Hartsfield-Jackson seeks to extend concessions contracts up to three years

Food courts are open for travelers at Hartsfield-Jackson International Airport on Thursday, July 2, 2020. (Hyosub Shin / Hyosub.Shin@ajc.com)

Hartsfield-Jackson International is seeking Atlanta City Council approval to extend concessions contracts for up to three years, putting on hold bidding on dozens of locations while the coronavirus pandemic causes uncertainty.

Airport restaurant and shop operators had to furlough or lay off hundreds of workers in March when most concessions locations closed. Travel plummeted amid stay-at-home orders and travel restrictions.

By June, the airport had halted the bidding process for new contracts for airport restaurants, citing the upheaval caused by the coronavirus pandemic. Contracting for airport concessions had already been delayed for years amid a federal investigation into Atlanta City Hall corruption. That allowed many existing concessions operators to get lease extensions on a month-to-month basis.

Now, the airport plans to extend agreements with concessionaires with active contracts for three years, and extend deals with concessionaires operating month-to-month for two-and-a-half years.

Hartsfield-Jackson General Manager John Selden told city council members last month that contracts should be extended because of “an inability to get new concessionaires out on the terminal.” Right now, many aren’t able to get financing for new locations.

On Wednesday, Selden said extending the contracts “allows us to have a continuing business going forward for our passengers here at Hartsfield-Jackson during the pandemic.”

He said the airport plans to “analyze the financial landscape” over the next 18-24 months, then determine whether to put concessions locations up for bid.

“The future is very uncertain, and giving our concessionaire partners a little consistency” will help “bring their businesses back here to Hartsfield-Jackson” Selden said. He added that extending the contracts would allow concessionaires to make up for revenue lost during the pandemic.

Selden said if there is a vaccine and a strong recovery sooner than expected, the airport has 19 vacant locations it could up for bid. That includes 10 spots that were used as smoking rooms before the city of Atlanta passed a smoke-free ordinance that banned smoking at Hartsfield-Jackson, as well as airline space returned to the airport.

Council member Marci Collier Overstreet co-sponsored the legislation to extend concessions contracts, calling it a “necessary” move. “There are no trends right now that lead us to believe that we have this under control and that we have a time certain where we can return to normalcy,” Overstreet said.

City council transportation committee chair Andre Dickens said the concessions contract extensions are also aimed at helping concessions employees keep their jobs.

The council’s transportation and finance committees voted in favor of the measure Wednesday, and it goes to the full council for a vote next month after the council’s recess.

The city council has already approved rent relief for airport concessionaires and airlines.

The transportation committee also this week voted to approve temporary rent relief for Signature Flight Support, which operates the private jet terminal at Hartsfield-Jackson.

Selden said the recovery in travel “has softened slightly, but we are still optimistic. ... It is coming back slowly.”

He said the airport is bringing more contractor staff back, contemplating reopening more sections of concourses and working with concessionaires to possibly reopen some locations in the airport atrium.

Delta Air Lines, the largest carrier in Atlanta, had planned to add back flights to grow its flight schedule from 450 departures a day to 650 a day by August, according to Selden.

But Atlanta-based Delta is scaling back its growth plans, and Selden now expects the airline will operate 600 daily departures from Atlanta in August. Before this year, Delta had operated as many as 1,000 daily departures at the airport in its busy summer schedule.

Selden said some foreign carriers have delayed plans to bring flights back to Atlanta until September.

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