Minneapolis-St. Paul International Airport is one of the Twin Cities’ greatest assets but can’t be taken for granted, the former chief of Delta Air Lines and Northwest Airlines said Monday.
Richard Anderson, who retired as chief executive of Atlanta-based Delta Air Lines last spring and as chairman in the fall, called MSP, the airline’s second-biggest hub, one of the nation’s best-run airports.
“Cities don’t always do a good job running this important, rich asset. Minnesota does it better than any place in the U.S. or around the world,” Anderson said at a lunch hosted by the Economic Club of Minnesota. “Don’t mess with it. Don’t politicize it.”
He lauded the structure of the Metropolitan Airports Commission and its long-term vision that benefits the community. The MAC’s financial management has kept operating costs low for airlines, which in turn encouraged airlines to choose MSP over competitors as a connecting hub.
“The viability of the hub is dependent on the economic viability and vibrancy of this community,” Anderson said. “Policymakers, you have to figure out how to continue to grow the economy ... because that’s what makes for a really vibrant community and supports a big hub operation.”
When Anderson served as chairman of the Atlanta Chamber of Commerce, he worked to recruit major corporations to relocate their headquarters. They successfully courted companies like National Cash Register, Mercedes North America and Porsche North America. “The selling point is the hub,” he said, referring to Atlanta’s airport, the nation’s busiest by passenger volume. “You can get anywhere in the world really quickly.”
Minneapolis-St. Paul has that, but it was never on the suitor shortlist that Atlanta was competing against, Anderson said. “That’s kind of harsh,” Anderson said. “That is a reality and is not one we should shrink from.”
Without a growing base of business and economy, the hub faces the risk of being downsized, Anderson said.
“Minnesota’s stable economy and its diversified nature of business does bode well for us from an air service standpoint,” said Brian Ryks, chief executive of the Metropolitan Airports Commission. “Our success does go hand-in-hand and that economy needs to keep pace with competing economies.”
While Anderson focused on the future of MSP, his speech comes at a dynamic time for the industry as executives adjust to a new administration. Airport infrastructure investment, the U.S. air traffic control system and Middle Eastern carriers have all recently become hot-button issues at the federal level, Anderson pointed out.
“I actually disagree with all the characterizations that we don’t invest in airports. We invest huge amounts in airports,” he said. “Just simply go around the U.S. to the top 20 airports. Billions have been invested or billions have been committed to being invested.”
Anderson, who still owns a home in the Twin Cities and frequently visits to pheasant hunt or fulfill obligations as a board member at Medtronic and Cargill, pointed to all of the current investments at MSP. Between now and 2023, the Metropolitan Airports Commission will spend $1.3 billion on airport improvements without using any tax dollars, he said. Airports operate as self-sustaining entities that are funded through leases, landing fees, passenger fees and other sources.
These costs are like clockwork, Anderson noted, because concrete has to be replaced and facilities need to be expanded for growth. About every seven to eight years, he said, MSP spends more than $1 billion on upkeep, the cost to build U.S. Bank Stadium in downtown Minneapolis. The airport last summer began a $200 million makeover of its front entrance, baggage claim, ticket counters and security lines.
Anderson is a longtime, vocal critic of the gulf carriers, like Etihad, Qatar and Emirates, for what he believes is a violation of the U.S. open skies agreements by getting subsidies from their home nations. This topic was raised last Friday when leaders from the major U.S. carriers met with President Donald Trump.
“Government-owned airlines with massive subsidies makes it almost impossible for U.S. for-profit carriers to be able to compete, and I think that will continue to be an issue that is debated,” he said. “I do think our trade agreements need to be enforced.”