Memphis looks to lure Delta flights

A feud over future operating costs between Delta Air Lines and the Atlanta airport could be good news for Memphis International Airport, a new Delta hub that’s eager to expand.

Memphis officials say they are not trying to take business from Atlanta but could provide a low-cost option to Delta if the airline wants to send more connecting flights through the Tennessee city.

“The airport is in constant contact with Delta, and they are very well aware of what we offer,” John Moore, president and CEO of the Memphis Chamber of Commerce, said Monday. “We sell ourselves as the best possible option for growth.”

Moore said Memphis has the runway and terminal capacity to double its flow of 10 million passengers a year.

He said Memphis currently charges airlines $5.91 for each passenger boarded. Atlanta currently charges about $5, but Delta officials contend the airport wants to raise that to about $10 a passenger. That number jumps to nearly $15 when a “passenger facility charge” that Hartsfield-Jackson assesses but Memphis does not is added, Delta officials say.

“If you put another 10 million passengers through here, you (Delta) save $100 million a year,” Moore said. “That’s not a small amount of money.”

Some Memphis officials, Moore said, have begun referring to the airport as “Terminal M,” implying it could become a sort of extension of Hartsfield-Jackson in coming years.

Delta, whose biggest hub and headquarters are in Atlanta, has raised an alarm over what Delta says is a plan to double airport fees for the airline under the airport’s capital improvement plan. Hoping to forestall such increases, Delta is suggesting it might move flights to other hubs if Atlanta costs soar.

It acquired the Memphis hub in last year’s merger with Northwest Airlines.

Atlanta Mayor Shirley Franklin disputes Delta’s fee projections, saying there is no proposal to sharply hike them.

The matter stems in part from concern about rising costs for the much-delayed new international terminal. Delta has long backed the project but is concerned its rising costs — now at about $1.6 billion — could compel the city to raise fees in the new lease.

Delta is the world’s largest airline, and Hartsfield-Jackson is the world busiest airport, handling about 89 million passengers annually. About 65 percent of those are “transfer” passengers, who simply change planes in Atlanta.

Theoretically, Delta could handle connecting passengers anywhere. But airlines need locally-originating travelers to augment transferring passengers, and Atlanta is a far larger market than Memphis.

Delta CEO Richard Anderson is set to meet with Memphis officials next month, but both Delta and Memphis airport say that meeting is not connected to the issue of Hartsfield-Jackson costs.

Delta officials say there is no immediate plan to shift flights to Memphis. Franklin has expressed optimism the airline and the city-owned airport can ink a new lease agreement.

AirTran Airways, the hub’s second-largest carrier, also opposes any fee increases by the Hartsfield-Jackson.

“The fact they have kept their costs low have made them the world’s busiest airport,” said AirTran spokesman Tad Hutcheson. “We are against anything that raises our costs.”