Ten years ago this month, Delta Air Lines merged with Northwest — and promised that would finally create stability for customers and employees, help hubs including Salt Lake City to prosper, and show that consolidation is good for the industry.
Delta is marking the anniversary of that fusion — the first of a flurry of mergers that sought to help airlines survive bankruptcies, low-cost competitors, high fuel costs and recession — by saying it kept all those promises, and that Salt Lake City is a big beneficiary.
“We’ve essentially gone from fighting for our survival to a world where we are able to serially invest in our people and in our customers,” Paul Jacobson, Delta’s chief financial officer told The Salt Lake Tribune. He added that the merger helped to significantly increase employment and seats offered in Salt Lake — and investment in the airport.
While Salt Lake City is Delta’s fourth largest hub (behind Atlanta, Detroit and Minneapolis), it is the airline’s fastest-growing, adding 25 percent more seats since 2014. Salt Lake is part of a Western tri-hub structure for Delta with Los Angeles and Seattle.
Salt Lake “is more important and more valuable than it was as a stand-alone hub with a smaller West Coast presence prior to the merger," Jacobson said.
Fees paid by Delta will fund much of the ongoing $3.6 billion project to rebuild Salt Lake City International Airport. “It is a really big investment for us. I think it signals our value that we have for the airport and for the community,” Jacobson said.
Leah Hogsten | The Salt Lake Tribune The new Salt Lake City International Airport expansion project, Monday, Oct. 22, 2018. The first phase construction of the $3.6 billion project is due to open in 700 days. Nearing completion is the new concourse for aircraft gates, an enclosed terminal, the steel skeleton of a new "gateway" building, a five-story parking garage and elevated roadways.
He adds that in Salt Lake, “You are going to continue to see an increase in Delta planes and mainline service with more premium seats…. We’re excited about what Salt Lake can do in the future.”
Delta this week issued a variety of statistics to show how its hub operations at Salt Lake City International Airport benefitted in years since the merger, including:
• The number of Delta employees in Salt Lake City grew from 3,000 to more than 4,400. The profit sharing they received grew from zero in 2008 to a combined $42 million this year.
• Delta’s number of seats on flights departing here grew by 1.8 million yearly comparing 2008 to now, from 682,534 a month to 868,187. The number of departures actually decreased from 290 daily to 275 — but Delta is using more large aircraft now.
• Delta’s destinations from Salt Lake City grew from 90 to 100.
• The number of foreign countries served increased from three to five. Delta (with its international partners( is the only airline now offering nonstop international service from Salt Lake City. The 11 destinations are Amsterdam, Paris, London, Vancouver, Calgary, Toronto, Cancun, Guadalajara, Mexico City, Puerto Vallarta and Los Cabos).
(Scott Sommerdorf | Tribune File Photo) Delta's first flight from Paris touches down at Salt Lake International Airport, Monday June 2, 2008.
• Delta is by far Salt Lake City’s largest carrier: now operating 70 percent of overall seats and 73 percent of all departing flights.
.• Delta is generally upgrading equipment used in Salt Lake City. Now, 53 percent of flights are on larger mainline jets (rather than smaller regional planes) compared to 37 percent five years ago. The average number of seats on Delta flights here now is 116, compared to 97 five years ago.
Jacobson, who has been with Delta for 21 years and says he’s “lived with the best times and the worst times in the industry,” says the Delta-Northwest merger was ideal by matching airlines with different strengths.
“Northwest was strong particularly in the Pacific and the Midwest. Delta was strong in the Southeast and in Europe. When we put those together, we really created a network that gave us the platform to become at the time the world’s first truly global airline.”
He added, “That stability has just allowed us to continually invest in the product, invest in our people, and invest in our communities…. I can’t think of a better combination of airlines.”
As an example of how their mutual strengths changed things, in 2010 as the airlines were merging “we canceled over 5,500 flights for maintenance reasons.” This year, “We will cancel fewer than 100 flights, a 99 percent reduction in maintenance cancellations that is driven by the financial health of the company and our ability to compound investment year after year.”
He adds that while Delta was once in bankruptcy before the merger, this “will be the fourth consecutive year that we have made $5 billion in profits” — and half of that is reinvested in the company.
“We are grateful to the Salt Lake community," Jacobson said, "and hope that as we cross this 10-year milestone that everyone can see the benefits we’ve been able to generate.”
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