"Minneapolis panel urges cut in airport fees"

Thursday, December 7, 2006

MAC panel urges cut in airport fees
The bulk of the $21.8 million break would go to Northwest, the airport's
biggest carrier.
By Mike Meyers
The Minneapolis (MN) Star Tribune


A Metropolitan Airports Commission committee on Wednesday urged the agency
to give a $21.8 million break on airport fees in 2007 to the carriers flying
in and out of Minneapolis-St. Paul International Airport.

"MAC officials have been working with Northwest Airlines for the past 11
months to identify ways of reducing airline costs at MSP," the agency said
in a prepared statement.

For many years MSP has ranked among the lowest-cost airports in the country
in terms of landing fees, ramp fees and terminal charges.

The average national charge per passenger, a benchmark measure of airport
fees imposed on airlines, is $8.77. Airlines at MSP would pay an average of
$6.03 per passenger under the proposed fee structure, MAC officials
estimate. At current rates, the airlines pay $6.93 per passenger.

The bulk of the savings would go to Northwest, since it accounts for about
80 percent of the traffic at MSP. The MAC said airlines would save a total
of $21.8 million over the next year if the committee's recommendation is
adopted.

"One of our primary competitors is Detroit [Metro Airport]," said Patrick
Hogan, a MAC spokesman. "We want Northwest to maintain service at MSP rather
than expand in Detroit."

Detroit airport officials recently reduced landing fees by 28 percent.
Airport charges in that city average $5.04 per passenger, Hogan said.

Detroit, Minneapolis and Memphis are the three U.S. hub airports for
Northwest, and Detroit has become the base for many of the carrier's
international flights.

Would passengers share in the savings to Northwest and other airlines?

"The proposed rate reductions will make MSP more cost-competitive for all
airlines," Northwest said in response to the question. "Cost of operation is
an element in evaluating service to an airport."

Officials said the MAC would still remain financially sound if the cuts are
passed. The agency is forecasting a 5.6 percent increase in concession
revenue next year.

Rates on concession businesses are not being raised, Hogan said. The MAC,
however, gets a cut of sales, which are expected to grow.

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