Hartsfield-Jackson's proposed 20-year lease with Delta ties into expansion

Credit: Kelly Yamanouchi

Credit: Kelly Yamanouchi

Hartsfied-Jackson International Airport is seeking approval of a proposed 20-year lease deal with Atlanta-based Delta Air Lines that it says ties into a planned expansion including construction of Concourse G and new parking garages.

If the Atlanta City Council approves the Delta lease deal, the Atlanta airport plans to immediately embark on work for Concourse G, including planning. The project to build another international concourse is expected to cost $983 million and take until 2023 to complete.

New parking garages are aimed at fixing a shortage of parking at the airport today. The domestic Terminal South parking garage is often full and must turn away cars, causing inconvenience for travelers.

The airport plans to demolish the existing garages and build new ones in their place, doubling the size of the Terminal South garage to eight levels. But the Terminal North garage will be four levels, with the ability to expand to eight if necessary, according to Hartsfield-Jackson general manager Miguel Southwell.

The Atlanta airport spent more than a year in negotiations with Delta. The proposed lease, which includes an option for a 10-year extension, includes a covenant by Delta to keep its headquarters in Atlanta.

Credit: Kelly Yamanouchi

Credit: Kelly Yamanouchi

"At the end of the day, I believe we have the best agreement the city could have gotten," Southwell said to city council members on Monday.

While overall costs increase as the airport expands, the deal also keeps airlines' cost paid to the airport per passenger roughly the same.

Delta spokeswoman Betsy Talton said the deal is good for the airline's employees and workers at the airport, and for "Atlanta’s position as the economic bedrock of the southeast."

Southwell said he wanted to ensure that "Hartsfield-Jackson remains one of the most cost-competitive airports in the country. That is so important.... We know [airlines] wanted the lowest rates possible."

But he said the airport is also restructuring the lease agreement "so that the airlines will pay more. And they will pay more, significantly more," giving the airport more flexibility as it expands, he said.

That airport originally had $7.4 billion in projects, Southwell said, but excluded some to reach a $6 billion capital expansion program agreed to by the airlines. Excluded is Concourse H, a project that would be revisited in future years to determine if it is necessary.

But the airport is expanding with five more gates on Concourse T and the construction of Concourse G.

Southwell said more gates are necessary to accommodate other potential airlines that may want to come to Atlanta. He said the lease deal also strengthens the airport's ability to reclaim gates not being fully used by airlines.

Airlines could still block certain airport projects through what's called a majority-in-interest clause. Southwell said that measure will change in practice, to allow airports to proceed with projects unless multiple airlines vote against them. That's a shift in method from the current system that requires the airport to get airlines' affirmative approval.