"Northwest Airlines, Detroit Airport Talk of Growth"

Thursday, July 31, 2003

Northwest Airlines, Detroit Airport Talk of Growth
The Detroit (MI) Free Press


Northwest Airlines and Detroit Metro Airport have reopened negotiations to
build 25 gates and reconstruct 25 others at the McNamara Terminal, an
airport official said Wednesday.

Both sides said in April that they had scrapped the project indefinitely
because of the slow economy and drop in passenger traffic.

Lester Robinson, chief executive of the Wayne County Airport Authority,
which oversees the county-owned airport, said Northwest is changing its
fleet mix to include more regional jets so the carrier would need bigger and
more gates.

The Free Press could not reach Northwest officials for comment Wednesday.

But Robinson said that a few weeks ago he received a written request from
Northwest to talk about the expansion plans.

The airport has yet to borrow about $600 million needed for the Phase II
gate expansion and reconstruction of the North Terminal complex, the
umbrella term for the Davey, Smith and Berry terminals. The Davey terminal
is to be rebuilt. A target start date has not been set.

Robinson said that on Sept. 23, he will give the airport authority details
about financing the two expansion projects.

As a part of Phase II, Concourse C, with its 25 gates for short-haul
aircraft, would be demolished and rebuilt to handle the regional jets
Northwest is using instead of turbo props.

The project also involves adding 16 commuter gates at Concourse C and nine
jet gates at Concourse B. The latter would increase from eight to 17 gates.
The McNamara Terminal, containing Concourses A through C, has 97 gates and
would grow to 122 if the expansion is completed.

The Phase II expansion is estimated to cost $205 million, almost $30 million
more than the original estimate. Robinson said the increase is because
Northwest would need a few more gates at the McNamara Terminal than
originally planned. But he did not give more details. He said the North
Terminal rebuilding still could be completed at the original budget of $408
million.

Robinson said that, before the airport decides to go ahead with the
expansion, it needs to settle some issues with Northwest. The main issue is
a dispute about $3 million in landing fees the airport claims Northwest
owes.

Separately, in a board meeting Wednesday, Tom Naughton, chief financial
officer of the airport authority, said it's not likely to meet its revenue
target for the fiscal year that ends Sept. 30.

Naughton said passenger traffic is 6.5 percent below expectations.

The airport was projecting $214 million in revenue for this fiscal year.
Now, the revenue is projected at about $206 million.

Naughton said, despite the revenue shortfall, the airport will balance its
budget because it has trimmed expenses on salaries and benefits and cut
other operating costs.


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