Newspaper article THE JOURNAL RECORD

Northwest Hits Snags in Midway Airlines Bid

Newspaper article THE JOURNAL RECORD

Northwest Hits Snags in Midway Airlines Bid

Article excerpt

ST. PAUL, Minn. (AP) _ Northwest Airlines said Monday that its proposed $153 million purchase of assets of beleaguered Midway Airlines has been jeopardized by inaccurate data from Midway and environmental concerns.

"We've encountered a number of problems ... and we have to simply resolve these issues," said John H. Dasburg, Northwest president and chief executive officer. "If we don't resolve these issues, then we cannot go forward and close on Midway."

The problems described by Dasburg as "quite serious" came as Northwest closed a separate deal with the state of Minnesota on a $744 million financing package for two maintenance facilities.

The agreement, which could lead to the creation of 2,000 new jobs, ended months of negotiations and a bidding war that attracted proposals from many other states.

Concerning the Midway deal, Northwest said data provided by the Chicago barrier on its traffic and passenger revenue was inaccurate, and that it had uncovered potentially serious environmental problems at Midway's base at Chicago's Midway Airport.

"The data supplied by Midway to the DOT (federal Department of Transportation) and us on traffic and yields we believe ... were inaccurate, to say the least," Northwest spokeswoman Amy Spreeman said.

Spreeman said she could not disclose the figures Midway provided and how Northwest officials determined they were inadequate.

"We also found some very serious environmental problems, underground storage near Midway hangars," Spreeman said in a telephone interview from Northwest's headquarters in Eagan, Minn. However, she said she could not elaborate on those problems.

Midway chairman David R. Hinson said the airline "vehemently denies"

providing any false information, and accused Northwest of imposing "new conditions" on the proposed purchase.

"Midway remains prepared to continue negotiations with Northwest in good faith," Hinson said in a written statement.

If the Northwest purchase collapses, Chicago-based Midway might be forced to liquidate quickly. …

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