Petters plans maintenance business; in talks with Duluth

Jun. 18--Jay Salmen, president of Petters Aviation, confirmed today that the company plans to lease a former Northwest Airlines' aircraft maintenance hangar as part of a new business venture.

Petters Aviation, a subsidiary of Minnetonka-based Petters Group Worldwide, plans to use the facility to outfit private business jets, Salmen said. The business plans to add up to 150 jobs in Duluth, he said.

"We think it will be not only a definite asset to the state of Minnesota but to the Duluth area both by taking a facility that has not been utilized and bringing it back into use and by creating job opportunities," Salmen said.

Petters Aviation is negotiating with Duluth officials to lease the 180,000-square-foot hangar as well as with strategic partners, Salmen said. The company already has an agreement with French aircraft maker Airbus to outfit business jets at the facility, and it's negotiating with two or three other partners, he said.

Although the final details are not complete, Salmen hopes to have the new business up and running early next year. There's a shortage worldwide of these so-called completion centers that customize corporate jets for buyers, he said. He compared it to buying a luxury home, he said.

The Duluth Economic Development Authority said that it planned to issue a news release about negotiations with a tenant for the hangar. DEED officials couldn't immediately be reached to confirm that Petters Aviation is the potential tenant.

The state of Minnesota issued $47.6 million in bonds in 1995 to finance the hangar for Northwest to create jobs on the Iron Range. The base once employed some 400 people, but Northwest closed it during a 2005 mechanics strike, one month before filing for bankruptcy reorganization. Northwest emerged from bankruptcy on May 31.

The Duluth Economic Development Authority recently received ownership of the hangar after a bankruptcy judge approved a deal for Eagan-based Northwest to pay nearly $36 million in outstanding debt and related payments.

Petters Group also owns co-owns Mendota Heights-based Sun Country Airlines.

Sheryl Jean can be reached at sjean@pioneerpress.com or 651-228-5576.

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