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January 16, 2007
:: MAC Commissioners Don't Get It
Despite past rants or observations on this weblog concerning Northwest Airlines' treatment of labor, whether written by myself, or quoted in one of my posts as being said by someone else, I do want to make clear that I am truly a fan of Northwest...they are my hometown team, my childhood ambition, my career goal, and possibly soon to be vicariously through aquisition of Mesaba, my employer. For not only my sake, but for the sake of several thousand families and businesses around the Twin Cities Metro...what is good for Northwest is good for everyone. Similarly, what is bad for Northwest ends up being bad for everyone too.
So why, in the name of sanity, have some of the commisioners of the Metropolitan Airports Commission (MAC) all of a sudden decided that they don't deserve to feel the pain like any other vendor that Northwest deals with? Since NWA is in the process of reorganizing through a Chapter 11 bankruptcy, hundreds -- perhaps thousands -- of businesses, vendors, labor groups, organizations, and services have had to cut the price of doing business with NWA to a minimum in order to retain contracts with the major carrier. The MAC also needs to restructure lease agreements and related contracts with NWA in order to retain the carrier as the tennant-in-chief of Minneapolis-St. Paul International Airport. Reduced rents on gates and services that MAC provides NWA is a key piece to the airline's ability to restructure and still call MSP "home".
Today, however, the Star Tribune printed two stories on the MAC today. The 1st, above the fold on A1, had to do with the repair of Runway 30L/12R slated for next fall (more on this later), and the 2nd, in the business section, reported the pending decision of MAC to provide $239 million in subsidies over the next 14 years. The deal, if inked, would be able to rebate $181 million in fees to airlines that lease gates from MAC by siphoning lease revenue from other terminal and airport businesses and shops.
The Strib quoted commissioners Mars, Foley, Casey, and Boivin as dissaproving the deal, mainly citing complaints of airlines wanting more money from the public. Mars, the MAC commisioner from Duluth, was quoted saying, "I have a problem, right now, with the continuing heavy hand of the airlines," said Commissioner Robert Mars Jr. "They've gone to their employees for money. Now they're going to the airports."
Mmmk. Yeah, everyone was ticked about having to give concessions...but what was the alternative? Not give something and watch the airline fail? Worse yet, watch the courts allow the complete abrogation of labor contracts? Or perhaps, maybe just a complete loss of thousands of jobs...would that have been a better way to handle things? Mars may have a chip on his shoulder about NWA's treatment of Duluth...and for good reasons.
But how about Daniel Boivin, the City of Minneapolis commissioner, who is quoted saying, "...the business model for airlines now is to have the public fund them." Boivin said residents in the airport flight path remain his main concern. "If we do any kind of deal with the airlines, I want the citizens to know they get their noise-abatement program back."
What on earth does the noise abatement program have to do with MAC allowing NWA to extend their gate leases at a cheaper rate? I would suppose that Boivin fears that money for MAC's noise abatement program runs out. But isn't that a separate issue on several fronts? (I really don't want to get started on a rant about folks who knowingly purchased homes near the airport and then never stop complaining about the noisy airplanes.)
I think the MAC Board needs to remember their mission: We provide and promote safe, convenient, environmentally sound and cost-competitive aviation services for our customers.
That's right! Cost competetive! Isn't that the name of the game these days? In an article filed later in the day, the Strib quotes long-time Executive Director Jeff Hamiel saying last month, "Airlines are facing a new economic reality, and we must also face this new reality if we are to protect the region's financial interests and compete successfully for air service."
And this brings up a very often overlooked reality about the airport. Northwest is not the only show in town. We have service from American, United, Delta, and Continental, and several of their affiliates and code-shares. We also have a smattering of low-cost and charter carriers, such as Midwest and Sun Country...the former may get taken over by AirTran, and the latter has an aggressive expansion plan in the works.
This aid package includes $40 million for these other carriers. Without this share given to them, MAC risks losing them. In order to serve the public genuinely, MAC has to consider that having these other carriers in town keeps airfares in check with the rest of the nation. If NWA doesn't get aid, they may bolt...but who is going to guarantee that the others stay, let alone expand in the absence of Red Tail?
Posted by pierre at 5:35 PM | Comments (0) | TrackBack