FAA: Some parts of new Delta lease "anticompetitive"

By Kelly Yamanouchi

The Atlanta Journal-Constitution

Amid criticism by the Federal Aviation Administration that the Atlanta airport’s proposed new lease with Delta Air Lines has potentially anticompetitive terms, Mayor Shirley Franklin acknowledged Wednesday the deal is “not perfect.”

“There are aspects of it that are considered favorable to airlines,” Franklin told a City Council panel. But, she said, “it builds on a successful model.”

Both Franklin and Delta Chief Executive Richard Anderson appeared at a council work session to speak in favor of the seven-year deal, which would replace a 30-year lease expiring next year. Franklin and Hartsfield-Jackson general manager Ben DeCosta want approval soon, in part because a new lease for the airport’s biggest tenant would help solidify funding for the new international terminal.

But the FAA said provisions in the draft could make it harder for rival carriers to expand at Hartsfield-Jackson International or enter the Atlanta market. In particular, the FAA cited a provision requiring airline approval for major projects, which could allow a dominant airline to block airport projects that could add capacity and allow more competition.

Franklin told the committee that “some people say it’s a partnership that will retard development, but Atlanta’s experience has been the reverse.”

The FAA said “it appears the lease will limit the city’s ability to accommodate a new entrant or existing carrier that wishes to expand at the airport.”

The agency criticized language that could prevent the airport from reclaiming gates that aren’ t fully used by airlines. The deal would allow that only if an airline’s daily average number of aircraft seats per gate falls below 600 -- a 20 percent decline for Delta based on current use, DeCosta told the council’s Transportation Committee.

“I believe the FAA may have a problem with that,” DeCosta conceded. “My personal opinion is 600 is too low a number and it would take a catastrophic event” for the city to reclaim gates from Delta.

The airport is negotiating a similar new lease with AirTran Airways, its second biggest tenant.

City Council approval is required for the deals at the city-owned airport.