Delta exec takes reins of subsidiary — Northwest

Delta Air Lines’ president and head of its new Northwest subsidiary, Ed Bastian, flew to Minneapolis on Thursday to meet with employees from Northwest, saying his first priority will be spending time with them now that the two carriers have merged.

“The Northwest employees, I understand their concerns. There’s a lot of apprehension,” he said. “Anytime your airline loses its identity, it’s disarming.”

Delta is no stranger to that apprehension, after fighting off a 2006 attempt by US Airways to acquire Delta.

“We know that we felt that here in Atlanta,” Bastian said. “And we realize how painful that would have been if that outcome had came about. So there’s an element of mourning and loss of the identity.”

Bastian, who has been president and chief financial officer of Delta and is now also chief executive and president of Delta’s NWA Inc., subsidiary, said a new chief financial officer will be named next week, along with other executives. Bastian will remain president of Delta.

Delta has been waiting for the opportunity to meet with the Northwest employees it is taking in under its wing.

Over the six months since Delta announced the merger up until it closed the deal Wednesday, “We were pretty limited with respect to our ability to access those employees directly. So fears built up during that time frame,” Bastian said Thursday. Now, “we can go and address those fears directly.”

Though Delta has pledged not to lay off any front-line employees as a result of the merger, it expects to cut as many as 1,000 employees, including at Delta’s headquarters in Atlanta and Northwest’s headquarters in Eagan, Minn.

“You’re not going to see any significant reduction in jobs or headcount here in Atlanta, frankly, because we have a lot of work to do over the next two years as we integrate the two companies,” Bastian said. “Eventually, you’ll see some reductions across the two companies, but it’s pretty far down the road, and I would expect we’re going to manage it through attrition and other types of early-out arrangements. I would not expect any large-scale layoffs at all.”

Bastian said he will be spending almost all of his time in Minnesota for the next two years.

“It was really important, we felt, to have a Delta leader on the ground in the Twin Cities,” he said. “They need the leadership and they need the direction. And they need the on-site visibility of Delta. So I volunteered for the role. I’m looking forward to it.”

Not everyone was looking forward to Delta’s arrival.

The International Association of Machinists, which represents about 12,500 Northwest employees, issued a statement after the Department of Justice approved the merger saying, “The days when Delta could ride roughshod over their employees is coming to an end.” Northwest is highly unionized, while Delta’s pilots are the only large group of unionized employees, and the machinists union along with others wants to unionize more employees at the combined airline.

Though Delta is acquiring Northwest in the merger, Northwest is seen as stronger in some areas compared with Delta.

“Northwest is an airline that, situated in the Midwest, in the heartland of the country, has had to work hard to eke out its existence,” Bastian said. “It doesn’t have operations in any large financial centers.”

It’s is a “very, very competitive airline,” Bastian said. “I think some of that competitiveness and that spark and spunk that Northwest brings is going to be a really important feature to add to the Delta service here.”

He also said Northwest operates very efficiently, even in harsh conditions. “That’s something where there’s a lot for us to learn,” Bastian said. Northwest has hubs in Minneapolis/St.Paul, Detroit and Memphis, while Delta has hubs in Atlanta, Salt Lake City, Cincinnati, and New York.

Northwest, which started as Northwest Airways in 1926, has a “proud heritage,” Bastian said. “They’ve had some of the pioneers in the aviation industry.”