Delta to Consolidate Feeder Airport Functions

ATLANTA -- Seeking to provide a more consistent airport customer service experience across its company, Delta Air Lines Inc., plans to consolidate some functions of the three regional feeder carriers it owns.

The plan, which is expected to be fully operational by the third quarter, could result in a net reduction of a "handful" of jobs, Delta spokesman Anthony Black said Wednesday.

Roughly 4,100 airport customer services employees -- ticket counter representatives, gate agents and baggage handlers -- from Comair, Mesaba, and Compass will be consolidated under a new subsidiary called Regional Handling Services, according to memos sent to employees.

Many of the functions are located in roughly 100 primarily small- and medium-sized airports.

Pilots, flight attendants and mechanics of the regional carriers Delta owns will continue to operate under the auspices of their respective airlines, which will still be overseen by Delta Connection, Black said. Each regional airline will continue to be based at its respective headquarters.

The goal of the consolidation is to match the airport customer experience provided by the three regional carriers to that of mainline Delta.

Comair, in particular, has struggled with on-time performance and baggage handling relative to the industry. According to the Department of Transportation, Comair had the worst on-time performance in December among the 19 carriers the agency surveyed.

Delta's new RHS team will be headquartered alongside Delta Connection in Minneapolis and will be led by Comair's Don Stephens. Besides the three regional carriers it owns, Delta has contracts with six other regional carriers that provide primarily domestic connecting service to its passengers.

"RHS will work with Delta and the Delta Connection carriers to develop product and performance standards across all elements of the airport experience, streamline handling procedures and training, and establish a consistent station performance management and quality assurance program," Don Bornhorst, senior vice president of Delta Connection, said in a memo to employees.

Black said the consolidation will result in efficiencies that will contribute to the $2 billion in annual revenue enhancements and cost savings Delta has said it expects to eventually reap from its 2008 acquisition of Northwest Airlines, which called for the combined carrier to be based in Atlanta.

Delta decided to move its Delta Connection headquarters to Minneapolis as part of its agreement with the state of Minnesota to get out of Northwest's promise to keep its headquarters there. The deal requires Delta to keep 10,000 jobs in Minnesota, including Northwest's flight simulator operation and two phone reservation centers. Without that deal, the Metropolitan Airports Commission could have required early repayment of $245 million from debt it issued on Northwest's behalf in the early 1990s.

Delta also is moving Compass' headquarters to Minneapolis. The new RHS unit will bring more jobs to Minnesota, helping Delta meet its obligations under the agreement with the state of Minnesota, Delta spokeswoman Betsy Talton said.

Bornhorst said there is minimal overlap of the Comair and Mesaba ground handling networks, so officials anticipate no involuntary frontline reductions for employees of Comair and Mesaba as a result of the creation of RHS.

Black said any staffing adjustments are expected to be managed through attrition and voluntary severance programs.

There are more than 10,000 total employees at Comair, Mesaba and Compass. Together with Delta and Northwest, the combined carriers have about 85,000 employees.

Delta bought Comair in 2000. It inherited Mesaba and Compass when it bought Northwest.

In afternoon trading, Delta shares fell 63 cents, or 9.2 percent, to $6.21.

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