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Lawmakers want to weigh in on benefits to NWA

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Plane at gate
A Northwest Airlines plane at the gate at Minneapolis-St. Paul airport.
MPR file photo

Legislation introduced in both the House and Senate would require lawmakers to approve any plan that provides airlines with more than $100 million in benefits.

The airports commission has been considering a plan that would provide airlines with $280 million in financial breaks. That would be achieved by reducing landing and other fees and giving airlines a greater share of the revenue the airport collects from merchants. Northwest is the airport's dominant airline and would receive by far the greatest benefit.

Sen. Scott Dibble, DFL-Minneapolis, is pushing for legislative oversight of financial relief granted to airlines. Dibble says he wants to be sure the state's interests are protected in any MAC deal involving Northwest. 

The company has balked at the MAC's demand that Northwest commit to keeping its headquarters in the Twin Cities. Dibble says Northwest should not get help from the airports commission until the airline's commitment to the Twin Cities and Minnesota are firmly resolved.

What are Northwest's intentions for the state on into the future, with respect to its operations, its continuing presence in the state?

"What are Northwest's intentions for the state on into the future, with respect to its operations, its continuing presence in the state? We have a huge loan out to Northwest  Airlines," said Dibble. "So, are we effectively paying off their loan by delivering a ton of money?"

Several other state lawmakers share those concerns. Sen. Steve Murphy, DFL-Red Wing, chair of the Senate Transportation Committee, says he also wants a deal that keeps Northwest in Minnesota. 

Murphy says the airports commission has done a good job working toward an agreement that would assure Northwest stays put. But Murphy says any plan to help Northwest should also address the issue of airport noise.

"I would like to see the Metropolitan Airports Commission ink a deal with Northwest that keeps them in Minnesota, keeps than as a hub operation, keeps those employees here," Murphy said. "In return, I'd like to see the noise issue better addressed."

Over the years, the airport has spent about $340 million to provide sound insulation to some 7,800 homes. Additional noise relief efforts are currently being held up by litigation. 

Some surrounding communities and citizens have sued the MAC. They argue the MAC reneged on a promise to insulate more homes. 

Airports commission chairman John Lanners says he doesn't object to the Legislature reviewing any deal with Northwest and other airlines. But Lanners says the MAC will be in a better position financially to address noise concerns if airlines are locked into longer-term lease agreements. 

Lanners adds the noise issue should not be part of the proposed agreement with Northwest and other airlines. 

"It should be addressed outside the agreement. Our goal and objective here is to get Northwest and other airlines to go along with this proposal, and reaffirm their airline lease agreements. Getting them to reaffirm those airline lease agreements puts us in a better position relative to noise," Lanners said.

The airport is committed to spending more on noise reduction. But airports commission spokesman Patrick Hogan says some airport neighbors have had unrealistic expectations about noise reduction efforts -- especially when it comes to providing air conditioning so residents can keep their windows closed in the summer.

"We're proposing providing air conditioning to homes outside the federal standards for any kind of noise mitigation. It's a shame some of the communities and many citizens had the feeling there was some sort of promise years ago to provide the same sort of insulation to homes four miles from the airport as we do to homes at the end of a runway," Hogan said.

To be sure, Northwest's future profitability will be a big factor in legislators' assessment of how much help Northwest deserves. The airline reported Tuesday that it earned about $300 million in 2006. That excludes bankruptcy costs. Last December, Northwest forecast it would earn less -- between $230 million and $270 million.

The profits will be shared with Northwest employees. CEO Doug Steenland said Northwest would pay out $44 million to workers for profit-sharing and other incentive programs.    The airline also says it remains on track to emerge from bankruptcy by June 30.