The Metropolitan Airports Commission will meet in special session Tuesday to consider a tentative agreement with Delta Air Lines that would lift penalties for closing Northwest Airlines' headquarters in exchange for preserving jobs and air service in Minnesota.
Under the pact, Delta would locate several business functions in Minnesota, including retaining a hub. The MAC would not enforce a 1992 agreement that could have forced Delta to repay $245 million in bond debt within 12 to 15 months of closing Northwest's headquarters in Eagan.
Delta, which acquired Northwest in October, is based in Atlanta. It's unclear when Northwest's headquarters will close.
MAC documents that became public Thursday show that the airports commission has several ways of enforcing the renegotiated agreement. For example, if Delta violates the air-service covenant that sets minimum flights at 400 per day, the MAC could deny Delta annual revenue from airport concessions. In 2009, Delta's cut of the revenue is estimated to be $7 million.
The new deal, which requires that Delta keep at least 10,000 jobs in Minnesota, adds language that spells out which business activities will be located in the state, including headquarters for Mesaba and Compass airlines and a pilot training center. If Delta violates that business provision, the agreement requires Delta to replace the lost jobs with "an equivalent or greater average monthly payroll."
The air service and job covenants are attached to the repayment schedule for bond debt. Delta is obligated to retire the debt on bonds that were sold in the early 1990s to raise capital for Northwest. Under the revised agreement, Delta must pay off the bonds by 2016, six years earlier than under the original deal.
Liz Fedor • 612-673-7709
