Airport Commission Feared Loan Default By Carrier

The Metropolitan Airports Commission, governing board of the Minneapolis-St. Paul International Airport, voted 8 to 1 Wednesday to give final approval for a $239 million financial-aid package to Northwest Airlines.

The 15-year deal includes $39 million in reduced rent rebates and concession revenue sharing. It requires the Eagan, MN-based airline to keep its hub and headquarters in the Twin Cities, and calls for it to cooperate with the MAC in resolving current noise litigation in Hennepin County, according to the Twin Cities Pioneer Press.

MAC Commissioner Daniel Boivin gave the sole nay vote. He said he opposed a provision to extend Northwest's airport lease on the airport's concourse G by five years, to 2020, because "it allows the airline to keep their fortress hub here longer" at the expense of new competition.

Northwest was "pleased" with the MAC vote, according to carrier spokesman Roman Blahoski. "This decision will allow the airline to continue to offer Twin Cities passengers unmatched air service to destinations throughout the US and across the globe," he said.

As ANN has reported, the commission said 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.

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 the carrier received from MAC 15 years ago. The deal essentially hands Northwest the money to repay most of the original loan -- a big bonus for the bankrupt airline.

The MAC said it feared Northwest might default on its airport leases and the outstanding loan in bankruptcy. The hub and headquarters condition was added to the package when several commissioners wondered how the airport's finances might be affected by a possible Northwest merger involving Northwest or the possible loss of Northwest's hub.

Northwest has been operating in bankruptcy protection for the past 20 months and has been the subject or merger speculation. It plans to emerge from bankruptcy next month.

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