"Legislators eye MSP's deal with Northwest"

Thursday, March 8, 2007

Legislators eye MAC's deal with Northwest
A House committee takes the first move toward review of the carrier's lease
By Laurie Blake
The Minneapolis (MN) Star Tribune


Although airport officials had asked legislators not to tie their hands in
business dealings with airlines, members of a Minnesota House committee
Wednesday pulled out some rope.

On a voice vote, members of the committee called for the Legislature to have
the power to OK or scuttle a controversial airport lease that offers
Northwest Airlines a discount on airport charges worth $239 million over 15
years.

The bill is far from becoming law, but this approval by the House Local
Government and Metropolitan Affairs Committee indicates that some
legislators want to know more about the deal the Metropolitan Airports
Commission (MAC) offered Northwest in February in return for keeping its hub
and headquarters here.

Bill sponsor Rep. Frank Hornstein, DFL-Minneapolis, told the committee that
"very little public process went into this very, very significant
agreement."

He said he is concerned that discounts for airlines will mean higher parking
and concessions prices for travelers. A similar bill has cleared a Senate
subcommittee.

The lease would lower fees for all airlines at the airport from 2006 to 2020
in hopes of making Minneapolis-St. Paul International more competitive.

The terms were prompted by Northwest's move into bankruptcy and concerns
that the airline would use the bankruptcy proceedings to walk away from a
$290 million loan it received from the state 15 years ago.

The state has a direct interest in the loan and legislators should ensure
that the new lease reinforces repayment of that loan, said Rep. Debra
Hilstrom, DFL-Brooklyn Center. "I believe it is my job to make certain these
issues have some oversight."

The lease agreement affects all airlines using the airport; other airlines
would reap $40 million in discounts.

The deal is highly technical, the result of a year's worth of study and
negotiations, and is in line with other airports, MAC Executive Director
Jeff Hamiel told legislators. Over the life of the lease, it would reduce
airlines' cost of doing business at the airport by about $20 million a year.

Hamiel said the process was open and responsible and that airport officials
will forward the final document to legislators for review. But he said
requiring legislative approval would distort the MAC's ability to manage the
business of air transportation for the state. "We would like to ask you to
not tie our hands." 

Northwest Airlines representatives attended the committee hearing but did
not speak.

Community-based meetings

The committee also approved a bill requiring the MAC to hold at least one
commission meeting a year in a community affected by airplane noise from the
airport. 

Currently all MAC meetings are held at the airport terminal, requiring
members of the public to find a parking place in a terminal ramp and get a
permit to go through security to attend a meeting.

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