Delta Air Lines and the Atlanta airport are closing in on a new long-term lease deal that will affect the airport’s revenue stream, expansion plans and competition for at least the next two decades.
It also aims to keep Delta from moving its headquarters out of metro Atlanta and prevent the city of Atlanta from opening a second commercial airport — though neither has indicated any desire to do either of those things.
The proposed 20-year lease between the airport and Delta, its biggest tenant by far, was introduced to the Atlanta City Council this week as a resolution. It will be weighed by the council’s transportation committee, followed by the full council.
The deal would follow a seven-year lease extension that expires in September 2017. The proposed new lease extends through June 2036, with an option for a 10-year extension.
It comes as Delta CEO Richard Anderson, who has a close relationship with Atlanta Mayor Kasim Reed, prepares to retire May 2.
The city owns and operates Hartsfield-Jackson. Delta and airport negotiators have worked for months on the new lease.
The next transportation committee meeting is scheduled for April 27. A full council vote would not happen before May 2.
The proposed lease outlines how Delta will pay landing fees and lease rates, a major component of revenue needed to pay for expansion projects as well as operations.
Airport general manager Miguel Southwell has said he wants to keep lease rates among the lowest in the country, though dollar figures are not specified in a copy of the lease agreement obtained by The Atlanta Journal-Constitution.
When it comes to airline competition, the lease grants preferential use to airlines for some gates and designates some gates as common use. If an airline’s usage of preferential use gates does not meet established standards, the city can offer them to another airline.
That can become an issue when a new airline wants to enter a city. The details of how airlines get gate space led to a lawsuit involving Delta and competitor Southwest Airlines at Dallas Love Field.
Atlanta city council member Felicia Moore, who sits on the transportation committee, said “I’m hoping that we take time to evaluate it… to understand what’s in the agreement” and address issues of contention.
The proposed lease includes language that states that Delta agrees to maintain its headquarters in Atlanta or within 15 miles of the airport. If it does not, the airline would be in default of the agreement.
It also states that the city of Atlanta “does not currently plan to and will not own or operate any other commercial service airport” other than Hartsfield-Jackson, “and will not include any other airports of any type, as a part of any City airport system,” according to the agreement to be weighed by the city council.
Delta opposes a second airport in the region, arguing it would divert resources from Hartsfield-Jackson, where it has its biggest hub.
