Penalty Likely for United in Indiana Deal
United Airlines likely will have to pay Indiana state and local governments millions of dollars in 2002 for failing to meet spending goals in an economic development agreement, a United spokesman said Saturday.
“We have fallen short of our capital obligation, and we are going to pay a penalty,” spokesman Joe Hopkins said.
The airline estimated earlier this year that the penalty would be $32 million, but the final amount has not been determined, Hopkins said.
The penalty is in connection with an agreement calling for United to build a major maintenance facility at Indianapolis International Airport in return for $294.5 million in incentives from the state and city.
United has spent $536 million on the facility, short of the $800 million it had agreed to spend.
United’s penalties could rise over the next several years if other provisions, such as hiring goals, are not met, Hopkins confirmed. The Chicago Tribune reported that the airline could have to repay a total of $190 million.
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