airlines, a Shanghai-based carrier.
Minneapolis-St. Paul was Bastian’s first city visit in his tour over the coming months of Delta’s key markets.
Delta’s acquisition of Northwest Airlines left the Twin Cities without a large hometown carrier. It took some administrative jobs to Atlanta, eliminated others and stoked worries about the region’s economic development.
“I acknowledge there was a lot of anxiety post-merger about what was going to happen. But remember it wasn’t just the merger, we did the merger at the bottom of the economic collapse,” Bastian said. “We look at Minneapolis as our second home.”
He added that many companies downsized at that time, but Delta has emerged stronger than it was before the merger and economic downturn.
“The business today is in much better shape than it was pre-merger, not just the quality of the service and quality of the operation but the actual size of the business,” he said.
Delta has invested significantly in its Detroit hub as well, but the airline’s projections show MSP this summer will become Delta’s second-largest hub after Atlanta.
“We have 450 daily flights to 150 destinations this summer,” Bastian said. “For the size of city Minneapolis is, that gives us an appropriate recognition of the importance of this community and this airport.”
Following morning meetings at the Minneapolis Club and W Hotel, Bastian headed to the airport for a town-hall-style meeting with hundreds of Delta employees. The airline employs more than 8,000 workers at its MSP hub.
Bastian takes over at a time of unprecedented prosperity for the company. Delta turned a $4.5 billion net profit in 2015, more than it has ever made in a single year.
Delta goes toe-to-toe with American and United airlines in terms of traffic size but has caught the attention of Wall Street by aggressively shedding debt. In the past five years, the company has reduced its debt from $20 billion to $5 billion.