And good morning. This is midday on Minnesota Public Radio. I'm Gary eichten. Glad you could join us. Well, this is one of those important days in the news business and today our mid-day. We're going to continue our coverage here on Minnesota Public Radio the two big stories and it's better dominating the news over the noon hour. We'll continue our coverage of the Starr report to Congress and how Congress will likely respond to that report will be hearing from members in Minnesota Congressional. Delegation will be joined by political scientist Stephen sharer for his analysis and comment. That's it noon. This first hour of the program are going to focus on the other big story of the day namely the tentative agreement which would and the Northwest Airlines pilot strike specifically this hour we're going to focus on an aspect of that story that many people say they must be addressed strike or no strike namely the neat as they see it for more competition at Twin Cities International and indeed throughout the region. We would specifically like to hear from those of you who actually work at Northwest Airlines those abusedJobs may depend on Northwest maintaining that dominance here in Minnesota will get to that discussion in just a few minutes. But first of all joining us here in the studio with all the latest on the strike and the possible agreement that's been reached Minnesota public radio's marks. It act like Mark everything. It's important underscore that it is a proposed settlement the pilot to remain on strike right now and they will be on strike until their leadership group call the master executive Council actually acts on the proposed agreement that the pilot negotiators announced yesterday with the airline. The Mac is a 17-member a panel of Pilots has the authority to accept or reject the contract agreement that's been negotiated. We don't know when they're going to meet tomorrow to take that up, but they do say they'll do that tomorrow and we don't know how they're going to react to that. They will consider it too and they will make the final determination as to whether indeed Northwest and it's Pilots have a contract agreement Travelers need to know to theDefy the stars go through and if the MPC does approve the contract it is going to be several days. Well into next week possibly into the next week before anything's resume normal operations at the Twin Cities airport. So the story and in many ways last night, it started a wrap itself up with the announcement of a proposed settlement. Obviously President Clinton sounding very confident that he thinks the strike will end but it's not over yet. Tomorrow's meeting with the pilot liters is an important step that still has to be taken before this is resolved. So first of all check with the the pilots Council tomorrow and see what their decision is in assuming they agreed of the agreement. The next thing for people to do would be to find out when the planes will start flying. Absolutely Blake who's been tracking this story right along now, we will keep you posted of course throughout the day and all weekend long and all the latest developments on the northwest situation. Meanwhile at this hourHow to focus on that issue of Northwest dominance of Twin Cities International for the last month or so we've heard over and over again about the need to bring in other airlines to serve the region, but is that call for additional competition realistic for that matter how would additional competition affect the 18,000 minnesotans to work for Northwest wood Minnesota, ultimately lose more than it games. Those are some of the questions would like to discuss this hour Geoff Hamill executive director. The Metropolitan airports commission is Willis also with us as Northwest Airlines spokesman John Austin, and we invite you to call in with your questions and comments as well. We'd especially like to hear from those of you who work for Northwest Airlines. What would you like to see Northwest market share here in Minnesota. Would you like to see that shrink substantially remain about what is give us a call 227-6023 area number to 276 thousand outside the Twin Cities. You can reach his toll free at 1 800 to 422-828-2276.Alexander one 800-242-2828 as you know, of course this debate has already spilled over to the gubernatorial campaign. Here's what the dfl candidates had to say during their debate on the Minnesota news network this week. Give Northwest doesn't have a monopoly. It's a near-monopoly particularly here at the Minneapolis-Saint Paul International Airport. I think two things to do there. They are building additional gates at MSP and I take those have got to be made available to other Airlines and I think they frankly out to be made available to other Airlines first if it's not a virtual monopoly, it's a near-monopoly that's what I and several other Attorneys General forwarded a letter to the Secretary of Transportation asking that they look at this whole Hub and spoke system. We need to break that up what this Airline needs is a healthy dose of competition. I think it's important that Minnesota have a hub operation Interstate. It's important for the employees. It's important to the traveling public and I think that there's aIn Encino on this political season to make attacks having said that yes, I think that we do need more competition in Monopoly when they control 85% of the gates at the airport in their carrier masaba has a Stranglehold over all of Greater Minnesota's Regional airports. So I would say that a governor should be involved in bringing other major airlines and regional carriers in for competition also making appointments to the Metropolitan airports commission. We're going to look out for the public interest. We are obviously over-reliance on one Airline for a region in a few years. We're going to have the gates together and they're going to be cheap and I think in the future we will have the market fundamentals to be able to deal with are over dominance problem the five dfl candidates for Governor speaking Tuesday night during a debate on the Minnesota news network, Jeff Hammel executive director of the Metropolitan airports commission is with us to talk about this issue. John Austin is come over. He is a spokesman for Northwest Airlines. And again, we invite you to join our Convoy.Station as well, especially those of you who actually work for Northwest Airlines is it real a in Minnesota is interest to reduce Northwest dominance of Twin Cities International to 276 thousand in the Twin City area to 276 thousand outside the Twin Cities one 800-242-2828 with drawstring Mr. Hamel. Thanks for coming in this morning. Thanks. John Austin. Is it in Minnesota is interest to reduce Northwest dominance of Twin Cities international. Well, let's let's talk about that in terms of just getting some facts out on the table. Let's talk for instance in terms of number of employment. You know, there's a statistic thrown around here fairly common way that we have about 80% of the Employments here, but why doesn't get known quite as often as that includes all the people are just passing through when you look at our market share in terms of the people who originated or end their Journeys here. It's actually a lower figure. It's about 65% of the origination and destination Trafficway.Call it starts or ends our trip here. So first artifact setting there, you know that the dominance that people like to talk about probably isn't as big as what most people have in their minds because if you're a traveler going from Hartford to Omaha, you know, you don't really care much if you're passing through Minneapolis, or if you're passing through Detroit or Cincinnati or st. Louis or Chicago or whatever on your way. There's no nonstop way to get there. So those people, you know, we're competing for their business just as we are with you. No other kinds of flow traffic, so it's not quite as Beijing. But yeah, we think that on the whole Northwest adds value to this community in terms of the economic opportunities, we create in terms of the travel opportunities. We create in terms of the job creation. We provide I think the trend in the United States has been for communities looking for airlines operate hubs in their markets not the other way Jeff Hammel would more competition atTwin Cities International be good for Minnesota. Well, I think give for such as yourself question Gary where is more competition going to come from? I mean name and airline, that does not serve Minneapolis-Saint Paul go to the list America West American Continental Delta Frontier Northwest Transworld United US Airways and Vanguard. Also the Minneapolis-Saint Paul market today and people have a choice to fly an 11 or 12 different airline companies. In fact, the only nationally known airline, that does not serve this Market is Southwest Airlines. So there is competition in the market people do have a choice to fly on over a dozen different airline companies. The real issue is why don't those other airline companies establish a stronger presence in our market and that's a decision is being made by each individual airline company does the airports commission seek and want greater competition and better price competition. Absolutely. We wanted a balance system air transportation for Minnesota residents to enjoy a choice of where I who they fly on when they want to go to some point out of the Twin Cities. Absolutely and we spend a great deal of time talking withAll those companies and new start-up companies about new service in the Twin Cities, but it's tough to get people to come to our community come to our town. John Austin if people hear started to aggressive Court other airlines to try to get them to expand our operations here. Would Northwest be happy about that, you know, we want to compete for customers. We wonder if you know. Everybody who wants to fly on us we want to offer Fair competition is a fact of life in this industry. This is a a brutally, competitive industry and competitions going to come whether we like it or not you or just during the last week or so we've seen a new Air Airline decide to start up operations here kiwi is coming into the market. When is that? It's a fact of life has been for the last 20 years and in a week. We're competitors were pretty tough competitors. We want to hang on to our customers. We want to compete for new customers and we do that I think very well but we do it under the rules critics would charge though that the way the game is set up the way the game is operated. That is a practical matter. It's virtually impossible for any Airline, especially the smaller Airlines to the really get a foothold and and expand operations here given given Northwest dominance I'll let you deaf talk to this but you're not as far as I know any Airline who's ever expressed an interest in coming or a real, you know substance of interest income in has been able to start up operations here and then that's because of physical facilities because of the ability to fly in and out of pain aircraft and cruise the biggest barrier to entry in this industry. I think it's probably bad business planning, you know, Gary and some of this is very important 21 that we tried to say often airports commission is never ever. It is 54 years of History denied access to any airline company. Ever in the Minneapolis-Saint Paul Airport, every company that has come to us and said we want a gated Minneapolis or you want more gates at Minneapolis has always been accommodated both the number of gates at they need and the time of day. They wanted to operate we have never denied access to any carrier the truth of the matter. Is it not that many people come to us and ask for additional gates at Minneapolis-Saint Paul and when they do come quite frankly our community has shown I think her reluctance to support someone to service is not use an example that goes back a few years, but Reno air came to the Twin Cities, they offered low discount airfares to the West Coast. They substantial investment in advertising was provided. They started their service Northwest did match their Affairs and in process of matching Fair's Minnesota residents decided to speak with their dollars and the way they did that was it took advantage of the competition Northwest matches the fair instead of the business person or the Leisure traveler buying a fair a ticket on on Reno are five or seven years ago and flying that Airline, they took advantage of the competition bought them. Watching fear on Northwest Airlines and people still bored in Northwest and did not board Reno. Well, we're looking compete for a customer's there's no one riding on the airplane. They've got no choice but to leave the market. So in fact minnesotans vote with their dollars on who they were going to fly with and they in fact drove the competition of the marketplace and that's that's the reality of competition. We can bring companies into the community but it takes minnesotans to get on those airplanes and support those competitors are they can't last in the market now, we heard that from a couple of candidates who said that while we've got some gates that are going to be least here shortly and they're advocating that those Gates be made available to other Airlines gates at the Minneapolis-Saint Paul Airport the entire green Concourse. It's currently available for lease and I've been available for lease for the last couple of years. Northwest was have those Gates on a month-to-month basis while we negotiate a new lease terms and release conditions. We sent letters to 66 airline companies all over the country. Quite frankly around the world asking are you interested in gates at Minneapolis-Saint Paul? We going out and talk with a tear Lane, Is it submitted proposals to them to show them that in fact, we want them to come to the twins is an economic comparisons as to why it would be to their advantage to come to the market is only one airline company that consistently has said we want more gates and that's Northwest Airlines. So you simply artificially say, I'm sorry Northwest there no gates for you were going to preserve a keep these Gates set aside for other carriers and then we'll wait for 3 months 6 months a year 2 years and have them have hundreds of million dollars investment sitting vacant to make sure there's a gate this empty and available when someone has to come to the market or you give it to Northwest who's going to say, we're going to start new service to San Antonio Texas or start a new service to additional service to Houston and we need to get to do what you say. Now. We don't want San Antonio service. We don't want to go to Houston. We want to save this is a vacant gift for someone who may come in the future. I mean, we're going on a bear economics here. We're going to build for more gates between on the year 2001. Jo-Ann's wants all of those Gates only said no will give you a few of them and where they could do to build additional Gates what we are preserving control of a certain gate so that Mac in fat can give them to competitors. If the competitors come we're talking in the shower about to the criticism that we've heard recently that Northwest Airlines has too strong a hold on the Twin Cities. International Market and regional market here and what if anything should be done about that? We would be particularly interested in hearing from those of you who actually work at Northwest Airlines are guess here in the studio. John Austin who is a spokesman for Northwest Airlines Jeff Hammel is with us executive director the Metropolitan airports commission. And if you'd like to join our conversation to 276 thousand Twin City area number 227-6001 cities one 800-242-2828. Lots of complaints in recent weeks about the lack of competition and own lots of suggestions about the things that might be done about that their lack of competition today. We are to take a look at the what in fact could be done. If anything whether this the dominance is really such a bad thing at all to 27 6001. 802-422-8284 Scholars from Duluth GA. Make a comment that I fully support having the dominance In Minnesota. Where in up in the Northland and we have a depressed labor market. I think it's an excellent opportunity for economy. And I'm a vocational counselor by profession and I see both sides my husband to mechanic. We we enjoy living in Duluth that we wouldn't be able to live there if it wasn't for the Hub Northwest for the maintenance facility before you run there. I think one thing for Outsiders is difficult to understand the course of The Machinist or going to be trying to work out a contract with Northwest and if if those talks go anything like the pilot stalks, we're going to hear another round of rhetoric about how evil Northwest Airlines is. Yes. I don't look forward to that. What was the public to make of that? I mean how they hear that and I think many people would draw the Assumption. Well, it's better if they just left home. I think we need to look at the track record. I I I think my personal opinion is that the public has been very reactive. There is a crisis. I am not in agreement that these contracts are all sending you to come to culminates to a crisis point at once. I'm not in agreement, but I think that overall as we look at the path Northwest has done an excellent job of providing jobs and other opportunities that are involved with the community and and I'm just really proud to be part of the organization to my husband. Thank you for your thank you the rhetoric involved in the pilots strike and conceivably what with negotiations coming up. Does that have any long-term impact on your situation here? In Minnesota, or is it a you know, it is it is sort of like watching a family have themselves a fight on the front one and that's not the to make light or diminish the very important issues here. But you know, we have very different issues very strongly held the differences between ourselves and our unions on various various aspects of their country for better or worse than I think on the whole it's better of those issues at least in part get debated in the public forum. I think that in a market in a community where you have as big of a public institution is Northwest, isn't it? It's it's a it's a big force in this community people want to know if they want to know what the issues are. They want to know what the company is trying to accomplish and what is proposing. They want to know what the unions are proposing. You know, I think sometimes the rhetoric gets hard enough that people start to look at the fight more than they do with the issues and I think You know when it's baby time doll take a deep breath and pull back a little bit. But you know, I think in long-term what people really care about is a care about good reliable service they care about being able to go where they want to go when they want to go for a price that they consider to be good value and we think we provide that we think we can always do it better and that's our goal Jeff Hammel. Do you expect that the cries for more competition will Disappear once the rhetoric surrounding these labor talks while I'm at the this whole Cry 4 competition has been a long lasting one for us and we receive these kinds of complaints and calls for the last several years. I think it's hiding by the publicity and the adverse relationship that we saw it with the various labor groups in Northwest so that right now it seems to be at a peak. And of course, this is a campaign that we've got a lot of future Minnesota leader in seeking public office who are our opinion among Our Kind on this issue and so does an awful lot of discussion the regularly and we spend a good deal of time explain to people when they do call us exactly what we do to try to encourage more competition in and seek more service from competing airline companies Bob. You're coming please congratulations. I want to say to the Charleston and Jeff and until all the facts about you and I think they deserve a lot of credit for working their way through this issue a high for 1. Enter be satisfied with that with the service I get to Northwest and from the mack. There's probably a lot of folks right now who want to admit that but I think we should take credit for it. I don't think we can Overlook the importance of Northwest Airlines for economy. The number of employees who have value our community and I want to give them all a lot of credit for that and I also want to just to say that to Jeff animals coming regarding these days are I've been terribly frustrating Attorney General candidates that I'm not sure which party is a role in any of the settlements on this labor dispute and frankly what more could the 80 do To tell Foster competition congratulations and getting back to helping Services. Would you like to see other airlines provide more service out of Twin Cities International? Absolutely. I turn I mean I think we all support competition but let's not lose sight also the fact that the north west end and the other airlines that serve serve the servants here provide provide service. If you were given a choice between buying a similarly priced ticket on Northwest another airline. What would you do the premium? I probably go with Northwest because you know, I like to keep my money here in Minnesota and help my neighbor. Okay. Thanks for coming move on to another caller another caller actually from Duluth, Gary. Hello. Yes, you're on here. I'm a mechanic for Northwest in the Duluth area. And I'm off work competition. My big concern is there has been some talk about state and federal money lending and other airlines for competition which bring Airlines in from outside the the state I figure if you're going to spend state or federal money with might as well leave it in the state and spend it on Northwest people can get lower tickets and we can have better jobs. Let me ask you the same question Gary that I asked there are other caller from the lowest for people who are not who don't work at Northwest and so on and are kind of Outsiders on this looking in these labor disputes the rhetoric very heated and we keep hearing about how awful Northwest Airlines is. The message seems to be from the Union's that gosh. Maybe we should fly somebody else. Well, I don't know if the union saying that the message that comes through it. All I can say is that we can compete with anybody in the world and I'm looking forward to going back to work. Okay. Thanks for your call. Realistically do you folks expect there will be some effort to use State money to try to lure other airlines here to expand our operations. That would be a major shift in policy. The airports commission itself does use some funds to resent that can any packages in proposal to competing Airlines to encourage and make them aware of the benefits of serving the Twin Cities. We talked a lot about Minnesota business and investment international business that we have in this state around the world major leaders and Leadership companies in the Twin Cities and metropolitan area in particular. But as far as being an airline company to come into our community to buy more competition that would be a very very expensive and a very difficult to pass the follow some communities of try that and guaranteed minimum income of minimum Revenue to Airlines for the first year 2 hours of operation. It's a very risky investment and one that has not been very successful in the past. I mean, is it a try that have have seen the airline company come to town serve for the one year of the two-year term of the contract and then leave and virtually leave the city with Larry no long-term investment benefit would Northwest see that as a as a kind of fair proposition know you folks. Nice got size loan from the state. For example to when you were in financial trouble if the state were to offer a similar loan to some other airline to to establish a significant presence here. Would you think that would be a fair approach? Well, let's let's look at what happened in 91 just as down what we really did 291 was an economic development project with the state which produced nearly I guess by 600 jobs in Duluth today and I believe the six $700 jobs up in the range today, you know, and I think that's a good goal of a state is economic development to create job opportunity pickling regions like the range which is at a historically depressed labor market. I think those are desirable than you know, whether it's an airline or taconite mine or a you know, whatever. I think that's it. That's a worthwhile and legitimate use of government money in terms of subsidizing Airlines directly to start service. No, I think that runs counter to what works best which is in a little bit let the free market decide and it says Jeff pointed out that there's no shortage of Airlines serving the Twin Cities already and we we've got a dozen plus Airlines serving the Twin Cities now, there's no there's no I think real barriers to entry here will see other competition earwig be like I said, we seen kiwi announced just this past week. They're coming in Iceland Air has started up service recently. We've seen other carriers announce expansion of service. You know, that's that's how competition is Foster nayfack. Most effectively. We're talking about competition in Northwest. So dominant position at Twin Cities International indeed throughout the region. If you'd like to join our conversation, give us a call to 276 thousands are Twin City area number to 276 thousand outside the Twin Cities one 800-242-2828 again, we would like to hear from those of you who I work for Northwest Airlines get your view on. The call for more competition to perhaps cut into a Northwest Airlines market share here in our region. 227 6001 800-242-2828 will get the smart collars in just a minute. This is Dale Conway inviting you to join me before the dfl gubernatorial debate where all moderates belong in the middle of the road kind of an old-time. BBQ is the idea outside the Fitzgerald theater in st. Paul Sunday, September 13th before the debate. You can eat enjoy live music from The Bourbon Street Boys and gather information about the candidates Sunday September 13th before the dfl gubernatorial debate at the Fitzgerald theater the party starts at 5. And of course make sure you show up for the debate Sunday night 7 over the noon hour today 2nd Armored. Midday program are going to shift our Focus to the Starr report the Congress and the house is now voted to release the report. It should be on the internet this afternoon. We're going to hear from any members of Minnesota Congressional Delegation will hear from President Clinton who spoke this morning a prayer breakfast will hear from a part of the debate this morning on whether to release that report. Stephen sharer will be joining us with his analysis all of that coming up over the noon hour NPR's Main Street radio coverage of Royal issues is supported by the blandin foundation committed to strengthening rural communities through the community leadership program the weather forecast for the state of Minnesota, maybe a shower or thundershower in northern Minnesota and but otherwise sunny and warm specially in the southern half of the state highest today mid-70s Northeast low-90s in the South tonight, maybe some rain in the south and east overnight. Who is low fifties in the North mid-60s in the South tomorrow sunny for the most part with a high 72 the low-80s be Twin City forecast for the for the day sunny and warm with I in the mid-80s 30% chance for a thunderstorm tonight with a low in the low sixties and then tomorrow sunny for the most part with a high right around 80° with chance for rain then on Sunday right now in the Twin Cities. We have a sunny sky and 77° we're talking this hour about the call and you've heard them of the call for more competition in the Twin Cities International the charges that Northwest Airlines as a too much power too much control over the air market and that we need more competition at the Twin Cities International and joining us this hour to talk about that premise Jeff Hammel who is executive director of the Metropolitan airports commission. John Austin is with us from Northwest Airlines as well. Lots of callers on the line if you'd like. Join them. Let me give you the number and why don't you wait just a minute or two till some of our lines clear up. Otherwise, I'll just get frustrated and get a busy signal to 276 thousand one 800-242-2828 bill. Go ahead place. The last color talked about lower tickets as a result of Northwest presents, but I think the studies of showing that that's just not true. Mr. Austin and said, there's no barrier to entry here but I suggest that we won't see kiwi very long hair because of the same facts that mr. Austin pointed out they did with Reno are they would consciously match the prices drive them out of business everybody going to fly north west because they know the name they know they can go to more places and they get the frequent flyer benefits in sympathy to Northwest. They really invested heavily in the community and but on the other hand, they don't that doesn't give him a right to kick out a price on everybody else drive them out of business and then go to the prices that Studies have shown that they make a they charge a higher rate out of their Hub cities are not alone. All the major airlines do it. And then this is Observation I don't have a solution but the hub-and-spoke is it can't be the most efficient but it also allows for the most gouging and certainly the compensation of the executives over at northwest-shoals at thank you sir. John Austin 3 sword issues in there and take them one at a time right. What we did with Reno Aaron what we do with folks who compete with us on prices when match Simone price, I mean that I can't conceive of a more fundamental mechanism of the free market than the ability to match a competitor's price. So what happens then after they leave I mean, you've got you've got this massive capacity people I think are inclined any way to fly Northwest so people go and they fly Northwest the other Airline leaves and then the prices go back up the market exchange and let's let's look at it competitor who comes into a market and sets a price that is not a price that we would choose to sat. We don't think that is a price that you know maximized. Is our economic return in Market, which again is you know, as a for-profit company, we're in the business. Do you know to maximize our stakeholders investment in the company? So we we look at the market and we rationalize say what's the best pricing move relative to the competition to the demand for service in that market and all the other factors and then we make a decision and not surprisingly when someone comes in and sets a price that we may not have chosen to set absent their presence in the market very often. The rational choice is to match them on price we compete on price on service on convenience on the ability to offer frequent flyer programs all across the board when they leave the marketplace the marketplace changes in the level of competition has changed very often with a departure of a competitor the level of demand will change as well will then look at the new market conditions we see in that market and as it affects our entire system. And say Okay. Now what's the most rational pricing Choice there? So very often the pricing does changing it changes literally millions of times a day in our industry. There are pricing changes that reflect all these shifts of demand a lot. But to this second point which is it we have some advantages that other carriers. No admittedly we do. I mean we have collars and Jeff is pointed out a very loyal following in the Twin Cities. We've been in this market for 70-plus years. We have good name identification. We have a frequent flyer program that yields benefits to people in the hub probably more so than any place else we offer nonstop service not only to You know the popular destinations like Chicago and New York and and places like that. But also to the Fargo's into the missoula's and the saskatoon's and we also offer nonstop service to Tokyo and to Amsterdam in the London and to Osaka and Hong Kong all possible because we have we have a hub here and that gives us some advantages and yes, I would you use but on the other hand other carriers have other advantages that we don't many of the low-cost, you know start up here as you come into the market or non-union they pay on average per person lower wages because of that. How can I that gives them a lower cost structure sometimes which opium is an advantage for them? Some of them have you know only one type of airplane, you know you very often you'll see a a start about that. They'll just fly 737 sore justfly dc-9 that gives them an advantage because they don't have to maintain 747s to fly to Asia and JCPenney's to fly to Los Angeles and so on its own every competitor presumably brings their own set of advantages to the marketplace and their own satellite abilities. We have ours we try and and use the advantages we have to compete and we try to to work on our disadvantage but you know, we we compete in the marketplace and matching price. Like I said, I can't think of a more fundamental response in the free market than the ability to compete on price Jeff Hammel Northwest response and not just Northwest but Airlines at the other hubs around the around the country have been accused of predatory pricing. Is that a is there any truth any basis for that charge in all fairness? If you look at the other major you look at Pittsburgh where US Airways is the dominant carrier to look at the Cincinnati where Delta's it down and carry you look at St. Louis where TWA is it down and carry the same arguments were made in each community and every airline company behave. Pretty much the same way and its respective dominant Hub. I would Northwest doesn't Minneapolis and st. Paul is quite frankly. No different than what anyone else does in their own respective hugs around the country predatory pricing is being looked at by the Department of Justice in front of Transportation at the present time Congress is looking at ways to try to even out the playing field a bit and give the new startup low-cost carriers a better opportunity and markets. But the truth of the matter is that that is very large airline companies that have been kind of dependably that dependably there for years and years and years will do what it takes to maintain their market share provide service and then handed a secure and hang onto their passenger mix and that's that's the nature of the business if there is no different than the guy who sells gas station in the gas on the corner and I can put it across the across the street sells gas at a penniless a gallon or more. They thought they bicker back and forth and they'll Johnson with prices when one of them goes out of business the other guy made bump the price back up again. It's a pretty Common Market event and just expand a little bit on the the similarity of hubs. I think if you look at our pricing strategy in the Twin Cities and compared with our pricing strategy in Detroit, which is another large hub for us, you'll find that they're identical and then and if you do what you suggested and look at them Subs around the country, you'll find that you know hubs behave pretty similarly no matter what airline is helping there and to this notion that there is a a huge differential between Hub pricing and other Airline, you know, I don't quite subscribe to that. I will I will concede that there is a difference in Hub pricing vs. Non Hub pricing, but the increment I think is a lot lower than a lot of people believe but on the other side, you know, what's go back and look at all the nonstop service all the economic activity that is generated by a hub in Abyss market for example, you know is I was mentioning has international service to to half a dozen cities in a lots of comprable cities in the country have little or no air service. The reason we have it. International Air Service Road is because we have a hub to bring passengers in from all over the country and funnel them on to those flights. That's the that's an economic been. I think the department of trade and economic development estimate each International route as a hundred fifty million dollars in economic value to the community that hosts it now that's that's a lot of money that comes into this community because that Hub exists to support that route back to the phones are Angela's online. Go ahead Place Airlines do the same kind of grumbling and my opinion would be that they do and I think I would like to say I have worked for Northwest. And I hope we stay I hope we stay big and I hope we grow because I think that we've brought we transferred here from another office from Baltimore and I think that we fight alot to Minnesota and living in Minnesota has enriched our life or life. We live in a way that we could not have in Maryland and I guess that's really all I want to say, but I think that people really just needs to be aware that this is not my choice is not the only airline that has seems to have a monopoly is too small cities. There are a lot of small cities in the Upper Midwest and I don't think that the people who live there necessarily realize that it's a lot of them have lived that way their whole lives there for a couple of generations and and so they they think that everybody was like that and not everybody does their they're actually lucky to have airports in cities with populations of 5,000 10,000 people. I doubt it either Colorado from Grand Rapids, David. David going to place. Okay. Well, first of all and Grand Rapids on masaba now, I'm afraid employee, but I fly Northwest a lot and but I'm stuck with the the price from asaba in order to get a decent price. I have to go to North and I'll fly to 22 Northwest to be on in the other parts of the world so to speak so I'm kind of in a disadvantage there. I have no competition here to get to Minneapolis without going making masaba Northwest Connection in the price thing. As far as the competition is concerned, you know competition is is great except if Northwest was in the top 5 and all our certificates baggage handling a landing time take off time still on for work, but they're not pricing is one competition kind of conversation. What is a different competition now if Northwest was in the top three then I could care less about competition cuz I know I have one of the best airlines in the country serving the click it or nice, but they're not so Mike has his let's bring in a better airline that is in the top three for that competition for Northwest can improve on their stuff. So no competition for the price is immaterial far as I'm concerned the service would be the ideal situation Stella safe. I don't necessarily want, because I have the one of the top airlines in the country Jeff Hammel. Is it realistic to think about the another a second Airline establishing a hub of operation here? It is not we've looked at that quite friendly. We think that we are and I don't want to sound pro Northwest chair because I'm trying to be as neutral as I can. But the truth is that were fortunate that we have Northwest Airlines based in Minneapolis Saint Paul to think that we can secure another carrier to establish itself. This Market as we experience back when the days with Republic Airlines before the Northwest Republic merger is very unrealistic and to think that other large carriers that are one of the top two or three or four ring companies will come to Minnesota and then provide additional service to smaller communities is even more unrealistic. We enjoy 129 non-stop departure points out of Minneapolis-Saint Paul. If you look at other airports on the country with two and a half million metropolitan area population or a total state population about for four and a quarter million people you are not going to find another Community with the level of service that we have from this from this airport. Now, that's only because Northwest Airlines by virtue of Faith than the long history has established itself in Minneapolis-Saint Paul is this world headquarters and is a major operating Hub has been successful Minneapolis is a very lucrative market for Northwest Airlines has a very good Market to Market that serves a company and the company has served the community over a very long history has John found out a few minutes ago, but that we are not going to see a new Carrier coming to this market and compete with Northwest and it's not supposed to wear to leave this Market. This is a very important point at Northwest were to disappear a bankruptcy or just pack up his bags and moved we would not see another major company come in here as a new major Hub Minneapolis st. Paul with them become the end of the line. I spoke out of Chicago or a Spoke out of St. Louis for a Spoke out of some other community because they don't have the population density of the draw. Did you typically find cities that do that do host is Hub operation for major carriers, John Austin's a little bit off the subject but not entirely to call it raises the issue. I wouldn't be so bad that you you folks Supply such a dominant position here if the service was better. Well that's playing plane rides. And you know, I think all of the listeners who have flown with us in the last couple of months, maybe the last year even have probably not given gotten the level of service that we want to provide and then in fact Provided through most of this decade, you know 1990 to 96. We were the number one on timer line among the seven largest. We were at the top of the charts in terms of customer complaints. We were I think probably pretty much the middle of the pack in terms of our luggage handling but working hard on improving and and quite frankly we have fallen off of that Mark in the last year or so, but we know that we're working real hard to get back to it and I think we will get back to it. I think a lot of what we've even done already so far as it's been a little bit of scared by what's going on on our labor front that's going to work itself through and and we will deliver the kind of service at the caller has a right to expect but just to go back to a point of Grand Rapids, if one of the other Airlines and then you know as as we pointed out all the major airlines accept Southwest serve this Market already got it into their heads that they wanted to start service to Grand Rapids. Far as I know there's not a single obstacle to them doing it. In fact, if you look at other airports other communities around the state you seen in Rochester Inn in Duluth. American has picked up some service. I believe in both of those cities as well. But the fact of the matter is is it one of the trade-offs of living in a town like Grand Rapids Marine. Are you get a lot of quality of life benefits. One of the other things is that you don't get the same level of their service. You're going to get in in a Minneapolis-Saint Paul or in Chicago or whatever like that and that's that does restrict your choices sometimes but on the other hand somebody lives in Grand Rapids is literally one plane stop away from Tokyo or Amsterdam or yeah just nearly as as just that 120 + places around the world and that's because a hub airline in this case Northwest. Has the economic structure to provide, you know, how much flight several flights daily from Grand Rapids to the Twin Cities and then several flights to be on points. John Austin is with us. The spokesman for Northwest Airlines. Jeff Hammel is here executive director of the Metropolitan airports commission this first our mid-day were talking about Northwest dominant position at Twin Cities International been lots of calls recently for more competition break up the Yankees they say and so we thought this hour would be interesting to find out the weather. In fact that's desirable possible. And if you like John our conversation specially those of you who actually work at North Northwest like to hear from you 227 6001. 800-242-2828 Brian go ahead. Hey, thanks for taking my call. I am up a former employee of Northwest Airlines and I did work out at the Minneapolis International Derek and my my first point that I'd like to make his first customer. Since before I get to the competition is that happy employees make for happy customers and you know, if we can settle these labor disputes, I think once your employees are happy, you'll see your your customer complaints fall fall through the floor. My point that I'd like to address is the the discussions that we're going on for building a new facility a completely new facility in a totally different location. And I guess as an employee, he one of the one of the many complaints that we received out at the airport was in regards to competition with the airline and I was surprised that the the citizens of the community a kind of let that slip away kind of as that would have certainly drawn some some competition in the market, but then I would think perhaps demographics wouldn't have supported it. Result of the 1989 airport planning act to take a look at examining future the future of Aviation needs in Minnesota. And we looked at were two proposals one expand the current airport location to meet future needs for the year 2020 or billion trillion new Greenfield airport location down in Dakota County the legislature in April of 1996 decided to keep the airport where it is and statistics and Analysis and study determined that in fact the airport could support and sustain the growth that was projected for the next 20 years or so. The new airport was a 5 billion dollar proposition. It was one that I think that most people did not support the Minnesota Legislature was the part of that made that decision and today what you see at the airport as a result of that decision as it's kind of ketchup development and growth of the airport and preparation for the for future demand 1.7 billion dollar program underway to be completed between now and the year 2010 new parking facilities Concourse expansions terminal improvements new Runway a expansions and self-worth to make Airport competitive safe and fully operational and meet the Minnesota Travelers needs for the future critics would say while you folks just caved in to let the politicians caved in the Northwest Airlines Northwest was not interested in having a new Airline belt or airport built rather because they have all their facilities are right here and everybody caved in the Northwest Fair charge. I don't think so. I mean we have 400 elected officials at the legislature were part of this decision making process and wild lobbying and educating legislators on your various points of view are important. To be honest with you. We were we were the legislature isn't as a public agency describing both options and trying to be as bouncing as Fair as we could. I believe it was our lands was there as well other interested parties expressing their interests and opinion, but when it comes time to vote and when they when the legislators in the state of Minnesota, I had to raise their hand to say yay or nay thay resignedly voted to keep the airport where it is for a lot of reasons economic benefit ease and comfort. Getting to and from the airport in the fact that I stood our studies show that the airport could meet the needs of the community for the next 20 years. Not a lot of time left to let's get a couple more callers on here John. Go ahead take my call. The gentleman that talks about the labor disputes and whatnot. So basically via the two years has taken so far to come up with this agreement has put a lot of stress on some of the family's the mechanics machine is the flight attendants and that the pilot organization and if if that had been handled in a faster manner, I think a lot of the labor disputes in the on-time performance of the baggage handling problems would have been taken care of And I need notarized here in Duluth. I know that will be expecting American Eagle service center on the 23rd of this month. Then I know a lot of people are definitely happy to see that service coming. Basically because I'll be going through Chicago the largest hubs they can get some other service. A lot of people they do they do like Northwest because they do have a monopoly on the organization but a lot of people don't understand is that the one labor dispute problems happen the the public they do, of course you get the interruption in your service. And as soon as our service is interrupted when they ask why but as soon as service is re-established than your problems go away and they tend to forget about the what's happening John Austin. Do you think things will get back to normal. Quickly and you are in your view wind everybody's going to forgive and forget. Well, I think we've definitely lost some customers someone we've lost forever and we're going to feel that affect and where and we're really You know, we're sorry not only obviously for the the hard-headed business reasons, but we're sorry because you know, as a member of the community we want to be well-regarded like anybody and we want the people to patronizes but we will work real hard to get people's business back will work real hard to get our rankings back. I agree with the the collars both of the last two colors, you know in a service industry like ours, you know, your people have to be they have to be happy. They have to feel fully engaged with serving the customer in a we haven't had the we haven't done that very well in the last year. We are going to do it better and going forward. I think people will see did Northwest that historically over this decade you seen as a top performer Constance your comment Place Northwest Airlines and 14 or never have been and I think maybe I can I have a point of view. That's a somewhat less my Involved in this process. I think as people have pointed out everyone is tangentially affecting only by the strike but also by Northwest presents. I have a neighbor who bought a house for my parents Northwest mechanic. I have a client who is a travel agent and I had a friend who was coming out from New York that had great difficulty getting here because of the strike and I'm also holding a ticket that I had to put off which is fine. I think John Austin's comment about Northwest and Natalie Northwest but this whole community mean a family is really significant and reflective on how I feel I think that instead of looking at what's wrong which we seem to have kind of us a penchant for Sociologically these days we immediately go to what's wrong. I mean, this is not like there's been a mass murderer. I think this is a family situation and I think that I think the reason there is loyalty toward towards Northwest on the part of most people including myself. The reason I'm willing to say, it's okay. I wasn't convinced mom and my brother or dad and my sister had a fight so we don't get to go to the picnic is because there's mutuality there are many many many many benefits for us and having Northwest here then they don't have to be perfect and we know that because we are, you know, we are family and I would suggest that everything is going exactly where it's supposed to take the pilots needed to strike because they clearly were very unhappy. There was some deep-seated resentment. I don't want to get an appointment with an unhappy pilot. Well satisfied customer and will work hard to keep her that way couple of quick questions. John Austin before we run the back and they put my news hair on here very briefly. If the pilots executive Council approves the agreement. When will you be back to full service the executive Council of the pilots Union? I understand we'll meet tomorrow to consider this. It is unclear to me if they're going to ratify the agreement at that level or if they're going to submit it to their membership in the 6100 Pilots around the country for their ratification as well. So the answer to that question, which is probably be questioned operationally depends a little bit on what they want to do with that and can we expect to get another strike here from the mechanics or the flight attendants. Nobody wins? Do you know Constance Wu entire life was touched by the striker? You could talk to the folks who run the picket line or the folks who were behind the counters helping customers. It's not a positive. So I hope not but I'm not so good at predicting the future. Thank you. Gentlemen, appreciate your coming in today on Austin a spokesman for Northwest Airlines Jeff Hammel. John Ducey is the executive director of the Metropolitan airports commission has forced our midday focused on the call for competition at Twin Cities International charges that Northwest is too dominant. That's what cities are in Nashville. News headlines are coming up next.