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.


The new owner would almost certainly keep operating a huge connecting hub at Hartsfield-Jackson, offering travelers a similar level of service. But the timing would not be good, given that Atlanta also has been wounded by a litany of recent corporate losses including Georgia-Pacific, BellSouth, Scientific Atlanta, the closure of Hapeville's Ford plant, and the pending shutdowns of Doraville's GM plant and two Army posts.

Overblown link?

Richard Aboulafia, airline analyst at the Teal Group, said the value of close relationships between corporate and civic leaders is overblown.

Airlines answer to shareholders, he said, not the communities in which they operate. Atlanta and other locales must make solid business cases for expanding routes or adding jobs because airline investments aren't charity.

"Delta Air Lines and the new South grew tremendously after World War II, and Atlanta has been the epicenter," Aboulafia said. "Those things would have happened with or without Delta. It didn't hurt that Delta's headquarters was is in Atlanta, but it wasn't the cause. Atlanta's economy and population made it a sensible place to expand --- and that's still the case today."

Aboulafia and other experts believe a US Airways-Delta combination would face difficult operational choices.

US Airways' connecting hub in Charlotte is about 30 minutes by air from Atlanta, and it's likely to make cuts there if it acquires Delta. Charlotte charges lower landing fees than Atlanta, but it has smaller terminals and two parallel runways instead of five. It handles 28 million passengers instead of more than 80 million, and has two foreign passenger carriers instead of six.

Parker, the US Airways CEO, said he doesn't plan to close either hub but would trim connecting traffic served by the two hubs to cut costs.

Mike Boyd, an aviation consultant in Evergreen, Colo., predicted that Hartsfield-Jackson's traffic levels would suffer short-term as a result. However, another aviation expert, Robert Mann, of RW Mann & Co. in New York, predicts the Charlotte hub would likely lose its status as a hub.

The two airlines' networks also conflict in the Northeast, where Delta has an international hub in New York and US Airways operates trans-Atlantic flights from Philadelphia, and in the West, where Delta has a Salt Lake City hub while US Airways has one in Phoenix.

"New York and Philadelphia draw from the same catchment area," Aboulafia said. "One of those has got to give."

JPMorgan analyst Jamie Baker speculated in a report that a Delta-US Airways linkup would allow "re-anchoring much of Delta's un-fed [New York] international flying to US Airways' feed-rich Philadelphia hub."

US Airways plans to cut about 10 percent of the combined network, but airline officials declined to identify where the reductions would take place.

Petree said Atlantans should evaluate any proposed airline combination in terms of whether it makes carriers here more competitive in a future that's likely going to include a good deal of consolidation among U.S. passenger carriers.

"There are going to be fewer legacy carriers in the future than there are today," he said. "There's strong pressure for consolidation.

"But no one knows how many network carriers the market will support or which ones will survive."

BATTLE OF THE HUBS

US Airways says it would keep its hub in Charlotte and Delta's in Atlanta if its takeover offer succeeds. But analysts say cutbacks at one or both are almost assured. Here's a look at the two airports:

Hartsfield-Jackson International Airport

* World's busiest airport

* 86 million annual passengers

* About 1,350 daily departures

* Five parallel runways

* Eight foreign carriers (Air Canada and Jazz, Air Jamaica, British Airways, Air France, KLM, Korean, Lufthansa)

Charlotte Douglas International Airport

* 11th in number of flights

* About 28 million annual passengers

* About 700 daily departures

* Two parallel runways

* Two foreign carriers (Air Canada, Lufthansa)

Source: Airports Council International



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