With traffic down 95%, Hartsfield-Jackson plans to defer airline rent

Dozens of commercial jets remained parked along a runway and taxiways at Hartsfield-Jackson on Wednesday, April 29, 2020. JOHN SPINK/JSPINK@AJC.COM
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Dozens of commercial jets remained parked along a runway and taxiways at Hartsfield-Jackson on Wednesday, April 29, 2020. JOHN SPINK/JSPINK@AJC.COM

With passenger counts down 95% and multiple concourses closed at Hartsfield-Jackson International, the airport manager plans to defer rent payments from financially strapped airlines.

Atlanta-based Delta Air Lines and other carriers have seen revenue plummet and are posting hundreds of millions of dollars in losses. They have received billions in federal stimulus funding from the CARES Act.

Now, Hartsfield-Jackson general manager John Selden said he plans to defer until January 1 airline payments for landing fees and terminal rent for April, May and June. The move, which must be approved by the City of Atlanta, follows rent relief granted for concessionaires and rental car companies from March through June.

Selden said Concourses B and E are closed, along with most of Concourse C and half of Concourse T. About 300 of the airport’s 340 concessions are closed.

He cited statistics for Tuesday's traffic at the airport, painting a picture of a skeleton operation at what used to be the world's busiest airport.

The number of flights was down 77%, to 570 instead of more than 2,500. The flights still operating are mostly empty.

The number of passengers that went through security checkpoints was down to 3,500 people, instead of the typical 70,000.

A total of 10,000 travelers passed through the terminal, including connecting passengers. In normal times, there are 310,000.

International flying took the biggest hit. Only 152 people were processed by U.S. Customs and Border Protection at the Atlanta airport, down from 20,000.

Of about 32,000 airport parking spaces, only about 3,000 are filled — many of them airport contractors who are temporarily allowed to park near the terminal so they can avoid taking crowded employee shuttles from a remote lot.

The airport was expecting to bring in hundreds of millions from terminal rent and landing fees this fiscal year, along with about $148 million in revenue from parking and $122 million from concessions.

However, “the airlines have consolidated operations,” Selden said. “Almost all of our concessions revenue is gone. Our parking revenue is almost gone.”

Hartsfield-Jackson is set to receive $338.5 million in federal stimulus funding to help replace lost revenue from the sharp decline in travel.

To get the money, the airport must continue to employ at least 90% of its employees through Dec. 31.

The City of Atlanta’s Department of Aviation, which runs Hartsfield-Jackson, has about 780 employees, according to the fiscal year 2020 budget.

The vast majority of the 63,000 workers based at Hartsfield-Jackson are employees of airlines, concessionaires and contractors. Concessionaires and contractors have already laid off hundreds of workers.

Airport concessionaires have pushed for extended rent abatement. “There is no way for our businesses to survive if we are forced to pay rent without passengers, and thus, sales,” said an Airport Restaurant & Retail Association report. “Without abatement, businesses both small and large will not survive this pandemic.”

Selden said, “The airport has certain bills that we have to pay,” and that a significant amount of the CARES Act funding must go toward continuing to pay the airport’s employees. He said the airport’s more than $500 million budget includes substantial bond payments.

He said it’s unclear how long the airport will need to use the federal stimulus funding to stay operational, “but we are planning to do this in a measured approach.”

If the airport has 50% of its regular traffic a year from now, “we would be in a good place,” Selden said. But without a vaccine, he said, that “is probably not even going to happen.”

“Sitting three inches apart from somebody on a plane for hours is probably going to be problematic,” he said.