We know there is lots of talk in Atlanta these days about fuel taxes. Given that Delta supports an increase in motorists’ gas taxes while nevertheless opposing an end to its tax break, we thought we might be able to provide some useful facts.
Hartsfield-Jackson Atlanta International Airport will remain a highly competitive airport if Delta’s tax break ends. Atlanta’s cost-per-enplaned passenger (CPE), a key economic indicator for airports based on landing and other fees, remains one of the lowest in the nation. Atlanta’s CPE is lower than other major Delta hubs in New York, Detroit, Minneapolis, Boston, Los Angeles and Seattle. Atlanta’s CPE has consistently ranked in the lowest quartile among the nation’s 25 biggest airports in recent studies. Atlanta’s CPE will not be affected by ending Delta’s tax break.
The per-gallon tax rate at Hartsfield-Jackson will remain at least 33 percent lower than similarly large hub airports at O’Hare and Los Angeles. In these rankings, Atlanta’s competitiveness will not change significantly; based on current rates, it will surpass only airports in West Virginia, Hawaii and Massachusetts.
If Georgia’s smaller airports are going to develop to be competitive in their own right, they will likely need the additional state revenue proposed. In 2012, the federal government doubled the amount that state and local governments are required to provide in matching funds to receive millions of dollars in federal airport grants, from 5 to 10 percent.
Indeed, a lot has changed since Georgia lawmakers first granted the jet fuel tax break to Delta in 2005. At the time, the break passed as a temporary measure intended to help the company as it struggled in part due to rising fuel prices. The tax break was extended several times before being made permanent in 2012, but not without controversy. Delta was criticized when, in 2011, the airline gave Gov. Nathan Deal and other state lawmakers free upgrades to platinum or gold frequent flyer status, worth thousands of dollars, shortly after approving an extension of Delta’s tax break.
A decade later, fuel prices have plummeted. Delta and the rest of the airline industry are in a much different place. Delta made $2.8 billion in profit in 2014. The North American airline industry anticipates profit of $13.2 billion in 2015.
Georgia is not alone in calling on airlines to now pay their fair share. Last week, legislators in hub airport states of Illinois and North Carolina advanced proposals to end handouts, loopholes and tax breaks for United, Delta and American Airlines.
We applaud the effort of Georgia legislators who insist that an end to Delta’s lucrative tax break be part of any funding solution that also raises money from everyday motorists.
