Hometown Favorite Coke Not Assured Victory Over Pepsi

This story is like deja vu from a taste-test commercial in the 1970s. Having made progress toward resolving most of the major issues in its absorption of Northwest Airlines, one of the sticky problems remaining for Delta Air Lines is -- believe it or not -- Coke, or Pepsi?

Northwest Airlines has a standing contract with Pepsi. Delta not only has Coca-Cola products exclusively, but Coke is also an Atlanta, GA institution, just like Delta.

For now, Delta flights will continue to serve Coke, and Northwest flights Pepsi... but one will ultimately be chosen as the two carriers are integrated.

Delta VP of Marketing Tim Mapes tells The Atlanta Journal-Constitution the contracts matter. "We're having conversations with both. There definitely will be financial considerations that we will be taking into account."

Coke and Pepsi should note -- last year, an issue in the merger was economic incentives given Northwest by the Minnesota Metropolitan Airports Commission, which would require the company to forfeit $200 million if Northwest didn't keep its headquarters, a hub, and a minimum number of employees in the state through 2020.

Delta President Ed Bastian made it clear that the combined carrier would be headquartered in Atlanta, and that if the commission wasn't flexible in negotiating a settlement, Delta would just pay the bill and leave town. The two sides came to an agreement in January.

But on the Coke versus Pepsi issue, Bastian apparently is speaking less like a hardball negotiator, and more like an Atlanta partisan. In an interview last year he said, "It'll be Coke. That's not a hard one."

Worth noting, Coca-Cola board member Ron Allen is a former Delta CEO. But that doesn't necessarily mean much. After all, Ed Bastian was once an executive at Pepsi.

FMI: www.delta.com, www.coca-cola.com, www.pepsi.com