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Minneapolis Airport OKs Northwest Plan
Wednesday February 7, 8:17 pm ET
MINNEAPOLIS (AP) -- The commission that runs the Twin Cities airport approved changes that will save Northwest Airlines Corp. $239 million over 15 years on Wednesday in exchange for promises to keep its headquarters and a hub here.
The $239 million would be spread over 15 years and includes a mix of rebates, rent reductions and revenue-sharing from car rentals and food and beverage sales at the airport. All airlines at the airport would share in the rebates, which are expected to total $279 million, said Metropolitan Airports Commission spokesman Patrick Hogan.
Hogan said the commission agreed to the plan because it feared that Northwest would use its bankruptcy reorganization to get out of 1990s loans the airport made to Northwest. He said commissioners also feared that Northwest would reduce service to the Twin Cities. Northwest also has U.S. hubs in Detroit and Memphis.
Hogan said most of the plan had the support of Northwest and other airlines. However, the plan does include a new requirement for Northwest to cooperate with the airport on lawsuits over airplane noise that Northwest had not agreed to, Hogan said. He also said new leases incorporating the terms approved Wednesday would need to be signed, and Northwest would need to get bankruptcy court approval.
That new language kept Northwest from offering clear support for the plan Wednesday. The airline issued a statement saying only that it appreciated the commission's work to make the airport more competitive, and saying it would review the language added by commissioners.
The memorandum of understanding approved Wednesday would be retroactive to all of last year, and would run through 2020.
Northwest still owes $268 million on a 1992 loan from the airports commission, and another $28 million on a hangar loan. Hogan said Northwest has made payments on the $268 million loan while in bankruptcy but has reserved the right to ask for those back if it tries to renegotiate those loans.
"There was a certain amount of financial risk, and also a risk of losing some air service as well as their headquarters here" without the agreement, Hogan said.
Wednesday February 7, 8:17 pm ET
MINNEAPOLIS (AP) -- The commission that runs the Twin Cities airport approved changes that will save Northwest Airlines Corp. $239 million over 15 years on Wednesday in exchange for promises to keep its headquarters and a hub here.
The $239 million would be spread over 15 years and includes a mix of rebates, rent reductions and revenue-sharing from car rentals and food and beverage sales at the airport. All airlines at the airport would share in the rebates, which are expected to total $279 million, said Metropolitan Airports Commission spokesman Patrick Hogan.
Hogan said the commission agreed to the plan because it feared that Northwest would use its bankruptcy reorganization to get out of 1990s loans the airport made to Northwest. He said commissioners also feared that Northwest would reduce service to the Twin Cities. Northwest also has U.S. hubs in Detroit and Memphis.
Hogan said most of the plan had the support of Northwest and other airlines. However, the plan does include a new requirement for Northwest to cooperate with the airport on lawsuits over airplane noise that Northwest had not agreed to, Hogan said. He also said new leases incorporating the terms approved Wednesday would need to be signed, and Northwest would need to get bankruptcy court approval.
That new language kept Northwest from offering clear support for the plan Wednesday. The airline issued a statement saying only that it appreciated the commission's work to make the airport more competitive, and saying it would review the language added by commissioners.
The memorandum of understanding approved Wednesday would be retroactive to all of last year, and would run through 2020.
Northwest still owes $268 million on a 1992 loan from the airports commission, and another $28 million on a hangar loan. Hogan said Northwest has made payments on the $268 million loan while in bankruptcy but has reserved the right to ask for those back if it tries to renegotiate those loans.
"There was a certain amount of financial risk, and also a risk of losing some air service as well as their headquarters here" without the agreement, Hogan said.
