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NW Blocks Other Airlines At DTW  
User currently offlineDtwclipper From , joined Dec 1969, posts, RR:
Posted (10 years 7 months 2 weeks 2 days 17 hours ago) and read 6208 times:

Airport puts lid on rivals of Northwest

New terminal won't allow added service
February 7, 2004






BY RAJIV VYAS
FREE PRESS BUSINESS WRITER




The head of the Wayne County Airport Authority says he wants to renegotiate a little-known 2001 agreement with Northwest Airlines that keeps competing airlines from adding gates and international service at the new terminal planned for Metro Airport.

Authority Chairman James Nicholson wants the $428-million North Terminal to attract new airlines and encourage existing carriers to add service, hoping the competition would bring down fares charged by Northwest, which carries three of every four passengers at the airport.

The North Terminal, opening in 2007 or 2008, would be a rebuilding of the Davey Terminal, where Northwest used to fly from. The Smith Terminal, the airport's oldest and the one now used by Northwest competitors, would be demolished.

But the project has considerable restrictions because of the agreement signed by Wayne County and Northwest on Sept. 27, 2001.

"Times change," Nicholson said Monday. "There are real constraints on what we can do."

Northwest agreed to support the North Terminal and a second phase to the new McNamara Terminal in exchange for several conditions that could influence the competitive mix of airlines at Metro for decades to come.

Two of the most crucial terms in the 2001 agreement:


The new terminal is restricted to a maximum of 29 gates. The gates are only for narrow-body jets such as Airbus A320s and Boeing DC-9s.
Gates for wide-body jets such as Airbus A330s or Boeing 747s, needed for longer-distance flights, could be built, but each would then take the place of up to two of the allotted 29 gates.

Airlines competing with Northwest currently operate 30 gates at the Smith Terminal.


The North Terminal cannot contain a customs and immigration facility, which means a competing airline would not be able to offer incoming international service there. Consumer advocates and airline experts say the restrictions will limit customer choice, prevent new airlines from entering the Detroit market, and give Northwest an unusual amount of power over its competitors.
Airport officials said the 2001 agreement doesn't contain an expiration date. Northwest's lease at Metro runs through 2032.

McNamara signed the deal
Nicholson said he wants his airport authority to persuade Northwest to give the airport more flexibility and have an immigration and customs department at the new terminal. He said the 2001 agreement was signed when the authority did not exist.

The agreement was signed by then-Wayne County Executive Ed McNamara and James Greenwald, Northwest's vice president of facilities and airport affairs.

"If I was to do this type of agreement I would not have put in those restrictions," said Michael Glusac, a board member and secretary of the airport authority.

Andrea Fischer Newman, senior vice-president of government affairs for Northwest, said the agreement followed one negotiated in the mid-1990s between all the airlines and the county. She said if airlines or the airport wanted to expand, "Northwest is always open to discussions."

The 2001 agreement and its restrictions received little public notice.

Such restrictions are rare, experts said.

"I have never heard anything like this," said Kevin Mitchell, chairman of Business Travel Coalition, a lobbying group for corporate buyers of airline services. "It sounds very heavy-handed."

Most airports don't have such restrictions because it discourages competition, said Morten Beyer, chairman of Morten Beyer & Agnew, an airline industry consultant.

"I have never seen one that is so blatant as that one," said George Doughty, executive director of Lehigh Valley International Airport. Doughty was the director of aviation for Denver between 1984 and 1992 when he oversaw construction of Denver International Airport.

Northwest also has veto power over any capital improvement programs at Metro.

Spirit, American Airlines, America West Airlines, Southwest Airlines, United Airlines and US Airways would use the North Terminal. Northwest, its affiliates such as Continental and KLM, and Lufthansa use the McNamara Terminal.

Airport leaders want the new terminal to be as good if not better than McNamara, which cost $1.2 billion.

But Nicholson said the restrictions could prevent that.

Competitors have avoided confrontation on the issue.

"While there are limitations that will be placed upon the new terminal . . . we are confident that we will develop a state-of-the-art facility that is both customer friendly and operationally sound," said Jacques Beaumier, director of properties and facilities for Spirit Airlines Inc. Beaumier is also chairman of the North Terminal airline committee, which is made up of the airlines using the Smith terminal.

The 29-gate restriction prevents competing airlines from expanding service substantially -- unless Northwest approves.

"I don't know if 29 is too little or too much or just right," authority member Glusac said. But the airport has to look four to five decades ahead and needs more flexibility, he said.

Airport CEO Lester Robinson said the 29-gate restriction arose from a survey for requirements in 2001. "We are not planning for four or five decades from now in the facility we are putting in," but the next 10 years, he said.

The airport, meanwhile, is evaluating the economic viability of the Berry Terminal, which is used for a few international flights. If the Berry Terminal is not viable, the airport may want to demolish it and shift international and charter operations to the new complex, Robinson said. For that it would need Northwest permission.

Robinson also said the airport may need more gates. He said Northwest has been cooperative in the past and he doesn't see a problem in getting the airline's approval.






46 replies: All unread, showing first 25:
 
User currently offlinePanaman From United States of America, joined Sep 1999, 439 posts, RR: 0
Reply 1, posted (10 years 7 months 2 weeks 2 days 17 hours ago) and read 6146 times:

I think this would fall under the term

Dtw got F*uck!!!!!!!!!!!!


HA Ha nice one NWA

Also sounds like something Mayor Dailey would do to ORD. Since he loves the buddy buddy system. hint hint UAL and AA



Sorry I moved from SXM, looking for a new house on Anguilla now!
User currently offlineFlyingColours From United Kingdom, joined Dec 2003, 2315 posts, RR: 10
Reply 2, posted (10 years 7 months 2 weeks 2 days 15 hours ago) and read 6053 times:

I admit I skimmed the last few Paras there.

It sounds like the airport is now being (or going to be) screwed over by NW unless they are willing to negotiate.

BOEING DC-9 - I am no DC9 fan but argh thats an outrage!!!

Well if the new terminal can take narrow-bodies is there anywhere where a widebody could go?

Phil
FlyingColours



Lifes a train racing towards you, now you can either run away or grab a chair & a beer and watch it come - Phil
User currently offlineWorldperks From , joined Dec 1969, posts, RR:
Reply 3, posted (10 years 7 months 2 weeks 2 days 14 hours ago) and read 5949 times:

Phil,

(Correct me if I'm wrong, but) I believe the Berry Terminal has four widebody gates.



User currently offlineLuv2fly From United States of America, joined May 2003, 12110 posts, RR: 48
Reply 4, posted (10 years 7 months 2 weeks 2 days 14 hours ago) and read 5913 times:
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I think the thing to remember here is this quote!

"McNamara signed the deal"

So you can not blame NW for asking for and getting this contract. You need to blame McNamara for being so willing to give away the farm, so to say and not looking out for the best interest of the paying and traveling public. Good deal for NW, bad for the paying passengers who want choices.



You can cut the irony with a knife
User currently offlineHlywdCatft From United States of America, joined Jan 2001, 5321 posts, RR: 6
Reply 5, posted (10 years 7 months 2 weeks 2 days 14 hours ago) and read 5841 times:

Hey Mac got a good deal out of it, he got his name on the terminal, thats all he cared about.

User currently offlineFlyingbronco05 From United States of America, joined May 2002, 3840 posts, RR: 2
Reply 6, posted (10 years 7 months 2 weeks 2 days 12 hours ago) and read 5717 times:

Isn't it ILLEGAL to block/prohibit competition?

This just gives me yet ANOTHER reason to never fly NW Smile


fb05

[Edited 2004-02-07 18:01:33]


Never Trust Your Fuel Gauge
User currently offlineXJDTW From United States of America, joined Feb 2004, 26 posts, RR: 0
Reply 7, posted (10 years 7 months 2 weeks 2 days 12 hours ago) and read 5675 times:

Somebody at NWA deserves a nice bonus check! Way to go NW!

User currently offlineLuv2fly From United States of America, joined May 2003, 12110 posts, RR: 48
Reply 8, posted (10 years 7 months 2 weeks 2 days 12 hours ago) and read 5660 times:
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NW did what any business, be it airline or otherwise to go after and get the best deal possible for themselves. The fact that McNamara gave it to them and did not counter offer and go after something that would have been more of a balance, shows he is the guilty party in all of this.


You can cut the irony with a knife
User currently offlineSllevin From United States of America, joined Jan 2002, 3376 posts, RR: 6
Reply 9, posted (10 years 7 months 2 weeks 2 days 12 hours ago) and read 5597 times:

One would assume that they signed the deal for fear that NW would pull up stakes and focus more expansion at MSP and MEM. That would have resulted in a large loss of jobs and probably very little increase in competition.

Let's face it, DTW is not likely to gain any more international traffic in any case -- 4 widebody gates at Berry should handle all the other carriers -- and while people talk and talk...not much has happened. After all, DTW already IS a Southwest city and has been for a decade. Toss in Spirit and you've already got significant low cost competition at DTW.

In short, while the theory of a lot of carriers hubbing at DTW is nice...it ain't likely. And to have driven significant NW action from DTW in hopes that someone else would come would have been the subject of a different thread, titled:

"How could the DTW officials been so stupid as to have driven NW out?"

 Smile

Steve


User currently offlineUal727222 From United States of America, joined Dec 2003, 61 posts, RR: 0
Reply 10, posted (10 years 7 months 2 weeks 2 days 12 hours ago) and read 5564 times:

Northwest has greater dominance at its hubs than do other carriers at theirs. UA has firm market control at Denver and San Francisco, though Frontier has chipped at some of the DEN routes. Detroit is an important city for NWA, and NWA is important for Detroit. Competition may enter, but I expect NWA to be jealous of their dominance and unwilling to concede too much.

User currently offlineIndustrialPate From , joined Dec 1969, posts, RR:
Reply 11, posted (10 years 7 months 2 weeks 2 days 10 hours ago) and read 5467 times:

I think the thing to remember here is this quote!

No, I think the thing to remember is the author of the article (an a.net member who is often wrong in his articles).

- - -

Let's make something clear: the WorldGateway exists today only because of NW's efforts, including most of the initial financing. Why the hell shouldn't they be entitled to control its fate status quo? The Barry Terminal, although a dump, is still an adequet terminal for OAL's needs. The WorldGateway was built for their needs. Nothing would stop LH, BA, AF (should they choose to serve DTW, which they will probably eventually do), etc. getting together and building a new international terminal, a la NW style.


User currently offlineLuv2fly From United States of America, joined May 2003, 12110 posts, RR: 48
Reply 12, posted (10 years 7 months 2 weeks 2 days 10 hours ago) and read 5426 times:
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IP I agree with you, I was just trying to point out that they did nothing wrong in reaching the deal that they did in fact receive. Any and all business's would go for the best and why not, after all last I looked NW was in business to make money, and not a non-profit company.


You can cut the irony with a knife
User currently offlineB4real From United States of America, joined Aug 2003, 2644 posts, RR: 5
Reply 13, posted (10 years 7 months 2 weeks 2 days 10 hours ago) and read 5410 times:

Definitely some sketchy administration going on @ DTW. I'm glad I changed my preferred carrier from NW, this was tough as I live in Michigan.

I always was curious of the hocus-pocus going on with the DTW airport administration.



B4REAL, spelled like it sounds
User currently offlineIndustrialPate From , joined Dec 1969, posts, RR:
Reply 14, posted (10 years 7 months 2 weeks 2 days 10 hours ago) and read 5392 times:

I always was curious of the hocus-pocus going on with the DTW airport administration.

A couple points though:

- The terminal was built mostly with NW's money (of course it'll be paid back, but in the meantime why shouldn't they enjoy what they paid for?)

- Other airlines are free to enter the market / expand their service at the Barry Terminal. The WorldGateway is NW's terminal. If NW wanted ORD-NRT, and wanted the service to depart from T1 at ORD, do you think UA would allow it?


User currently offlineHlywdCatft From United States of America, joined Jan 2001, 5321 posts, RR: 6
Reply 15, posted (10 years 7 months 2 weeks 2 days 9 hours ago) and read 5336 times:

I don't see what should block airlines from flying international routes that Northwest doesn't currently serve like DTW- MXP, DTW-BRU, DTW-WAW etc.

User currently offlineAussiestu From Australia, joined Mar 2001, 780 posts, RR: 1
Reply 16, posted (10 years 7 months 2 weeks 2 days 9 hours ago) and read 5280 times:


IndustrialPate - does BA not already serve DTW? Does AF or LH? If BA does then I can hardly see them joining AF or LH to build a new terminal? All 3 carriers are in different alliances and so joining forces to take on NW is not an option.


User currently offlineJafa From United States of America, joined Aug 2003, 782 posts, RR: 4
Reply 17, posted (10 years 7 months 2 weeks 2 days 9 hours ago) and read 5268 times:

This is essentially a non-story! Blah, Blah, blah, then in the end the airport director says: Northwest has been cooperative in the past and doesn't see a problem in getting thier approval.
The airport trusted Northwest enough to allow them to design & manage construction of the WorldGateway. Saving the county a ton of money.
Actually NW has a bout 50% market share in DTW O&D traffic. If you include the people that are just changing planes in DTW then it would seem that NW dominates DTW.


User currently offlineHammer From United States of America, joined Jul 2001, 689 posts, RR: 2
Reply 18, posted (10 years 7 months 2 weeks 2 days 9 hours ago) and read 5259 times:

Bronco, you seriously won't fly NWA because of this DTW World Gateway thing? It was an agreement when NWA built the new terminal that there would not be alot of growth from other airlines, this was agreed upon from not only NWA but Wayne County executives. That's just the way it is, it is a great thing for NWA.

User currently offlineIndustrialPate From , joined Dec 1969, posts, RR:
Reply 19, posted (10 years 7 months 2 weeks 2 days 8 hours ago) and read 5193 times:

Aussiestu,
BA and LH already serve DTW; I was referring to AF. My point is that DTW's Barry Terminal is sufficient for international growth & expansion -- should exisiting or potential airlines want to jazz it up, then they're more-than-welcome to do so...


User currently offlineFrontiers4ever From United States of America, joined Dec 2003, 173 posts, RR: 0
Reply 20, posted (10 years 7 months 2 weeks 2 days 8 hours ago) and read 5150 times:

I believe that if NWA was the one to build it and largely finance it, why shouldn't they be aloud to do as they please with it. I got an idea, I will invest in a hot stock, and because it is awesome others want in on it. And I say no because I put up the cash, i am the bad guy.

-Frontiers4ever



Until you prove, your right, your wrong
User currently offlineM404 From United States of America, joined Nov 2003, 2226 posts, RR: 5
Reply 21, posted (10 years 7 months 2 weeks 2 days 8 hours ago) and read 5133 times:
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Lets see now. DTW was known for years as the worst passenger friendly hub in the nation. It literally and figuratively stank. So, the dominant hub carrier there who was not making a whole lot of money at the time and still isn't, went out and with the counties permission and in fact blessing because of the rates they themselves thought fine when compared with what bonds could have gotten, built a world recognized airport the city for the first time in my memory could actually brag about.

Now to acheive this the carrier asked and received promises from the county to protect their own investment for a period of time and recoup their efforts. What is wrong with that? Does not city and county goverment grant tax breaks every single day to companies to build or stay in their locales? Can these same tax breaks be viewed by other companies whom for geographic reasons did not get the same financial footing in that location as anti-competitive? Perhaps. But that is business as usual.

They are called fortress hubs for a reason and if a company has its hands tied while trying to protect precious assets then no long term investments can or should be made. And what do you tell investers then? We cannot all go back to point "A" and start over. There is no level playing field. If Detroit wanted a new airport that would have had free entry by everyone at any time then they will have to build and pay for it.

As the new LCCs age and expand through purchases and building their own debt loads and those of the entities that sponsor them will grow and need servicing. The employees will need profits put into retirement plans and an aging work force will need better medical coverage.....And they will be called Legacy carriers because now they have one.

A more interesting story would have been to follow the money trail (as always) as to how the financing actually took place and by whom and from whom. Check the facilitators. That would be the real lesson in world financing not some carping because of a perceived lack of choice in ticketing.



Less sarcasm and more thought equal better understanding
User currently offlineDCA-ROCguy From United States of America, joined Apr 2000, 4506 posts, RR: 33
Reply 22, posted (10 years 7 months 2 weeks 2 days 7 hours ago) and read 5075 times:

The future for FNT just looks brighter and brighter.  Smile

Wayne County's deal with Northwest probably violates the interstate commerce clause of the Constitution. Only Congress is allowed to pass stinking anticonsumer corruption of this particular type, e.g. the Wright Amendment. At the very least, NW should have stuffed a bunch of cash in Senator Levin and Senator Stabenow's pockets and done it right. Of course, they probably figured that since the oaf of a county executive was willing to sign away control of a public facility, they didn't need to bother.

But we probably won't find out unless someone sues, and even Spirit probably has better things to spend their money on. Their existing Smith terminal gates can still provide for substantial expansion, and Southwest has been content to keep their head down, scummy airport deals with a high-fare Cartel fortress carrier or no. Other network carriers probably won't have much need to expand in the next few years. AirTran is thriving at Flint. JetBlue and/ or Frontier would probably only need one gate, and Wayne County could probably wangle one for them if needed.

The Berry Terminal, architectural clunker that it is, can probably handle most non-NW related international needs, esp. if BA and LH are at the WorldGateway.

The State of Michigan could void the deal if it wanted to, since counties are creatures of the state there like everywhere else. But NW probably has stuffed their pockets full of cash too.

Jim



Need a new airline paint scheme? Better call Saul! (Bass that is)
User currently offlineIndustrialPate From , joined Dec 1969, posts, RR:
Reply 23, posted (10 years 7 months 2 weeks 2 days 7 hours ago) and read 5041 times:

DCA-ROCguy,

One more time: NW built and financed the WorldGateway. They were rewarded with long-term leases on all the gates… why shouldn’t they decide who gets to use them, and to where? There’s plenty of room for growth, expansion and new carriers within the L.C. Smith and Barry Terminals. And again, if NW wanted to operate ORD-NRT from T1 at ORD, do you think UA would allow it? So again, what’s the problem?

If NW were controlling grown/expansion/new carriers at the L.C. Smith and Barry Terminals, then I think there’d be an argument. But they don’t!


User currently offlineDCA-ROCguy From United States of America, joined Apr 2000, 4506 posts, RR: 33
Reply 24, posted (10 years 7 months 2 weeks 2 days 7 hours ago) and read 5003 times:

I wasn't talking about the WorldGateway, a facility financed by one airline. I was talking about the rest of the airport. Read the article: "Northwest also has veto power over any capital improvement programs at Metro." That means that Bozo the McNamara *effectively signed away development power at Metro to Northwest.* Which will probably get struck down in court on interstate-commerce grounds once it's challenged.

But, IMO, no one probably feels it's worth the cost of a court fight with Northwest at this point. If Detroit experts have reason to think otherwise, by all means let us know; this is just my opinion as an observer.

There is *not* "plenty of room" for expansion of other carriers in the LC Smith terminal, in terms of new gate space. My non-expert observation is that existing gates can serve well for incumbent carriers for now. But should Spirit copmletely carry through the extensive expansion plans they announced last summer, they'll probably need additional gates. And Wayne County should not have to try to take a gate from anyone else to do so.

Detroit Metro Airport is a *public facility* and it should be operated in the public interest. Giving a network carrier known for its especially anti-competitive practices, control of an entire public facility, stinks to high heaven. And it's probably illegal.

Jim



Need a new airline paint scheme? Better call Saul! (Bass that is)
25 Sllevin : Detroit Metro Airport is a *public facility* and it should be operated in the public interest. Giving a network carrier known for its especially anti-
26 DCA-ROCguy : Furthermore: any threats by Northwest to leave Detroit or move lots of hub traffic to MEM or MSP are *empty.* Detroit and its surrounding communities
27 IndustrialPate : …signed away development power at Metro to Northwest.* Which will probably get struck down in court on interstate-commerce grounds once it's challen
28 Warszawa : Maybe we'll see FNT become really popular, almost like the " Chicago Midway " of Michigan, so to speak. Afterall... its not that far from DTW, like wh
29 NWAFA : NWA used most of their own money to build the new terminal. MI people are always bitching bitching bitching about NWA..that they ONLY can fly NWA. So
30 Post contains images FlyABR : geesh....who gives a squat about detroit ?? i'd rather see something done at MSP so that southwest and others would enter that market...! btw, didn't
31 Post contains images Warszawa : " MI people are always bitching bitching bitching about NWA..that they ONLY can fly NWA. " Wow, im surprised because, i live in michigan, and 2 of my
32 Sllevin : The fact the WN gave up gates should be a significant reality check. When was the last time Herb's crew set money on fire? Steve
33 Acvitale : I expect the FAA and DOT will make mince meat of this agreement and criminal investigations could occur... Further, When Spirit is ready to expand soo
34 IndustrialPate : Again, Vyas is an idiot, the Free Press sucks when it comes to aviation-related stories (maybe because Vyas writes for them...) and this story was not
35 Iflewrepublic : IndustrialPate... Thank you for taking the time to clear up the information on this issue. I just wish people would read what is being printed here by
36 DCA-ROCguy : Until NW’s repaid every penny they spent on construction of the terminal, IT IS THEIR’S. For the third time, I wasn't talking about the Wo
37 IndustrialPate : As long as Wayne County is free to do non-NW related things, with no NW financial involvement, without NW's approval, there's not likely any Constitut
38 NWAFA : Dear Iflewrepublic: I think you did hit it on the head..NW has been the one to pick on. Trust me I have a Sister who flies for UAL and a brother that
39 Phatfarmlines : WN, well they are just trailer trash in the sky. People that fly and work for them are the ones that lack professionalism...Tact....Manners. In so man
40 Northwestair : I was in DTW last week attending a conference at the Westin (very nice hotel) I noticed that LH departs out of the new NW World Gateway Terminal. I fi
41 IndustrialPate : NW agreed to consolidate the FIS into the WorldGateway, and set-up ticketing positions / signage for BA & LH. However, both carriers demanded lounges
42 AAJAXFlyer : While this is your opinion and you are entitled to it, I would like to remind you of the many BMW's, Jaguars, and Mercedes that one may see at a subu
43 Isitsafenow : IndustrialPate and NWAFA..thanks and kudos to you.. I live in Michigan, am silver E 13 of the last 14 years with nw, used the new(and old) terminal hu
44 Md80spirit : Spirit has said that they will need at least 14 gates for its growth plans for the next 5 years.
45 PSU.DTW.SCE : Spirit is one of the reasons the new Davey terminal has been held up. They can't make up their mind with what they want. When they finally decide on t
46 Howdy : Interesting posts and nice read. Thanks.
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