Delta in limbo on deal with airport board
Posted: Wednesday, January 07, 2009
MINNEAPOLIS (AP) -- The commission that runs the Twin Cities airport voiced support Tuesday for a deal that would lock Delta Air Lines into keeping 10,000 jobs here in exchange for letting it out of a Northwest Airlines commitment to keep its headquarters in Minnesota.
But it did not grant outright approval of the deal.
Delta became the world's biggest carrier when it acquired Northwest on Oct. 29. Now that Northwest is part of Delta the combined airline is based in Atlanta.
The Minnesota tussle has its roots in the early 1990s, when the Metropolitan Airports Commission backed borrowing by Northwest.
That agreement -- and subsequent ones negotiated as recently as 2007 -- gave the commission the power to demand immediate repayment of some $245 million in bonds if Northwest moved its headquarters. It also allowed the commission to revoke almost $12 million per year in rent reductions and revenue-sharing from the sale of items like food and parking at Minneapolis-St. Paul International Airport, the nation's 13th-busiest.
Delta would rather not pay the money back right away. Airport commissioners are trying to extract as much as they can out of Northwest's new owners now that their efforts to keep an airline headquartered here have failed.
Commission chairman Jack Lanners said the commission's final support was mostly a matter of clarifying language. Commissioners had "unanimous support for the major components of the term sheet," he said.
Delta Senior Vice President and General Counsel Ben Hirst, a former Northwest Airlines executive who was part of the original 1990s deal, encouraged the commission to approve the deal Tuesday.
"If it's clarifying, that's possible," Delta Air Lines Inc. spokeswoman Tammy Lee said after the meeting. "If it's renegotiating entire terms or sections of the agreement, that will delay or stall this agreement indefinitely."
The new agreement calls for Delta to keep at least 10,000 jobs in Minnesota, nearly as many as Northwest has now. Those jobs were covered under promises by Delta to keep certain functions in Minnesota, including overseeing its regional operations.
"There are a lot of employees whose lives are on hold while they wait to find out where their jobs are ultimately going to be located," Lee said.
But it did not grant outright approval of the deal.
Delta became the world's biggest carrier when it acquired Northwest on Oct. 29. Now that Northwest is part of Delta the combined airline is based in Atlanta.
The Minnesota tussle has its roots in the early 1990s, when the Metropolitan Airports Commission backed borrowing by Northwest.
That agreement -- and subsequent ones negotiated as recently as 2007 -- gave the commission the power to demand immediate repayment of some $245 million in bonds if Northwest moved its headquarters. It also allowed the commission to revoke almost $12 million per year in rent reductions and revenue-sharing from the sale of items like food and parking at Minneapolis-St. Paul International Airport, the nation's 13th-busiest.
Delta would rather not pay the money back right away. Airport commissioners are trying to extract as much as they can out of Northwest's new owners now that their efforts to keep an airline headquartered here have failed.
Commission chairman Jack Lanners said the commission's final support was mostly a matter of clarifying language. Commissioners had "unanimous support for the major components of the term sheet," he said.
Delta Senior Vice President and General Counsel Ben Hirst, a former Northwest Airlines executive who was part of the original 1990s deal, encouraged the commission to approve the deal Tuesday.
"If it's clarifying, that's possible," Delta Air Lines Inc. spokeswoman Tammy Lee said after the meeting. "If it's renegotiating entire terms or sections of the agreement, that will delay or stall this agreement indefinitely."
The new agreement calls for Delta to keep at least 10,000 jobs in Minnesota, nearly as many as Northwest has now. Those jobs were covered under promises by Delta to keep certain functions in Minnesota, including overseeing its regional operations.
"There are a lot of employees whose lives are on hold while they wait to find out where their jobs are ultimately going to be located," Lee said.
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