MINNEAPOLIS -- Airline industry observers here are closely
monitoring the results of a new 10-year lease agreement designed to
help open up competition at the Minneapolis-St. Paul Airport.
The Metropolitan Airports Commission (MAC) last month approved a
deal that keeps seven airline gates at the airport's main Lindbergh
terminal on short-term leases. The deal allows the MAC to cancel
the lease of a short-term gate after 90 days' notice, thus
providing for changes if a new carrier wishes to enter the
market.
The gates are located primarily in the airport's blue and green
concourses. Two of the gates belong to Northwest Airlines, which is
based in Minneapolis and is the airport's dominant hub airline. The
other five gates belong to Continental, TWA, America West Airlines,
United Airlines and Vanguard Airlines.
Also under the agreement, Northwest agreed to accommodate
new-entrant carriers on its wide-body gates when requested to do
so. Northwest operates B747, B757 and DC-10 aircraft from these
gates.
The agreement comes at a time when Northwest is under increased
scrutiny at its Minneapolis and Detroit hubs, where low-fare
carriers have entered the market in recent years. They are
optimistic about the deal.
MAC officials said that after two years of negotiation on the
lease agreement, it is pleased with the results.
"Twin Cities travelers will benefit from a more competitive
environment," Jeff Hamiel, MAC executive director, said after the
agreement was announced.
The MAC negotiated the lease after 48 of the terminal's 70 gates
came up for renewal last year. The old agreement called for
new-entrant carriers to try subleasing gates from existing
carriers, according to a MAC spokeswoman.
The new agreement gives the MAC more flexibility in determining
which carriers gain access to the airport.
The spokeswoman said the MAC has been in talks with several
domestic and a couple of international carriers looking to serve
the local market, and she expressed optimism that new agreements
could be reached.
"Obviously, we want to have a choice of airlines for the
traveling public with some more low-cost service," she said.
At the same time, the MAC sees Northwest as an important tenant
at the airport and an important contributor to the regional
economy.
Minneapolis-St. Paul is Northwest's second-largest hub behind
Detroit's Wayne County Airport. About 34 million passengers use the
Minneapolis airport every year. That figure includes connecting
traffic.
"They've [Northwest] had their share of criticism over the past
years," the spokeswoman said. "We would not have the kind of
service we have if we didn't have Northwest here."
In Minneapolis, Northwest faces increased competition from Sun
Country Airlines, a former charter carrier that converted to
scheduled service from Detroit, Milwaukee and Minneapolis.
In September 1999, the MAC broke ground on a terminal to replace
the airport's Humphrey terminal by March 2001. Sun Country is set
to anchor the new terminal, which will have five jet gates and
three other gates by the end of 2001.
The lease, which runs through 2010, includes agreements on
funding for the Minneapolis-St. Paul 2010 expansion, noise
mitigation and other areas.
The main Lindbergh terminal is scheduled to expand, as well,
with 30 new parking facilities for regional aircraft, 12 new gates
for jet aircraft and a new runway.