Merger Bid Generates Questions about Future Clout of Atlanta Airport

a merger throws into question whether the combined company would maintain all the flights, gate leases and overall influence at the airport.


Lots of airlines fly to Hartsfield-Jackson International Airport --- but one dominates it.

Delta Air Lines has been king of the hill at the world's busiest airport since rival Eastern Airlines folded 15 years ago. Delta operates more than 1,000 of its roughly 4,000 daily mainline and regional partner flights out of the Atlanta hub, and it controls three times as many gates as its nearest competitor, AirTran.

Yet if US Airways succeeds in its $8 billion takeover bid for Delta, a merger throws into question whether the combined company would maintain all of those flights, gate leases and overall influence at the airport.

So far, the hostile bidder from Phoenix is saying all the right things. Doug Parker, US Airways' chief executive, said he regards the Atlanta hub as a strategic asset and plans to preserve Hartsfield-Jackson as a fortress.

"Atlanta is the key asset of Delta and would continue to be in the new Delta," Parker said in an interview last week.

But just how that "asset" will be used should US Airways prevail is unclear. A merger might result in the loss of Delta's Atlanta headquarters even if the hub survives, although US Airways hasn't shown its hand regarding a headquarters location.

Absentee ownership would raise questions for the Atlanta hub. Would US Airways care as much about the Atlanta airport as Delta, the biggest tenant, has for years? Would it cut the number of Delta routes and gates here? And how would it balance its existing hub in nearby Charlotte with Hartsfield-Jackson?

One or the other would have to give for the merger to achieve its purported cost and operations benefits, analysts say.

"It's a hard fact of economic life that there will be winners and losers in airline consolidation," said Dan Petree, dean of the college of business at Embry Riddle Aeronautical University in Daytona Beach, Fla.

"Atlanta has a very robust airport, and it's got good fundamental economics. But airline executives are human beings," Petree said. "They're highly interested in the welfare of the communities in which they live, and they tend to support the arts and education in those places.

"The fact that Delta has been based in Atlanta for so many years has clearly helped Atlanta," he said. "It's reasonable to question whether that would be the case if the decision-makers were somewhere else."

Political clout

As it is now, Delta is No. 1 at Hartsfield-Jackson --- by a long shot.

The airline and its regional partners lease 75 gates at the airport, far more than second-place AirTran with 26 --- a sore point with the latter, which has clamored for more.

Delta's presence --- both at the airport and through its headquarters --- also gives it outsized political clout. The airline was a prime backer of the fifth runway expansion, and when Georgia politicians floated the idea of privatizing city-run Hartsfield-Jackson to pay for multibillion-dollar sewer upgrades, Delta helped shoot down the notion.

Delta also has been a key player in just about all of the region's high-profile business successes since moving its headquarters here in 1941. Delta's deep roster of nonstop flights has helped the city attract new businesses, corporate headquarters and landmark events such as the 1996 Summer Olympics.

UPS, for example, said its 1991 decision to move to Sandy Springs was based in large measure on access to nonstop flights at Hartsfield-Jackson.

If US Airways is successful, or another carrier steps in to seize control of Delta, it would be mostly a psychological blow for Atlantans. Largely through Delta's international connections to Europe and Latin America, the city has come to regard itself as a world-class destination --- not just the biggest city in the Southeast.

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