"NWA capacity cuts may delay Minneapolis airport expansion"

Thursday, September 8, 2005

Delay likely for airport expansion 
By Terry Fiedler
The Minneapolis (MN) Star Tribune 


The Metropolitan Airports Commission is likely to delay its planned
expansion of Minneapolis-St. Paul International Airport by a year in
response to Northwest Airlines' decision to scale back its schedule.

"Northwest officials have advised me that they do not believe they need
additional gates ... until June 1, 2008, one year later than originally
projected," MAC Chairwoman Vicki Tigwell said at a meeting Wednesday.

Tigwell has told the MAC staff to review the impact of delaying the plan for
a year.

Northwest spokeswoman Jennifer Bagdade said the company "agrees with the MAC
decision to review the timeline for the 2020 plan."

MAC Commissioner Daniel Boivin, a critic of the 15-year, $983 million
expansion, said he was "relieved" by the decision. He noted that Northwest,
with the support of Gov. Tim Pawlenty, drafted the plan.

"I'm happy Northwest said, 'Look, let's take a breather,' " Boivin said. "It
gives us a better chance to study it and understand where the industry is
going to be. You can cite all kinds of horror stories with terminal
expansions in other places -- Pittsburgh, St. Louis, Miami, Dallas."

According to the MAC, Northwest cited higher fuel prices, exacerbated by
Hurricane Katrina, and a change in its short-term capacity outlook for its
changed view of the expansion. Northwest controls 80 percent of the gates at
the Twin Cities airport.

In a Sept. 1 filing with the Securities and Exchange Commission, Northwest
said that its fuel prices this year are expected to reach $3.3 billion, a 50
percent increase over 2004. As a result, the company told the SEC it is
likely to reduce its number of available seat miles "significantly" next
year from the miles flown in 2005.

The first phase of the expansion plan called for 12 new gates to be added at
the Humphrey terminal, bringing the total to 22, to be available by June
2007. The plan also called for 4,700 new parking spots at the Humphrey.

The new gates would be needed to accommodate the move of all
non-Northwest-affiliated airlines from the main Lindbergh terminal. The plan
calls for Northwest to assume all of the vacated 11 gates and the 36 more
gates that eventually would be added to the Lindbergh, bringing its total to
153.

Rather than let out construction bids, as the MAC had planned to do next
month, MAC staff will contact other airlines to determine their expansion
needs and see how they might be accommodated, most likely within the
existing facilities. MAC spokesman Pat Hogan said Sun Country and ATA have
expressed interest in obtaining more gates, but Hogan added that the MAC
isn't likely to proceed with a small expansion because the cost per gate
would be prohibitive.


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