Thursday, February 08, 2001

Talks raise questions about Delta hub status




By James Pilcher
The Cincinnati Enquirer

        Delta Air Lines and Continental Airlines reportedly have been talking merger for almost a week, meaning a historic rivalry between Cincinnati and Cleveland could heat up about something other than football.

        Both airlines have hubs within 250 miles of each other — Delta at the Cincinnati/Northern Kentucky International Airport and Continental at Cleveland Hopkins International Airport — leaving many at both facilities wondering which might be closed if the two companies did merge.

        But analysts say that if a deal is done correctly, if at all, neither Cincinnati nor Cleveland — and the thousands of jobs and frequently flights that come with it — would have to lose hub status.

        “Chicago and St. Louis aren't that far apart, but American would keep both open if the TWA deal goes through,” said Aaron Gellman, director of Northwestern University's Transporta tion Center. “It can be done, and both could be complementary to each other.”

        Delta and Continental began discussing a merger last week, with The Washington Post reporting Sunday that the smaller Continental (fifth nationally) would purchase Delta, the nation's third-largest carrier. With 26 percent of the market, the merger would create the nation's largest carrier, ahead of both those created by the proposed American/TWA and United/US Airways mergers. Both those deals are pending federal regulatory approval.

        Continental and Delta officials would not comment on a possible merger Wednesday and would not speculate on what would happen to the two hubs.

        But experts say that even if Cincinnati and Cleveland both stayed open, there would be a natural paring at either one.

        Houston-based Continen tal's Cleveland hub is its third-largest behind Houston and Newark.

        Delta's Cincinnati hub is its second-largest behind Atlanta, and the Atlanta-based airline has spent billions here between a new concourse and its 1999 $1.9 billion purchase of Comair, the Hebron-based regional airline.

        Cincinnati is also larger in area — and a proposed third north-south runway would enable three simultaneous takeoffs or landings. The Federal Aviation Administration is expected to release a rough draft of an environmental impact study this month or in early March, meaning that approval could come as soon as this summer. The $250 million project could be online by 2005.

        Darryl Jenkins, director of the Aviation Institute at The George Washington University, said Cincinnati would probably get the nod, given those numbers.

        “Cleveland is one of the less strong hubs in the entire system,” Dr. Jenkins said. “That, plus the fact that Cincinnati is Comair's hub with all those wonderful RJs (regional jets), Cincinnati has a lot going for it.”

        Still, Cleveland does have some positives. It has a larger population for “origination and destination” traffic, or trips directly to and from Cleveland, compared with Cincinnati, which gets most of its passenger traffic from transfers.

        And Tuesday, Cleveland Mayor Michael R. White and Brook Park Mayor Thomas J. Coyne Jr. signed a land-swap deal that gives the 1,900-acre airport room to add two more runways. One runway is already in the works for 2006, although it also awaits federal approval.

        “We're worried and concerned we could lose the hub,” Cincinnati airport spokesman Ted Bushelman said. “But we still feel we have a strong position, which would be made even stronger with that third runway.”

        Cleveland airport officials did not return several phone calls Wednesday.

        “Whatever happens, don't expect it to happen quickly,” Dr. Jenkins said. “I would imagine that United and US Airways would operate separately for at least two years before they really start making changes. The same would probably hold true for Delta and Continental.”

       



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