Seat 2B By Joe Brancatelli
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Delta's Failed, Anti-American Foreign Policy
February 11, 2016 -- Like professional athletes and mafia dons, airline chief executive rarely go out on their own terms. During the last year, Skygods were unceremoniously ousted for suspected corruption (Jeff Smisek at United Airlines) and proven incompetence (David Siegel at Frontier Airlines). Bosses also got the push when security analysts bitched about profit margins (Dave Barger at JetBlue Airways) and boards demanded more strategic thinking (Ben Baldanza at Spirit Airlines). Then there's Richard Anderson, master of all he surveys at Delta Air Lines. The carrier announced last week that he'll vacate the big chair in May, voluntarily walking away from the world's most profitable, punctual and productive airline at the zenith of his personal power and prestige. It's not even the first time the 60-year-old Anderson has washed his hands of airlines. In 2001, he succeeded the much-despised John Dasburg as chief executive of Northwest Airlines. He left three years later for a health-care gig and only returned to commercial aviation when Delta offered him control in 2007. In 2008, Anderson merged Northwest and Delta. He built a strong management team, made peace with labor, improved reliability, tarted up the in-flight product, pounded capacity into key markets like New York and Los Angeles, expanded in London, and repurposed an old Northwest trick. Instead of buying high-priced new aircraft, he followed the Northwest policy of keeping older planes flying. Unlike Northwest, however, which had a reputation for sporadic maintenance and slovenly in-flight cabins, Anderson made sure Delta kept the planes in tip-top condition. The result? An airline lapping the field in virtually any financial or consumer-satisfaction measure you can cite. Frequent flyers expecting reciprocal loyalty from Delta won't miss Anderson — his management team is devaluing SkyMiles at an alarming pace— but the rest of the industry understands the transformational nature of his stewardship. Anderson will even survive the smarmy praise heaped upon him by U.S. Sen. Johnny Isakson, a Georgia Republican, who conveniently counts Delta Air Lines as one of his top-five contributors. But one thing Anderson — or at least his reputation — may not survive is his naked aggression and partisan thuggery in the field of foreign policy. Surprised that an airline in the 21st century even has its own foreign policy? You haven't been following Delta and Anderson closely enough and you've missed his ham-fisted attempts to bend U.S. policy to Delta's will and financial self-interest. Consider, for example, Anderson's campaign against the Export-Import Bank. Anderson poured millions into lobbying to shut down the 82-year-old U.S. credit agency and did so for only one reason: Since he was running Delta with an endless stream of older aircraft, he saw no reason for international competitors to get discounts on loans to purchase American-made Boeing jets. Anderson couched his complaints in more patriotic terms, of course, but his grievance against the Ex-Im stemmed solely and completely from Delta's own financial interests. Anderson was even more reckless in his battle with the Big Three Gulf carriers. He filled the airwaves with invective, half-baked statistics and ethnic innuendo. He apologized for the nastiest assertion, but hardly anyone took the mea culpa seriously. And he never once considered that U.S. national interests in the Middle East are inextricably tied to the governments in Qatar and the United Arab Emirates. Besides, Anderson's shouts of "Subsidy!" hurled at the Gulf Carriers rang especially hollow when you examine Delta's actions. It shares the SkyTeam Alliance with Saudia, wholly owned by the government of Saudi Arabia. Also in SkyTeam and a Delta code-share partner? Alitalia. That hapless carrier has been repeatedly bailed out by Italian taxpayers and is now 49 percent owned by Etihad of Abu Dhabi, one of the Gulf Carriers whose policies Anderson claims to find so repulsive. Several other SkyTeam partners are also de jure or de facto subsidiaries of their nation's government and Anderson doesn't have any gripe with them. Anderson also had no problem with the equity investment he made on Delta's behalf in China Eastern. Yet China Eastern is the carrier most frequently and lavishly subsidized by the Chinese government. Since Anderson wants access to China Eastern's Shanghai hub and the vast Chinese market beyond, however, he's uttered not a peep against Chinese subsidies. Anderson isn't going quietly into that corporate good night, either. In recent weeks, he's attempted to throw a spanner into delicate U.S.-Japanese negotiations for more access to Tokyo Haneda, the closest airport to the Japanese capital. Delta inherited Northwest's Asia hub at Narita Airport, an unpleasant facility that is also an hour or more by train from the heart of Tokyo. Delta has been slashing capacity at Narita for years, partially because business traffic to Japan has slowed and partially because Delta has grown nonstops to Asia from its new Seattle-Tacoma hub. U.S. carrier access to Haneda has been difficult due to Japanese protectionism. A tranche of Haneda slots granted to U.S. airlines several years ago was saddled with sub-optimal take-off and landing times. In fact, Delta huffily abandoned its route between Seattle and Haneda last year when the U.S. government demanded it fly every day. Delta claimed the government's requirement to fly daily was "draconian." Then when American Airlines inherited the slots and announced Los Angeles flights — a route that competes with Delta's LAX-Haneda service — Delta demanded the U.S. government block American. Delta has responded with equal pique and piggishness to the news that U.S. and Japanese negotiators are working to further liberalize Haneda access. Anderson has demanded the right to relocate Delta's Narita hub to Haneda, a move that would consume all of the new slots and lock out competitors. Delta has even bullied Minnesota politicians by claiming it would drop its Minneapolis-Narita flights if it doesn't get its way on Haneda. As with the Ex-Im bank tussle and the mud fight with the Gulf Carriers, Delta is likely to lose the Haneda battle. The Japanese hate Delta's public grandstanding. Minnesota politicians will eventually realize that blindly going to bat for Anderson — who bailed on the pledge to keep Northwest's headquarters in Minneapolis — is a losing game. Delta has even parted ways with its fellow carriers, quitting the industry trade group. Will any of this hurt Delta and tarnish Anderson's legacy? Watch this space. But one thing is sure: Anderson's go-it-alone foreign policy hasn't helped Delta so far.
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