"Denver airline deal to be put in writing"

Thursday, August 19, 2004

Airline deal to be put in writing
By Jeffrey Leib 
The Denver (C) Post
 
 
Denver officials pledged Wednesday to put in writing a deal that delivered
more than $800,000 in landing-fee rebates to Lufthansa German Airlines in
exchange for the carrier's launch of nonstop service between Frankfurt and
Denver International Airport. 

City officials struck the deal with Lufthansa in late 2000 that guaranteed a
maximum of $865,000 in landing-fee rebates over three years.

The airline started Frankfurt-DIA service in March 2001.

All but $30,000 of the rebate has been paid to Lufthansa, Denver City
Attorney Cole Finegan told City Council members Wednesday at their economic
development committee meeting.

Earlier this month, Denver Auditor Dennis Gallagher said the DIA-Lufthansa
rebate deal was never put in writing or taken to the council for approval.
 
That was a violation of Denver's charter, Finegan acknowledged, adding that
his office is drawing up a written contract for council approval. The pact
also will ensure that the final $30,000 in fees can be rebated to the
airline.

On Wednesday, council members agreed that the Lufthansa deal should have
been written up as a contract when it was proposed. But most supported the
deal, saying economic benefits from the Frankfurt flight far outweighed the
rebates offered Lufthansa.

DIA officials say a daily nonstop round trip to Europe generates as much as
$90 million in economic benefits for the Denver area. The Frankfurt flight
resulted in a net gain to the airport of $1.4 million in 2003, DIA officials
say.

Only Councilwoman Jeanne Faatz objected to the Lufthansa deal, saying the
city "shouldn't be subsidizing large corporations" from general fund
revenues. Council members are expected to vote on the Lufthansa contract
next month.


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