Southwest and Frontier airlines have objected to Denver International Airport’s plan to pay off debt and deliver most of the relief to United Airlines.
The plan would mean United would get $22 million in annual relief, while Frontier would get $2 million and Southwest, $1 million.
DIA officials presented the plan last week to a Denver council committee. They said it assists all airlines at the airport while paying off over the next few years about $100 million in debt associated with unused and unneeded space for the original baggage system on Concourse B and maintenance space on Concourse A.
Money to pay off the baggage system-related debt would come from the federal $4.50 passenger facility charge, of which DIA receives $1.50.
Under the proposal, United must level off a capacity cutback that began several years ago and accelerated in the last quarter of 2011. United must grow capacity 4.5 percent and maintain that level through 2016 to receive the maximum benefit.
Letters sent this week by Frontier and Southwest raised questions about the plan’s legality. They ask that the city suspend further action until all the DIA airlines can understand the details and they can investigate the legal issues.
“The problem is that a significant portion of the deal is simply a marketing incentive directed solely at United Airlines,” Southwest vice president of airport affairs Bob Montgomery wrote in his letter.
Montgomery noted that DIA is prohibited under Federal Aviation Administration rules from giving one tenant airline “a discriminatory or exclusive financial/marketing agreement like the one negotiated with United.”
The plan would give United “powerful resources which they will use to compete with us,” Montgomery said in phone interview this morning.
“We do not want to take legal action against our partners — and the airport is one of our partners,” he said. “That’s absolutely the last thing we want to do, but there are some serious issues here.”
Ann Schrader: 303-954-1967 or aschrader@denverpost.com
