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"Minnesota airport operators mull aid deal for beleaguered NWA"
Saturday, December 16, 2006
Minnesota airport operators mull aid deal for beleaguered NWA
The Associated Press
MINNEAPOLIS - Bankrupt Northwest Airlines could get a $255 million shot in
the arm from the operators of Minneapolis-St. Paul International Airport if
an aid deal under discussion goes through.
The proposal Northwest officials have been negotiating with staff from the
Metropolitan Airports Commission includes reduced airport charges and
revenue sharing from rents on airport restaurants, retailers and other
Jack Lanners, the commission's chairman, emphasized the preliminary status
of the talks.
``I don't think there's an agreement with Northwest or any other airlines on
specifics,'' he said.
The financial benefits would accrue through 2020. Two dozen other carriers
that serve the Twin Cities would split $44 million.
The Northwest breaks nearly equal the $260 million loan the airline received
from the commission in a 1991 bailout, some of which is outstanding.
Northwest's dominance in Minnesota air travel gives it some leverage. The
Eagan-based carrier and its regional partners accounted for eight of every
10 passengers in the Twin Cities in the 12 months that ended in September.
Northwest is refraining from public comments on its negotiations with the
commission. But documents filed with the commission say the concessions are
meant to keep Northwest from defaulting on the 1991 loan or scale back on
Commission spokesman Patrick Hogan said airport leaders worry about
Northwest moving flights from the Twin Cities to its Detroit hub. The
proposed plan would mean the amount the commission charges carriers per
passenger would be lower than those of more than half the nation's big-city
Robert Mars Jr., a commissioner from Duluth, said he's concerned about the
size of the concessions being discussed.
``There's going to be a no vote from Duluth,'' Mars said. ``We're a public
organization that's to provide for the flying public. Our job isn't to bail
out private enterprise.''
The panel is composed of a chairman and 14 commissioners, appointed mostly
by the governor.
Bert McKasy, a commissioner since 1999, said he backs a plan to provide $34
million in short-term aid to the airlines but is less committal about a
Commissioners are due to vote Monday on $21.8 million in financial aid for
all airlines, with the largest share going to Northwest. The remaining $12.2
million stems from a proposal to have the board buy jet bridges and
luggage-handling equipment from Northwest.
``I'd like us, after having committed the $34 million, to sit back for a
year,'' McKasy said. ``Let's see what happens coming out of bankruptcy, and
the acquisition talk, and so on.''
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