Atlanta-based Delta Air Lines was emerging from Chapter 11 bankruptcy and was poised to file its plan of reorganization with the U.S. Bankruptcy Court when rival US Airways announced a hostile bid in November of 2006. Delta hired Ketchum to oversee a nationwide communications campaign to convince Washington policymakers—and ultimately Delta’s creditors—that a US Airways-Delta merger wouldn’t “fly.”
Ketchum executed a national campaign that recruited more than 100,000 online advocates in support of Delta and mobilized a coalition of hundreds of federal, state and local elected officials and community and business leaders who publicly rejected the US Airways bid. In January of 2007, in part because of Delta’s successful community mobilization US Airways dropped its hostile bid after learning that Delta’s creditors had voiced their support Delta’s reorganization plan.
Since Delta Air Lines filed for bankruptcy protection in September 2005, the company and its employees had made tremendous progress in turning the airline around and transforming it into a strong, profitable carrier. The company was on course to file its plan of reorganization with the U.S. Bankruptcy Court when the unexpected and unwelcome bid came from US Airways. With the US Airways bid on the table, Delta had to persuade its creditors to reject US Airways’ proposal and support Delta’s efforts to emerge from bankruptcy alone.
At the time, US Airways made the claim—echoed by media and financial analysts—that the merger held significant financial benefits and was a necessary step toward airline consolidation. Delta hired Ketchum’s public affairs practice to direct and coordinate a nationwide, multi-faceted communications campaign that could shift the focus of the debate by focusing on reasons the bid was anti-consumer, anti-competitive and incapable of passing regulatory scrutiny.
But before Delta could voice its opposition publicly, the company’s board had to approve its decision, which meant Delta remained relatively silent for several weeks while US Airways controlled the initial debate. In the meantime, the communications team conducted in-depth research into the likely impact of the merger and in particular whether it would raise significant anti-trust issues.
Delta commissioned detailed, state-specific analyses of the negative impact US Airways’ proposal would have on customers and communities across the country. The results supported Delta’s position that the merger would be anti-competitive—increasing fares, reducing choices and limiting service—and was therefore not likely be cleared by the U.S. Department of Justice.
The analysis also indicates that several states and congressional districts would suffer from reduced service or choice as a result of the merger, and therefore helped the team decide where to focus its outreach efforts.
At the same time, Delta’s qualitative analyses of several key audiences—particularly Delta employees, retirees, pilots union and frequent flyers—revealed overwhelming support for the company’s efforts to remain independent. In fact, Delta’s employees and pilots union had already begun to organize their own opposition to US Airways and were willing to coordinate their efforts for maximum impact.
The resulting communications effort had several interlinked objectives: to stop US Airways’ hostile takeover bid; to convince policymakers that US Airways’ proposal was structurally flawed, with significant negative consequences for Delta employees and retirees, frequent flyers, consumers and communities nationwide; and to create substantial doubt in the eyes of Delta’s creditors about the feasibility of a US Airways-Delta merger and likelihood of it gaining regulatory approval.
While the Delta creditors committee would be the ultimate decision-maker on the merger, it was not the direct target of the campaign. Ketchum instead identified influential individuals who would change the discussion from a business page story about mergers and acquisitions to a front page story about the survival of an airline.
Delta employees, retirees and frequent flyers were eager to help and as constituents of federal elected officials in key committees, could voice their opposition through e-petition signatures and letters. State and local elected officials and community leaders in states that would be most impacted by the merger also had a stake in keeping Delta independent and were key to the team’s efforts to broaden and deepen local support and generate local media. And Washington policymakers—particularly those on the Senate commerce and judiciary committees and within the Departments of Justice and Transportation—would be influenced by their constituents. The louder the grassroots and grasstops voices, the more likely these policymakers would be to publicly oppose the US Airways bid.
Therefore, the communications strategy was to shift the “airline merger” debate to Delta’s terms, focusing on the harmful effects on employees, communities and the flying public rather than on the financial and consolidation benefits, and to mobilize an army of supporters to oppose the merger publicly and ensure that policymakers saw, read and heard Delta’s side of the story.
The Ketchum team developed a campaign based on the Delta employee-created tagline, “Keep Delta My Delta,” and launched it nationwide on December 19, 2006, the same day the airline filed its plan of reorganization with the U.S. Bankruptcy Court and officially rejected US Airways’ unsolicited merger proposal.
The PR team created an interactive Web site, www.KeepDeltaMyDelta.org, which became the centerpiece and virtual home of the campaign. Site visitors learned about the proposed deal and its potential impact on their communities, and registered to receive e-mail updates. The website went live on December 13, 2006, the same day Delta’s pilots union and other employees staged a 5,000-person rally at the Georgia International Convention Center in opposition of the US Airways bid.
The team also developed an “e-petition” that supporters could sign to “Say NO to US Airways.” This grassroots tool was used in media outreach and on Capitol Hill to demonstrate overwhelming opposition to the merger.
There were pro-Delta rallies in Atlanta and at eight other airports that might potentially lose flights if a merger went through. The rallies brought together Delta employees and retirees, local business and community leaders, and elected officials, many of whom spoke passionately about why the bid would hurt them, their jobs and their cities. The grand finale and photo opportunity at each event featured attendees signing a poster-sized version of the e-petition. Video footage of these rallies even made its way onto YouTube.com.
Finally, the communications team bought ads 20 in major daily print publications in the same target communities, thanking people for their support and reiterating the e-petition “call-to-action.”
As a result, the campaign launch earned more than 13,756,000 media impressions on December 19 and 20, while US Airways remained virtually silent.
The next step was to prepare for anticipated hearings in Washington, D.C. in mid-January. The public affairs team continued to recruit local legislators and community leaders in target states who joined the campaign, participated in seven additional “Delta Day” events, passed resolutions and proclamations, published opinion pieces in local print media, and authored rapid-response letters-to-the-editor.
Notably, the team was able to recruit the Business Travel Coalition and Southeast Tourism Society, two national consumer and business travel organizations, which publicly supported the campaign through testimony at the Senate Commerce Committee hearing on January 24, 2007.
Ketchum and its client also placed “Say NO to US Airways” advocacy ads in Washington, D.C. print publications; issued a “call-to-action” via the website to generate letters to Congress and the Departments of Justice and Transportation; and organized an employee “fly-in” and rally on Capitol Hill the day before the Senate Commerce Committee hearing, which featured 150 Delta pilots, other employees and retirees, and U.S. senators from Georgia and Kentucky. The employees then visited 68 Senate offices (chosen based on their committee assignments and potential state impacts), dropping off campaign kits with customized information on how a US Airways-Delta merger would negatively affect each particular state.
In just 55 days, the campaign created a groundswell of opposition to US Airways’ bid and support for Delta’s plan. It attracted more than 100,000 supporters via www.KeepDeltaMyDelta.org; generated more than 150,000 letters to Washington policymakers; eanred more than 220 million media impressions; and created a coalition of hundreds of national, state and local consumer groups, elected officials and community leaders, all of whom issued proclamations and public statements opposing the deal.
As a result of this outpouring of pressure, on January 31, 2007, Delta’s creditors announced their support for Delta’s plan to emerge from bankruptcy alone. Hours later, US Airways dropped its bid to merge with Delta.
As The Washington Post noted in its coverage of the failed merger attempt: “Analysts said that resistance in Congress, potential trouble in obtaining anti-trust approval and difficulties in combining antagonistic workforces probably led creditors to side with Delta’s management.
‘The US Airways proposal had more money, but there were a lot of problems, too,’ said Darryl Jenkins, an analyst and consultant. ‘Creditors saw Delta’s plan as having less risk. Delta’s management created enough doubt to be able to emerge free, for now.’”