Minneapolis-St. Paul Cutting Fees for Northwest, Sun Country

Jan. 4--The head of Sun Country Airlines said Wednesday he doesn't see any drawback to a financial-aid package with the Minneapolis-St. Paul International Airport aimed largely at helping his company's bigger competitor, Northwest Airlines.

Shaun Nugent, CEO of Mendota Heights-based Sun Country, said lower fees and rates at the airport "will level the playing field (against other airports) and give us an economic advantage."

Sun Country, the second-largest independent carrier in the Twin Cities, would see benefits too: Its airport fees would be cut by as much as 10 percent under the package.

The Metropolitan Airports Commission, which oversees the Twin Cities' airport, is considering whether to offer $279 million in financial benefits, including reduced rates and shared concession revenue, to airlines that operate there through 2020. Eagan-based Northwest would reap 86 percent of that package, or about $240 million.

Nugent said at a MAC meeting Wednesday that he wasn't troubled by the size of Northwest's portion. The plan, which provides most of its savings in the first decade and then declines, fits Sun Country's growth plans, he said.

The presidents of the Minnesota Chamber of Commerce and the St. Paul RiverCentre Convention and Visitors Bureau also voiced their support for the financial package, citing the importance of competitive air service for local businesses and visitors.

Next week, the MAC plans to brief about a dozen other airline officials on the proposal.

MAC Executive Director Jeff Hamiel said he expects some of those officials to appear at a MAC meeting scheduled for Jan. 10. MAC Commissioners could vote on the proposal as early as Jan. 16, but discussions also could continue into February, he said.

Under the plan, the MAC would see tens of millions of dollars less in concession revenue, debt-service fees and excess cash.

Still, some MAC commissioners voiced concerns about how the airport's finances would be affected by a possible merger involving Northwest or the possible loss of Northwest's Twin Cities hub. Northwest is operating in bankruptcy protection in an industry that has seen increased merger and takeover activity nationally in recent months.

Kathleen Nelson, Northwest's regional director of airport affairs, reiterated Wednesday that the airline's goal is to "keep our hub here and it is our goal to emerge from bankruptcy as an independent carrier." Northwest, which plans to exit bankruptcy by mid-2007, accounts for 80 percent of the Twin Cities airport's operations.

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