Minneapolis Airport Panel Gives $21.8 Million to Airlines

The agency that runs the Minneapolis-St. Paul International Airport approved $21.8 million in aid to airlines on Monday, but continued to debate a proposal for more rate reductions and revenue rebates for Northwest Airlines.

Northwest Airlines Corp. pushed for a $279 million financial aid package, saying it would be a 'win-win-win' for the airlines, the industry and travelers. The Metropolitan Airports Commission could hold a formal vote on the proposal in early January.

Northwest and top MAC officials said the proposal offers the best way to ensure that the airline will remain headquartered in the Twin Cities. They also said it minimized financial risks to the airport from the airline's bankruptcy.

Under questioning from those with doubts, both airline and MAC officials admitted that many issues remain unresolved -- including whether it makes sense to approve an aid package while Northwest might be considering a merger.

A Northwest official told the Airports Commission on Monday that the airline would not talk about possible merger talks.

'Is there a risk involved with this? Yes,' said Jeff Hamiel, the commission's executive director. '(But) this airline brings dramatic and significant vitality to this community.'

Hamiel said the aid package would help ensure that Northwest Airlines continued to meet its financial and legal obligations.

'We do not want our primary partner at this airport to walk away from its obligations, which it has the ability to do as part of the (bankruptcy) proceedings,' Hamiel said.

Under the proposal, which would cover a 14-year period, $239 million would go to Northwest. The remaining $40 million would go to other airlines using the airport.

The plan's biggest feature would mean $147 million in savings for Northwest. It includes a series of 'revenue rebates' in which the airline would get a percentage of the airport's food, beverage, merchandise and auto rental proceeds.

Jim Greenwald, Northwest vice president of facilities and airport affairs, said: 'It seems to us there would be an opportunity here, in looking at possible reductions in cost, to share some portion of this non-airline revenue' with all of the airlines at the airport.

Commissioner Dan Boivin told Greenwald he has reservations, and feels he has a strong obligation to taxpayers.

But the commission's top administrators agreed with Northwest, saying that many other airports share revenue from concessions. Food, beverage, auto rental and merchandise revenue at the Twin Cities airport, they added, will nearly double by 2010 from the $60 million collected in 1998.

Tammy McGee, who chairs the commission's finance, development and environment committee, said the proposal would benefit passengers and 'it seems to me that taxpayers are also being served.'

Information from: Star Tribune,

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