Wednesday December 17, 2008
Delta Air Lines and the Metropolitan Airports Commission, which manages Minneapolis-St. Paul International, reached a tentative agreement that will allow the airline to largely retain financial benefits that subsidiary Northwest Airlines received for maintaining its headquarters and primary hub there.
In exchange, the combined carrier will base its "Delta North" headquarters in Minneapolis, keep 10,000 NWA/DL employees based there--1,500 fewer than were based at NWA HQ prior to the merger--and operate at least 400 daily flights at MSP.
Under terms of long-time NWA/MAC pacts, if NWA moved its headquarters the airport authority could demand immediate payback of a $245 million loan given to the carrier in the form of bonds in 1992 as well as withdraw from rent-reduction and concessions/parking revenue-sharing agreements at MSP that saved NWA about $12 million annually.
DL decided to transfer all main headquarters operations to its Atlanta base post-merger, which angered Minnesota officials and caused MAC to assert that NWA had "a legal commitment to this state" (ATWOnline, Feb. 25).
Under an agreement outlined to the Associated Press and Minnesota media, DL said it would pay off the bonds, originally due in 2022, by 2016 and also pay an extra $500,000-$1 million in annual rent.
DL will move Compass Airlines, a wholly owned NWA subsidiary currently based in Chantilly, Va., near Washington Dulles, to Minneapolis. DL's regional airline operations will be managed from the Delta North offices. MAC is expected to approve the deal officially next month.
by Aaron Karp
Delta Air Lines and the Metropolitan Airports Commission, which manages Minneapolis-St. Paul International, reached a tentative agreement that will allow the airline to largely retain financial benefits that subsidiary Northwest Airlines received for maintaining its headquarters and primary hub there.
In exchange, the combined carrier will base its "Delta North" headquarters in Minneapolis, keep 10,000 NWA/DL employees based there--1,500 fewer than were based at NWA HQ prior to the merger--and operate at least 400 daily flights at MSP.
Under terms of long-time NWA/MAC pacts, if NWA moved its headquarters the airport authority could demand immediate payback of a $245 million loan given to the carrier in the form of bonds in 1992 as well as withdraw from rent-reduction and concessions/parking revenue-sharing agreements at MSP that saved NWA about $12 million annually.
DL decided to transfer all main headquarters operations to its Atlanta base post-merger, which angered Minnesota officials and caused MAC to assert that NWA had "a legal commitment to this state" (ATWOnline, Feb. 25).
Under an agreement outlined to the Associated Press and Minnesota media, DL said it would pay off the bonds, originally due in 2022, by 2016 and also pay an extra $500,000-$1 million in annual rent.
DL will move Compass Airlines, a wholly owned NWA subsidiary currently based in Chantilly, Va., near Washington Dulles, to Minneapolis. DL's regional airline operations will be managed from the Delta North offices. MAC is expected to approve the deal officially next month.
by Aaron Karp
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