The Merger of Delta Airlines and Northwest Airlines:Effects of Downturn at Cincinnati Airport
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The main purpose of this report entitled “The Merger of Delta Airlines and Northwest Airlines- Effects of Downturn at Cincinnati Airport” is to analyze the effects of the Delta-Northwest merger on ...

The main purpose of this report entitled “The Merger of Delta Airlines and Northwest Airlines- Effects of Downturn at Cincinnati Airport” is to analyze the effects of the Delta-Northwest merger on the Northern Kentucky International Airport. This report commences by giving a brief overview of Delta, Northwest Airlines and the Northern Kentucky International Airport. It then focuses on the motives for formation of the merger, and the effects the merger had on the Airport. The report also outlines our personal perspectives and views on the entire chapter.

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The Merger of Delta Airlines and Northwest Airlines:Effects of Downturn at Cincinnati Airport Document Transcript

  • 1. The Merger of Delta Airlines and Northwest Airlines: Effects of Downturn at Cincinnati  Airport                  1   The Merger of Delta Airlines and Northwest Airlines: Effects of Downturn at Cincinnati Airport Mr. Vishal Prabhakar April 18, 2012
  • 2. The Merger of Delta Airlines and Northwest Airlines: Effects of Downturn at Cincinnati  Airport                  2   Letter of Transmittal The main purpose of this report entitled “The Merger of Delta Airlines and Northwest Airlines- Effects of Downturn at Cincinnati Airport” is to analyze the effects of the Delta-Northwest merger on the Northern Kentucky International Airport. This report commences by giving a brief overview of Delta, Northwest Airlines and the Northern Kentucky International Airport. It then focuses on the motives for formation of the merger, and the effects the merger had on the Airport. The report also outlines our personal perspectives and views on the entire chapter. Yours Sincerely, |Vishal Prabhakar |
  • 3. The Merger of Delta Airlines and Northwest Airlines: Effects of Downturn at Cincinnati  Airport                  3   Abstract The paper focuses on the impact the Delta-Northwest merger made on the Northern-Kentucky International airport and re-emphasizes the importance and relevance of the relationship between the Airlines and Airports for growth and progress in the Air Transport Industry. The airport had once enjoyed a primary hub status for Delta Airlines and had a thriving economy and business climate in the Greater Cincinnati Area. Post merger the airport lost its primary hub status as Delta drastically cut down its flights due to various important factors thereby undermining its importance as a hub. The airport is now left stranded with few flights and has suffered loss of jobs and direct loss of business in the area. It is now trying to come to terms with the impact of the merger and looking to get back on its feet in the new decade.
  • 4. The Merger of Delta Airlines and Northwest Airlines: Effects of Downturn at Cincinnati  Airport                  4   Table of Contents Introduction   5   Delta  Airlines-­‐Brief  Overview   5   Northwest  Airlines-­‐Brief  Overview   6     Cincinnati/Northern  Kentucky  International  Airport-­‐Brief  Overview   7   Significant  Reasons  Behind  Merger   7   Effects  Of  Merger  On  The  Northern  Kentucky  International  Airport,  Cincinnati   8   Rise  of  Cincinnati  as  a  hub   8   The  Impact  on  the  Airport   9   Effect  on  Businesses  in  the  Greater  Cincinnati  and  Northern  Kentucky  Area   12   Conclusion   15    References   16    
  • 5. The Merger of Delta Airlines and Northwest Airlines: Effects of Downturn at Cincinnati  Airport                  5   Introduction Airlines and airports are very prominent and important partners in the aviation industry and facilitate an important relationship thereby enhancement of overall airline-airport system efficiency. Airline deregulation in 1978 was the turning point in the U.S airline industry. Since then many airlines have entered, merged or disappeared. Airlines and airports have developed a robust and effective relationship over the years, such as airline-airport alliances, lease agreements, project deals, airline bankruptcy and airline mergers etc. Usually, airports have always viewed the airlines as their primary customers. Airports make decisions considering airlines’ service. Some have legally binding contracts with airports, pays the airport aeronautical revenues i.e. landing fees, passenger facility charges, aircraft parking charges and other aeronautical charges. Airports have traditionally perceived passengers as part of the airline business and airlines have always considered the passengers as their primary customers but this view has changed when the commercial business began to replace the traditional public utility model of the airport. Airports are increasingly formulating opportunities to collect revenue from non- aeronautical operations i.e. rents, car parking, concessions, etc. Since airlines and airports face revenue and profit fluctuations under increasingly unstable business environments, the airline- airport partnership tends to share the risks and stabilize the financial condition of the partners. The paper analyses this important relationship, focusing on the merger of Delta and Northwest Airlines, and its effect on its hub airport in Cincinnati (Northern Kentucky International Airport). Delta Airlines-Brief Overview Delta (DL) is a major airline based in the United States with its headquarters in Atlanta, Georgia. The company was founded in 1924 as the world’s first dusting organization named “Huff Daland Dusters” and later in 1928, the company was sold to Woolman and was renamed “Delta Air Service”. Delta airline flew its first domestic passenger flight from Dallas, Texas to Jackson, Mississippi with stopovers in Shreveport and Monroe, Louisiana in 1929. Chicago Airlines and Southern Airlines merged into Delta in 1953. Later Northeast Airlines and Western Airlines became a part of Delta through a merger in 1972. Delta was busy developing its routes and expanding its business throughout the United States. Its first long-haul route was inaugurated on April 30, 1978 from Atlanta to London. The airline deregulation act in 1978 brought more significant changes that had not been experienced in the entire 40 years the airline industry spent under government regulation. In 1991, Pan American World Airline
  • 6. The Merger of Delta Airlines and Northwest Airlines: Effects of Downturn at Cincinnati  Airport                  6   announced bankruptcy and Delta airline bought its remaining assets and also got hold of its transatlantic routes. This gave Delta new routes and customers, which allowed the airline to grow quickly.1 On April 14, 2008 the airline announced a merger with Northwest airline, and created America’s premier global airline. As of now the combined new Delta airline offers more than 5341 flights on a daily basis and serves more than 160 million customers each year. It is connected with 333 destinations worldwide, 100 international and 233 domestic. Delta employs 75000 employees and operates more than 700 aircrafts. It operates from eight domestic and three international hubs i.e., Hartsfield-Jackson Atlanta International Airport, Cincinnati/Northern Kentucky International Airport, Detroit Metropolitan Wayne County Airport, Salk Lake City International Airport, Minneapolis-Saint Paul International Airport, Paris-Charles de Gaulle Airport, John F. Kennedy International Airport, LaGuardia Airport, Memphis International Airport, Amsterdam Airport Schiphol and Narita International Airport.2 Northwest Airlines-Brief Overview Northwest Airline (NWA) was a major U.S based airline founded in 1926. It had its headquarters in Eagan, Minnesota near Minneapolis-St. Paul International Airport. In 1926, the airline started its domestic services and in 1928, it started its international flights to Winnipeg, Canada. The airline expanded its operation to many small cities in that region throughout the 1920s. Northwest Airlines was once upon a time the largest airline in United States in terms of the domestic miles flown by providing its services to over 100 destinations. Also, the airline operated more flights to Canadian cities compared to any other U.S carrier. The company had a massive fleet of 315 aircraft which consisted of Boeing, Airbus and McDonnell Douglas DC. The airline operated on a hub and spoke system with its hubs in Memphis, Minneapolis, Detroit, Tokyo and Amsterdam. In 2005 Northwest Airlines, one of the sixth largest carriers, filed for bankruptcy for the first time in its 79-year history mainly due to massive losses and inability to pay off its debts thereby drastically reducing its employees and their benefits. The company gradually emerged from bankruptcy in 2007 and recorded a first semiannual profit of $1,751 million and a second semiannual profit of $342 million3. The merger with Delta was formally approved by the U.S Department of Justice in October 29,2008.The shareholders of both the companies approved                                                                                                                 1  Delta airline history, http://news.delta.com, 2012-02 2  Stats & facts, http://news.delta.com, 2012-04 3 Annual report and comprehensive overview of the company for the past year, http://library.corporateir.net/library/11/111/111021/items/285319/NORTHWESTAIRLIN10K.pdf, 2008-02
  • 7. The Merger of Delta Airlines and Northwest Airlines: Effects of Downturn at Cincinnati  Airport                  7   the merger giving 1.25 Delta shares for each Northwest share with the total value of the deal amounting to $ 2.6 billion. Cincinnati/Northern Kentucky International Airport-Brief Overview Cincinnati/Northern Kentucky International Airport is also known as the Greater Cincinnati Airport (CVG) and is located in Hebron, Kentucky around fourteen miles from downtown Cincinnati. It serves the three states of Indiana, Ohio and Kentucky. Prior to 1947, the air traffic in the area was focused around Lunken Field but the Cincinnati/Northern Kentucky International Airport replaced Lunken field because it frequently experienced fog and the site was prone to flooding. The Cincinnati airport has three terminals with Delta operating all its flights out of Concourse B in Terminal 3. This airport was Delta airlines’ second hub after the Hartsfield-Jackson Atlanta International airport. The airport experienced tremendous growth in the number of passengers after deregulation, as Cincinnati Airport became a major gateway when the airport became a Delta hub in 1986 and the airline added nonstop services to Europe, London and multiple domestic flights per hour to major cities around the country. As of now, the airport is primarily served by Delta, US Airways, American Airlines, United, Air Canada, DHL and FedEx4 Significant Reasons behind Merger Mergers are usually formalized due to various beneficial reasons. They aim in reducing expenses, reducing competition, expansion of services, market domination, increasing customer benefits, increasing quality in terms of performance and services, etc., If the expertise of both the firms is incorporated efficiently then the merged company would have greater potential and would achieve higher growth than the individual company. However, mergers can create serious implications for travelers as well as employees directly or indirectly. The Delta-Northwest merger was formulated to create a stronger, stable and better- positioned airline by combining the complementary end-to-end networks of both the airlines, thereby achieving substantial benefits and a more comprehensive footing in the global market. The merger was created with the intent of minimize their expenses by rationalizing its routes and doing away with unproductive and low-yield routes considering the rising fuel prices. Furthermore, Northwest and Delta’s membership in the Sky Team alliance gave it better network compatibility. “Together, we will have a more robust platform for profitable international growth. Combining both carriers’ international and domestic strengths, with our                                                                                                                 4  Stulz, Larry,  Cincinnati/northern Kentucky international airport (cvg). (n.d.). Retrieved from http://www.cincinnati-transit.net/cvg.html  
  • 8. The Merger of Delta Airlines and Northwest Airlines: Effects of Downturn at Cincinnati  Airport                  8   worldwide SkyTeam partners, we are well positioned to lead the industry and deliver value to our shareholders.”- Edward Bastian, Delta president and chief financial officer.5   Effects of merger on The Northern Kentucky International Airport, Cincinnati Apart from the benefits, the merger of Delta and Northwest has also given rise to many concerns in the air transport industry. It has affected air travel and the dependent industries to a larger extent. This merger is used as a reference by the U.S airline industry as being the first big scale merger among large airlines. Consolidation among both the airlines and a subsequent reduction in flights nationally, had put the squeeze on some of Americas metro areas while giving strength to markets that had kept their hold on airline hubs.6 All of this came at a cost to consumers in the form of higher fares, lower service quality, and less choice. In this paper we focus on the effects of the Delta- Northwest merger on the Northern Kentucky International Airport, Cincinnati (CVG). The merger of Delta and Northwest Airlines reduced flight capacity from the Cincinnati hub by 22 percent in 2008 with an additional 17 percent reduction in 2009.7 Delta announced additional cuts in February 2010 by eliminating five destination cities. This left CVG with 63 destinations served by mainline and DL connection flights, down from 130.8Many businesses in Cincinnati have urged Delta to restore the service level it had in the late 1990s and early 2000s (decade) while some have already relocated to cities with more available flights. Delta has cut service about a third from its peak daily departures, and it continues to be moving towards a strategy building up its hubs in Atlanta, Detroit and New York to the detriment of its once thriving Cincinnati hub.9 Rise of Cincinnati as a hub Delta was just beginning to spread its wings in the late 1970s, when deregulation allowed airlines to go where they wanted. The once conservative company had primarily served the South, but was on the hunt to expand into the Midwest.                                                                                                                 5  George, H, Airline deal may benefit travelers, delta, northwest merger could improve local service, http://search.proquest.com.ezproxy.libproxy.db.erau.edu/docview/332150834,2008-10   6 Ramsey, Mike, Airline Mergers Leave Airports Off the Radar, 2011-09-28 7 Kelly Yamanouchi, Cincinnati hub is shrinking, Atlanta Journal-Constitution (ajc.com), Retrieved 02-08-2009 8 Pilcher, James, Why CVG lost half of all flights, Cincinnati Enquirer (Cincinnati.com), Retrieved 2011-06-03 9 Bolton, Doug, Airport CEO: Name your price, Delta, Cincinnati Business Courier (bizjournals.com), Retrieved 2011-06-02  
  • 9. The Merger of Delta Airlines and Northwest Airlines: Effects of Downturn at Cincinnati  Airport                  9   United Airlines and American Airlines both had bases in Chicago. Continental Airlines already had a strong presence in Cleveland, and the struggling Northwest was building a hub in Detroit, having run out of room in Minneapolis. That left Cincinnati, which offered many benefits to Delta: CVG was well situated to serve a small but vibrant business community that included an abundance of Fortune 500 companies. Delta was one of the first airlines to serve Cincinnati in the 1930s and so had strong historical ties to the market. The weather was decent, there was plenty of runway space and airport officials were eager to get Delta. Over the next 15 years, Delta built a hub-and-spoke system that used CVG as a major connecting point for passengers from cities in the Midwest and East Coast traveling west. The airline contributed more than $500 million into a new terminal, the renovation of Concourse A and construction of Concourse B, a new fuel facility and repair hangar. The airline paid for the buildings itself, a scenario now almost unheard of. The airport reciprocated by building a $50 million Concourse C for Comair in 1994. The airport also spent nearly $350 million on two new runways over the next 15 years, financed through federal grants, bonds and ticket fees. Delta advertised its new hub to business travelers as a more efficient alternative to crowded OHare. And when Delta partnered with Comair early in the 1990s and then bought the carrier in 2000, CVG exploded in terms of flights and profitability thanks to the regional, small jet.10 The Impact on the Airport In September 2005, the airline announced a 30 percent flight reduction at CVG effective December 2005, post its filing of bankruptcy. But it wasnt until merger talks with Northwest got serious in 2006-07 that locals understood: The hub that had created such economic activity was in jeopardy. There were very good reasons for concern. Northwest already had two major Midwest hubs, in Detroit and Minneapolis, and a smaller Southern hub in Memphis. The airline was required to keep jobs in Minnesota because of a loan agreement with the states legislature, and Northwest was just settling into a new $1.2 billion terminal it had designed in Detroit. Also, the man chosen to lead the combined airline, current Delta chief executive Richard Anderson, ran Northwest during the time that the Detroit terminal was being built. That connection worried                                                                                                                 10 Pilcher, James, Why CVG lost half of all flights, Cincinnati Enquirer (Cincinnati.com), Retrieved 2011-06-03.
  • 10. The Merger of Delta Airlines and Northwest Airlines: Effects of Downturn at Cincinnati  Airport                  10   the Cincinnati locals, who feared that the Cincinnati hub will lose out altogether to the airport at the north. The fears of the local community came true when the merger led to the reduction of flights, destinations, loss of businesses and jobs for the community. The reasons for the drastic downsizing include business decisions, geographic factors and economic conditions beyond anyones control, according to dozens of interviews with current and former Delta officials, industry experts and airport representatives. Even though Cincinnati fliers paid the nations highest fares, ticket revenues were insufficient to sustain the heavy flight schedules usually found in much larger cities. The airport also faced a unique problem among major U.S. airports: Its ringed by five other airports within driving distance. They were building successful schedules with low-cost carriers that Delta kept out of CVG with aggressive, temporary price cuts. The final blow came with Deltas merger with Northwest Airlines in 2008. It included a massive Midwest hub in Detroit thats far stronger than CVGs. 11 With Detroit serving as a hub only 200 miles to the north and Memphis about 400 miles to the south and west, Cincinnatis formerly strategic position was less critical. In fact, Detroits importance continued to grow. The airport became Deltas second-biggest hub, behind Atlanta, when the company merged with Northwest, and it took on special status as the airlines primary connector for flights to Asia. Detroit was able to capitalize because its six jet runways gave it a lot more pavement than a lot of other airports. Two almost-new terminals increased its capacity to move and screen passengers efficiently. Cincinnatis airport already faced growing competition nearby, including airports in Dayton, Louisville, Columbus and Indianapolis, officials said. Some passengers were heading to those airports, rather than paying some of the highest fares in the country to support Deltas hub services at the Cincinnati airport.12 Now, rather than connecting travelers through weaker hubs like Cincinnati, Delta consolidated connections through the strongest: Atlanta, New York, Detroit, Minneapolis and Salt Lake City. Cincinnati, where Delta once had more than 600 daily departures, has now shrunk to the carriers smallest hub with roughly 130 flights a day. The airport no longer has direct flights to London, Amsterdam, Frankfurt and Rome. The only remaining intercontinental service by Delta is a daily departure to Paris in the evening.                                                                                                                 11 Pilcher, James, Why CVG lost half of all flights, Cincinnati Enquirer (Cincinnati.com). Retrieved 2011-06-03. 12 Breckenridge, Tom, The Plain Dealer, Northwest-Delta airline merger hurt hubs, including in Cincinnati, 2010-04-25
  • 11. The Merger of Delta Airlines and Northwest Airlines: Effects of Downturn at Cincinnati  Airport                  11   According to Kent Landers, spokesman for Delta Airlines, the decision to cut flights was taken as the number of flights in the market were much greater than what the local market could support and was an effort to “right size” the airport to customer demand and return it to profitability. Delta used to operate its flights out of three concourses at the Cincinnati/Northern Kentucky International Airport. Delta ceased operations at Concourse C in January 2009 and closed all 22 gates of Concourse A in Terminal 3 on May 1, 2010.It moved all its operations into Concourse B. This resulted in the layoff of more than 800 former Comair employees.13Over all there has been a loss of around 6,000 jobs at the airport in the period of 2005-2009.The airport now sits half empty and the authorities are now studying whether to demolish one of the abandoned concourses along with the two aging terminals. The Cincinnati concourse that could be demolished, Concourse C, was built in 1994 at a heady time for the airport. It was part of a $500 million expansion when Cincinnati had been designated Delta s No. 2 hub and the airport expanded to more than 100 gates. Presently in one of the old Cincinnati terminals, a baggage carousel sits quietly in the dark, unused. The people-mover train whisks by an empty concourse A without stopping.14The annual passenger figure using the airport in 2009 is around 10.6 million, way below the peak of 22.7 million in 2005. According to the president of Comairs flight attendant union, Connie Slayback, "The halls are eerily empty, the TV in the childs play area remains on for nobody to watch and the moving walkways are not moving, yet the announcements requesting people to stand to the right to let others pass on the left play continuously. It feels like you are entering a Stephen King novel."15 Cincinnati airport officials are partnering with local chambers to figure out how to attract international flights especially to London or Frankfurt. According to Meghan Glynn, vice president of external affairs for the airport, the airport is doing things that they had not done in decades and the situation is very entrepreneurial. CVG’s chief executive officer John Mok feels that the prime reason for the drastic effects on CVG is due to industry consolidation. He feels that the airport lost out in this situation because Delta’s current management team doesn’t really know what Cincinnati could do for them since they came over from Northwest.                                                                                                                 13 Associated Press, Delta further reduces operations at Cincinnati hub; 840 face layoffs, Cleveland Plain Dealer (cleveland.com), Retrieved 2011-06-02. 14 , 11 Yamanouchi, Kelly, The Atlanta Journal – Constitution, 2011-11-27 15 Pilcher, James, Why CVG lost half of all flights, Cincinnati Enquirer (Cincinnati.com), Retrieved 2011-06-03.
  • 12. The Merger of Delta Airlines and Northwest Airlines: Effects of Downturn at Cincinnati  Airport                  12   Effect on Businesses in the Greater Cincinnati and Northern Kentucky Area Business and other time-sensitive travelers require flexibility and convenience in air travel services. As a result, they are willing to pay a higher price for tickets that have limited or no restrictions on the time of purchase or changes in itinerary. Business travelers also value their time very highly, preferring nonstop service to the risk and delay associated with connecting service. Leisure travelers do not display these characteristics to the degree that business travelers do.16 Businesses that were located in Greater Cincinnati and Northern Kentucky, can no longer reach many destinations in one flight. The cutbacks have hurt frequent travelers and the business community in the Cincinnati area. The businesses usually had customers a direct flight away from Cincinnati and that now they have to connect at another Delta hub to reach the destination. It has become an all day event. Instead of seeing two or three customers a week like before, they often only see one. Even for leisure travelers in the Cincinnati area, the effects are noticeable as they were able to fly anywhere, anytime they wanted to but that is no longer the case.17 Several small firms with European headquarters have left the city, and the region has lost hundreds of millions of dollars annually. According to the vice president for economic development at Cincinnati USA Regional Chamber, Doug Moorman, the airport has lost some companies and an important tool to keep and attract companies.18 Delta Air Lines Inc., following its merger with Northwest Airlines Corp., has one of its notable businesses, Chiquita Brands International Inc., relocating its headquarters. According to the company, the airport has consistently been a problem for Chiquita. Being a mobile organization it is required to reach its customers or operations quickly and effectively, there is no scope of abrupt changes or delays. Chiquita, whose small headquarters (330 employees) oversees a network of plantations in Latin America and Asia, is expected to leave Cincinnati for Charlotte. The global access once enjoyed by the airport made it an ideal location for Procter & Gamble Co., Kroger Inc., Macys Inc.as well as Toyota Motor Corp and some of its suppliers. Other businesses with headquarters or operations in Cincinnati also find themselves hemmed in by the shortage of flights and the resulting increase in prices. Average airfares out of Cincinnati/Northern Kentucky International Airport are the fourth- highest in the country.                                                                                                                 16 Trial Brief of the U.S., supra note 5 at 10. 17 Yamanouchi, Kelly, The Atlanta Journal – Constitution, 2011-11-27 18 Breckenridge, Tom, The Plain Dealer, Northwest-Delta airline merger hurt hubs, including in Cincinnati, 2010-04-25
  • 13. The Merger of Delta Airlines and Northwest Airlines: Effects of Downturn at Cincinnati  Airport                  13   Flights are so expensive and inconvenient that engineers and executives at Toyotas Erlanger, Ky., manufacturing headquarters now almost always make the frequent, 520- mile round trip to visit their engineering base in Ann Arbor, Michigan, by road. According to Barb Schrempf, director of public and government affairs for the Cincinnati airport, the airport and the community are fighting for air service that a lot of communities are fighting for and by working towards it they want to show these airlines that there is a strong demand for those services. The downturn at the airport has opened up new opportunities at Lunken Field. There, Ultimate Air Shuttle, a charter operator, has launched daily shuttles to business centers with 30- passenger Dornier 328s with all-first-class cabins. Ultimate Air charges a flat rate, with no cancellation fees, and offers free parking and luggage check-in, without TSA screening. Round-trip fares are about $495 to Chicago and $695 to New York and Washington.19 % Change Aircraft % Change A/c Year20 Total Passengers Pax Movements Mov 2007   15,736,220   -­‐   328,059   -­‐   2008   13,630,443   13.4%   285,484   13.0%   2009   10,621,655   22.1%   222,677   22.0%   2010   7,977,588   24.9%   177,597   20.2%   2011   7,034,263   11.8%   161,912   8.8%   Table 1-Statistics for Cincinnati/Northern Kentucky International Airport                                                                                                                 19 Ramsey, Mike, Airline Mergers Leave Airports Off the Radar, 2011-09-28 20  cvgairport.com, Cincinnati/Northern KY International Airport Air Traffic Statistics 2007-2011 Retrieved 2012-01-13.    
  • 14. The Merger of Delta Airlines and Northwest Airlines: Effects of Downturn at Cincinnati  Airport                  14   Figure 1-Average Daily Departure Figures (2003-2010) Figure 2-Employee Numbers (2005 Versus 2010)              
  • 15. The Merger of Delta Airlines and Northwest Airlines: Effects of Downturn at Cincinnati  Airport                  15   Conclusion The merger of Delta and Northwest Airlines has played its part in shaping up the airport to its present condition. The airport and the city also have to take part of the blame for the current situation in Cincinnati. They did not do much to protect themselves and had very few options to count on. The large dependence on a single carrier has led to the current situation. In any merger, one of the smaller hub cities always takes a bigger blow thereby crippling the local economy of a city/state, loss of thousands of direct jobs and business to the region. The federal government should have carefully considered these effects prior to approving the merger or should have laid down a few conditions for the approval of the merger. The airport was primarily affected due to lack of potential air travel demand in the area. The airport needs to start attracting new customers to the airport by offering incentives, services at very negligible rates. Depending on a case-to-case basis, the airports have to enter into a sort of agreement with the operating airlines in order to protect its interest. The area or region has to attract new businesses/customers by offering incentives; it should develop the region into a destination hub for tourists or business activity. When this is being done, we would see a demand for more frequent travel to and from the city. This would make the airlines sit up and take notice of the demand for travel in a particular destination. The rise of corporate aviation in other airports in Cincinnati should act as an incentive for the airport authorities in Northern Kentucky International Airport to start looking out for more ways of revenue generation and ways to increase cost-effective travel options to passengers.
  • 16. The Merger of Delta Airlines and Northwest Airlines: Effects of Downturn at Cincinnati  Airport                  16   References Annual report and comprehensive overview of the company for the past year, Retrieved 2008, February Associated Press, Delta further reduces operations at Cincinnati hub; 840 face layoffs, Cleveland Plain Dealer (cleveland.com), Retrieved 2011-06-02. Bolton, Doug, Airport CEO: Name your price, Delta, Cincinnati Business Courier (bizjournals.com), Retrieved 2011-06-02 Breckenridge, Tom, The Plain Dealer, Northwest-Delta airline merger hurt hubs, including in Cincinnati, 2010-04-25 CBSNews, Feds approve delta-northwest merger, Retrieved 2009, February. Cincinnati/northern Kentucky international airport (cvg). (n.d.). Retrieved from http://www.cincinnati-transit.net/cvg.htmla Cvgairport.com, Cincinnati/Northern KY International Airport Air Traffic Statistics 2007-2011 Retrieved 2012-01-13. Delta airline history, Retrieved 2011, February. George, H., Airline deal may benefit travelers, delta, northwest merger could improve local service, Retrieved (2008, Oct). Kelly Yamanouchi, Cincinnati hub is shrinking, Atlanta Journal-Constitution (ajc.com), Retrieved 02-08-2009 Perotin, Maria .M, Delta launches SkyTeam alliance, 2000-06-23 Pilcher, James, Why CVG lost half of all flights, Cincinnati Enquirer (Cincinnati.com), Retrieved 2011-06-03 Ramsey, Mike, Airline Mergers Leave Airports Off the Radar, 2011-09-28 Trial Brief of the U.S., supra note 5 at 10