Critic Says "Back Door Deal" Needs More Scrutiny

It's one heckuva deal for Northwest Airlines... a $239 million savings on airport charges at Minneapolis-St. Paul International Airport, in exchange for the airline keeping its headquarters in the Twin Cities once the airline emerges from Chapter 11 bankruptcy protection.

The Minneapolis-St. Paul Star Tribune reports the controversial plan was approved by a split Metropolitan Airports Commission (MAC) on Wednesday. The commission says the plan -- which will also cut costs for other airlines operating from MSP, to the tune of $40 million -- is needed to keep the airport competitive.

The commission approved the plan in an 8-4 vote. Charges such as landing and gate fees would be reduced through 2020 under the agreement, with the airport relying on charges on parking, food, and rental car operations to make up for the difference.

Dissenters say the agreement needs closer review before it hands airlines flying from MSP a 27-percent reduction in per-passenger costs.

"It's a back-room, back-door deal between the MAC and Northwest" that needs greater public review, said Rep. Frank Hornstein, author of a House bill that calls for legislative approval of the agreement.

Under the new plan, MSP would offer per-passenger costs 44 percent below average at other hub airports, according to the commission.

For Northwest, in particular, the plan is appealing... not only because it cuts future costs in operating from the Twin Cities, but also because it comes close to offsetting a $290 million loan Northwest received from MAC 15 years ago. The deal essentially hands Northwest the money to repay most of the original loan.

In exchange for the cost-savings, Northwest must commit to keeping its headquarters in Eagan, MN, and hub at MSP... even if the airline later merges with another carrier. If the airline moves either operation, the deal's off.

Commissioners voting against the plan argued it extends too far into the future. One took issue with the proposal to hand over an additional 25 percent of concessions revenue to airlines if those revenues exceed forecasts -- saying if that increase comes, it will be because of efforts by the commission, and not the carriers.

Commissioners Daniel Boivin of Minneapolis and Pat Harris of St. Paul voted against the plan, saying they want stronger wording on airport noise relief. "We are turning the operation of the airport over to Northwest Airlines," Boivin said.

MAC acknowledges the plan would mean reduced income for the commission... which would mean less money available for new construction, early debt payments, and soundproofing homes under flight paths. The latter is a particularly thorny issue, given the number of lawsuits before MAC calling for continuation of that program.

FMI: www.nwa.com, www.mspairport.com