Apr 15, 2008 6:54 pm US/Central
Reality Check: NWA's Obligations To Minnesota
(WCCO)
A Minnesota lawmaker wants there to be a special session to talk about the impact of the Northwest Airlines and Delta Air Lines deal could have on the state's economy.
Taxpayers did get Northwest out of trouble before, and the airline promised to call Minnesota home.
Northwest Airlines made promises to the state of Minnesota when taxpayers bailed it out during tough times. Those promises could now cost Delta Air Lines big-time if the merger is approved.
When Northwest faced bankruptcy in 1992, taxpayers helped get the giant air carrier back on its feet and into the air.
IT'S TRUE...
In return for hundreds of millions of dollars in loans and concessions, Northwest made many promises including a commitment to keep its world headquarters in Minnesota. And in 2005 the Northwest's CEO Doug Steenland reassured lawmakers of its commitment to the state.
"Northwest Airlines has had its corporate headquarters in Minneapolis-St. Paul for over 75 years, and we intend to be headquartered in Minneapolis-St. Paul for the next 75 years," said Steenland.
IN FACT...
With the merger, the Northwest Airlines name is disappearing along with 1,000 high paying jobs at its headquarters in Eagan. According to the merger deal, the combined company will be headquartered in Atlanta.
BUT THAT'S NOT THE WHOLE STORY.
Failing to keep its commitment carries a price for Northwest. The airline will forfeit $215 million in future rebates and concessions at the airport. And Northwest must immediately pay back $245 million in loans from the Metropolitan Airports Commission.
Delta's CEO Richard Anderson said he thinks the airline can still meet the "spirit" of Northwest's agreements with the state, and he said Delta may try to renegotiate the deal with the airport.
That's Reality Check.
Below are some documents connected with Pat Kessler's Reality Check on the deal between Delta Air Lines and Northwest Airlines.
3rd Amendment To Airline Agreement
Building C 9th Amendment
Hub And HQ Language And Related Financial Info
Public Policy Covenants
NWA Public Policy Covenants And Remedies
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