South Metro Airport Action Council
** S M A A C **


For more information: Jim Spensley, 612.824.9988

The SMAAC Board of Directors today released a statement about testimony at the House Local Government and Metropolitan Affairs Committee Hearing on the Delta/NWA merger (10 AM Thursday November 13, 2008). The Statement reads:

The SMAAC Board of Directors doubts that Delta/Northwest would keep a major hub here if the airline is under financial stress. To avoid financial stress, Delta/Northwest pretty much has to: break the back of the Northwest unions in Minnesota; continue its 95% dominance of gates and seats and 40% higher fares for Minnesotans; unjustly profit from MSP revenue-sharing and fee concessions; and continue to benefit from other government subsidies, protections, and lack of regulation.

SMACC believes that the MAC/Northwest association which has provided MAC with operating revenue -- has not lowered fares, increased airline competition and diversified employers, protected the environment, or respected the rights of MSP neighbors. Further, the operational rate increases, started in 1999 and continued during construction, are less safe than before expansion and might be dangerous under conditions where MAC, FAA, and the airlines are steeply reducing staff levels and staff training.

MAC or Delta proposes to re-negotiate the $250 million loan repayment terms rather than enforce the condition -- If Delta moves the Headquarters, the loan must be repaid in full right now the State needs to interpose.

BACKGROUND: SMAAC appeared at recent Legislative Hearings outlining the organizations concerns. SMAAC represents neighborhoods near the airport and air travelers and small businesses concerned about high fares, safety at MSP, noise and pollution. See November 13, letter to the Local Government and Metropolitan Affairs Committee.

SMAAC's and other public testimony planned for today's Hearing may not be heard, according to Committee staff.

Several legislators were surprised to learn that the agreement with Northwest included a clause making repayment the sole remedy in case of a breach by Northwest. Usually loan contracts have more collateral and more compelling breach clauses favoring the lender, such as actual and consequential damages, specific performance, or other penalties.

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