Jan 6, 2009 8:14 pm US/Central
Delta In Limbo On Deal With Mpls. Airport Board
MINNEAPOLIS (AP) ―
The commission that runs the Twin Cities airport kept Delta Air Lines waiting for approval of a deal that would lock the airline into keeping 10,000 jobs here in exchange for letting it out of an Northwest Airlines commitment to keep its headquarters in Minnesota.
At a meeting on Tuesday the commission voiced general support but not outright approval for a deal that would let Northwest Airlines out of an agreement to keep its headquarters here. Now that Northwest is part of Delta the combined airline is based in Atlanta.
The 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, as well as 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 unanimous vote 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 something on 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 called 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.
(© 2009 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)
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