Despite confusion, key issues remain in Delta airport lease
By Maria Saporta
Confusion reigned at a hastily-called work session Monday afternoon to discuss the proposed master lease agreement between the city of Atlanta and Delta Air Lines.
Members of the Atlanta City Council’s Transportation Committee seemed overwhelmed with the complexity of the issues, and they were frustrated that officials from Hartsfield-Jackson Atlanta International Airport had not prepared a clear presentation of the thorny issues in the agreement.
Instead of clearly describing the differences of opinion that exist on elements of the agreement, Hartsfield-Jackson’s General Manager Ben DeCosta showed his cautious lawyer side by talking around the issues.
Finally, Atlanta City Councilwoman Felicia Moore said enough, and she asked airport officials for information in writing.
Council committee members seem to understand the gravity of this agreement, but they seem lost in trying to sort out the complex issues involved and the implications of what they could mean for the city long term.
In short, there’s concern by the Federal Aviation Administration that the proposed agreement between Delta and the city would limit potential competition of other airlines interested in flying out of Atlanta.
Much of that concern revolves around whether Delta or the airport control the assignments of its gates. The airport wants greater flexibility on being able to assign gates to airlines on an as-needed basis. And Delta would like to keep a virtual lock on its gates to limit possible competition.
There’s concern that the proposed length of the agreement — seven years — is too long given the state of flux in the economy and the airline industry.
And there is concern about whether the airport would need Delta’s approval to make major capital expenditures, possibly new gates for new airlines. If Delta has veto power on those investments, then it can limit competition in that way.
There also are dire financial questions involved in this agreement. As the agreement is currently drafted, it’s possible the airport would be out hundreds of millions of dollars and could end up in a financial hole. On the flip side, Delta wants to do all it can to keep costs as low as possible.
Currently, Hartsfield-Jackson is one of the most efficiently-run airports in the country with some of the lowest costs for airlines.
At the work session, the most important question to me was whether the Atlanta City Council has the power to amend the draft agreement so it’s more favorable for the airport.
Atlanta Mayor Shirley Franklin said that it is the executive branch’s responsibility to negotiate the agreement and that the council has responsibility for oversight.
In talking to Delta and airport officials after the meeting, it is clear the council does have options to amend and improve the agreement.
First, it could turn down the agreement outright, which would force a restart in negotiations.
Second, it could approve the existing agreement with certain amendments. Then Hartsfield, the city and Delta would review those amendments and decide whether they still want to go forward.
It appears that all parties want to get a deal done by the end of this year.
The transportation committee will continue working on the agreement at its meeting Wednesday morning, and the goal is to have it come out of committee in late November or early December.
Let’s hope that by that time, council members will have zoned in on the key issues and come up with substantive amendments to improve the agreement.