Delta, city close in on airport deal

The Atlanta City Council transportation committee approved Hartsfield-Jackson International Airport’s proposed lease with Delta Air Lines Monday.

The decision came after the Federal Aviation Administration wrote in a memo that most of its concerns about the deal had been addressed. Four members voted to approve the deal, while members Felicia Moore and Kwanza Hall abstained, saying they wanted to continue discussions. Moore also wanted language added to the contract that the council be notified if the FAA has problems with the deal. The full council will take up the measure at its Nov. 16 meeting.

Committee member C.T. Martin, who made the motion to approve the deal, said the memo from the FAA is “pretty much what is driving my feeling that we should move on.” But he also raised questions about the lack of a covenant for Delta to agree to keep its hub in Atlanta.

“There is really no way for the council to make a change —- you accept it and hope that all the t’s are crossed and the i’s have been dotted and that it is in the best interests of the city as proposed to us.”

The FAA had raised some concerns about potentially anti-competitive provisions in the lease in a letter last month. The FAA said it met with Delta and AirTran Airways representatives to discuss updates to the draft seven-year lease extension.

“The response and revised agreement indicate that the agreement has progressed substantially toward resolving our prior concerns,” wrote Benito De Leon, the director of the FAA’s office of airport planning. But the memo also said some issues could arise later. One of the key issues was a long-standing provision that essentially requires that the airport get Delta’s approval for major capital improvements. The airlines pointed to other sources of funding for construction, according to the FAA. While the FAA and the Office of the Secretary of Transportation “remain disappointed” with the provision, “we believe its effect on limiting competition at ATL should be minimal in light of the availability of other sources of capacity funding.”

Another key issue was 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.

The FAA said “anti-competitive effects are possible when this usage level is based exclusively on number of seats.” It may restrict gate usage by airlines that don’t have hubs in Atlanta, the FAA noted. If an airline is denied access, “the metric might appear anti-competitive and trigger our further review at that time.”