AirTran Rebuts Delta Complaints Regarding Witchita, Kan. Subsidy

After more than a week of silence, AirTran Airways called Delta Air Lines' claim that Wichita's subsidy to AirTran amounts to economic discrimination "bullying tactics."

AirTran also called claims by Delta that it is looking for a level playing field "humorous and disturbing."

In a letter to Mayor Carlos Mayans, AirTran said its chief rival failed to mention to Wichita City Council members that it orchestrated a special fuel tax break in Georgia that applies only to Delta and that it is seeking to change U.S. pension rules to defer its retirement payment obligations.

Delta officials met with the City Council last week to ask it to "level the playing field" and give subsidies to other airlines serving Wichita.

The council, however, approved a $2.5 million subsidy to AirTran for a fourth year of service. The county later committed to giving AirTran $1 million.

In its letter to Mayans, AirTran said that Delta had the opportunity to lower fares before the discount carrier began service in Wichita, but Delta "chose to stay off the Wichita playing field at that time."

The letter, signed by Kevin Healy, AirTran's vice president for planning and sales, said:

Delta did not tell the City Council that it received a special fuel tax break in Georgia that applies only to the carrier, which, like AirTran, serves its Atlanta hub, "hardly a level playing field."

Delta tried to change U.S. pension rules to defer for 25 years payments to its employees' retirement plans.

Before AirTran began serving Wichita, Delta offered four flights a day at "extraordinarily high fares." Since AirTran arrived, Delta added flights and matched fares.

Delta aggressively seeks public subsidies of its own, including most recently a $1 million revenue guarantee from Lansing Capital City Airport in Michigan.

Wichita's subsidy to AirTran became an issue when, upon Delta's request, the Federal Aviation Administration looked into the city's agreement with the carrier.

On April 6, the FAA sent a letter to the city saying it had discriminated against the other airlines and gave the city 30 days to tell the agency how it would remedy the matter.

City Manager George Kolb said the city is still gathering information and formulating a response.

"But we will definitely defend our position that we've done nothing wrong," Kolb said.

AirTran's lower fares have spurred more traffic at the airport, and "everybody has benefited, including Delta," he said.

Delta spokesman John Kennedy said the carrier does not respond to "other airlines' communication."

However, "the FAA has determined that the 2004 revenue guarantee with AirTran violated federal guidelines relating to economic nondiscrimination," Kennedy said. "All we have done is to request a fair and level competition in Wichita."

In the letter, AirTran called Delta's complaints to the FAA the "latest attempt by Delta to eliminate the competition."

Boyd Group airport consultant Mike Boyd called both carriers' actions "bare knuckles competition."

Delta "threw a punch, and AirTran is throwing a counterpunch," Boyd said.

The FAA's comments have raised an issue that there is a "gray area with where the funding came from," he said. "That's all this is about.

The bigger issue is that the airlines care about Wichita, Boyd said.

"If AirTran thought Wichita was a lost cause, they wouldn't do this," he said. "AirTran took a whale of a shot at Delta.... They wouldn't do that if they didn't think Wichita was valuable."