MSP officials wanted more from Delta. Here's how they got it.

A few years ago, Minneapolis-St. Paul International Airport leaders traveled to Atlanta to meet with Delta Air Lines executives at the carrier's headquarters.

MSP is Delta's second-largest hub. Yet the airline — which dominates the Twin Cities market — was investing millions of dollars into other airports that handled fewer Delta flights.

"We said, 'We think it's time for some serious investment in Minneapolis,'" said Brian Ryks, chief executive of the Metropolitan Airports Commission, which operates MSP. "After seeing what they had done in Seattle, New York, [Los Angeles] and Salt Lake City, they agreed. I think it was just a matter of them getting around to it."

Since that conversation, Delta has committed more than $100 million for infrastructure upgrades at MSP. The airline also has added 22 routes, including several suspended during the pandemic, 10 new domestic flights and some international destinations.

Delta admitted its investment in Minnesota was a little overdue.

"Coming from the pandemic, we've looked to invest across the United States, but I think we've been a little bit under-invested in Minneapolis, given where we are," said David Hart, the managing director for domestic network planning at Delta Air Lines. "Now, we're looking to change that."

By refocusing its commitment to Minnesota, Delta says it is maintaining the airport's reputation as a world-class hub. Critics have long pointed to Delta's dominance in the Twin Cities as a reason for higher airfares. Others have attributed some of those high airfares to MSP's robust base of business travelers, who tend to pay premium prices.

Given the measurable economic impact a strong international airport has on a city and region, Minnesota is left rooting for the airline's success.

A revised view of MSP

"MSP has been a critical component of our route network, dating all the way back to Northwest Airlines," Hart said. "It will always be that."

The legacy of Northwest Airlines' brand and footprint — both in physical assets and its employee base — has kept Delta's tether to MSP.

Northwest Airlines, which began in St. Paul in the 1920s as a U.S. mail carrier, grew into an major international airline from its headquarters in Eagan. When Northwest merged with Delta in 2008 in a $17.7 billion deal, Delta took its place as the dominant carrier at MSP.

Delta phased out the Northwest name until the Minnesota-based airline fully ceased operations in 2010.

After its merger with Northwest, however, Delta didn't make much of an investment at MSP, analysts said.

The company spent money to improve the appearance of gates, invested in self-service technologies such as kiosks and improved baggage systems.

But now, Delta is spending money to transform MSP into much more of a world-class airport to maintain a global reputation, not just for passengers connecting through MSP, but those traveling from the airport in Minnesota.

"It's very important for an airline to have a reasonable degree of consistency in the features, capabilities and amenities that are offered at all of its hubs," said Henry Harteveldt, a travel industry analyst at Atmosphere Research Group. "You don't want a savvy Delta flyer to say, 'Oh, I'm going to avoid flying through a particular hub' because it doesn't offer the comforts or the same level of technology or anything else they would find at other hubs. Delta doesn't want MSP to appear in any way to be deficient in the eyes of its customers."

Despite the underinvestment from Delta, MSP is outperforming its hub peers, and has been for years. One of the top 20 busiest airports on the continent, MSP this year was named the best airport in North America for the third consecutive year by Airports Council International for the 25 million to 40 million annual passenger category. MSP has won the award in seven of the past eight years.

That's despite Delta operating at 94% of what it did at MSP in 2019, Ryks said. COVID-19, economics and more hybrid corporate meetings have all played a role, he said. Delta also has cut the number of people it employs in the state. As of May, Delta employed 7,306 people in Minnesota. In 2015, the carrier had 9,700 local workers.

MSP is more self-reliant than other Delta hubs, so the airline's investment "probably wasn't as high as a focus strategically for Delta as those other airports," Ryks said.

Investing in passengers

In the first three months of this year, Delta saw a 7% increase in the number of passengers flying out of MSP when compared to the same quarter in 2023.

"That's more than any of our other core hubs," Hart said. As a result, Delta's flights at MSP this summer had 7% more seats.

"That's two more [percentage] points than our domestic average," Hart said.

To accommodate demand, Delta is putting more large aircraft — equipped with all the classes of service — into MSP. The MAC is investing $6.5 million to reconfigure gate and ramp space in Concourses B and C to accommodate those larger Delta planes.

To remain competitive at MSP, Delta has had to add more leisure destinations, as well as more routes for business travelers. By investing in Minneapolis, Delta is not only elevating the hubs' experience to the level of its other hubs, it's showcasing MSP to corporate travel managers by saying "you should route your travelers through MSP and not Chicago," Harteveldt said.

Business travel has been Delta's fastest-growing segment over the past year, Hart said.

"It is an increasing competitive environment, especially in the leisure space," Hart said. "We feel really good about the value proposition that we have to offer to the customers.

'A blessing and a curse'

There are cautionary tales of airports that relied too much on a single carrier.

Prior to its merger with Delta, Northwest had roughly 80% of the market share at Memphis International Airport, but in 2013, Delta announced it would scale down from 300 daily flights that Northwest flew to 60 flights a day.

Cincinnati/Northern Kentucky International Airport saw cutbacks following Delta's filing for bankruptcy in 2005. In the years that followed, Delta decided to invest in Detroit, not Cincinnati, resulting in lost routes, hundreds of eliminated jobs and lost revenue from fewer passengers and planes.

"I'm sure every day the leaders at MSP wake up wondering 'How's everything with Delta?,'" Harteveldt said.

In 2023, Delta and its regional affiliates accounted for 23.7 million of the 34.7 million passengers that flew through the airport, or 68% of all passengers. In 2023 and 2022, Delta's operations at MSP accounted for 57% and 62% of total MSP revenue, respectively.

"It's both a blessing and a curse," Harteveldt said. "You get a large reliable airline with more destinations than the market can support on its own. The airline becomes a great economic driver. It helps retain businesses. The negative is, if the airport wants to do something and the dominant carrier doesn't like it, it may have the ability to affect that decision, modifying or killing the plan altogether."

The Twin Cities has become heavily reliant on Delta's presence at MSP, which include 142 nonstop destinations. Local tourism and economic development agencies use Delta's name in sales pitches and marketing campaigns to attract new businesses and win bids for conventions and events.

"The airport functions as the entryway for our entire region and state," said Peter Frosch, chief executive of Greater MSP, a nonprofit directing the region's economic development strategy. A large carrier like Delta offering numerous domestic and international nonstop flights "is a significant advantage for us to retain and attract companies and employers to this region", Frosch said.

Fortunately for MSP, a conversation three or fours ago set up Delta to prop up the airport for the next several years.

"It's been a good, strong business market for them," Ryks said "We have a diverse economy, [and] our median household income is in a good place when you compare it to other areas of the country. It's a good story for Delta and it just solidifies our market and solidifies their investment in this market."