As Delta Goes, So Goes Atlanta's Airport?
It's a symbiotic relationship that's
all too familiar to airport managers. Just ask Ben DeCosta, the
general manager at Atlanta's Hartsfield-Jackson International
Airport.
"The airport does well because Delta is here, and Delta does
well because the airport is here," he says.
But what if Delta wasn't doing so good (hint: it's not)? The
airline continues to struggle, spilling red ink by the bucket-load
as it wrestles with high labor costs and the rising price of fuel.
And then there's the airline's staggering debt load -- Delta
Airlines owes $20.6 billion.
So it's perhaps not an unfair question to ask what happens to
Hartsfield if Delta bites the bankruptcy bullet?
"I don't believe that Delta is going
to go into bankruptcy," DeCosta tells the Atlanta Business
Chronicle. But even if it does, DeCosta thinks Hartsfield will be
Delta's Alamo. He believes Delta would shut down its other hubs
first -- including those in New York, Cincinnati and Salt Lake City
--before curtailing operations in Atlanta. "Obviously, bankruptcy
is to be avoided if at all possible," says airline spokesman John
Kennedy. "Our goal is for Delta to regain its competitive position
in the industry in order to achieve long-term sustained
profitability."
Delta's financial picture is considerably gloomier when you look
at the money it pays its pilots. Delta pilots make at least 50
percent more than their counterparts at other airlines, after the
company signed a new contract with them just before the 9/11
attacks. The contract is amendable in 13 months, but Delta pilots
seem to be in no mood to bargain. When asked for a concession of
about 30 percent in pay and benefits, the ALPA countered with an
offer to cut about nine percent from the current contract and to
forego a raise scheduled for next month.
And that brings up some bad memories for some Atlantans. Bad
labor relations were to blame for the 1991 demise of Atlanta-based
Eastern Airlines.
"Obviously, bankruptcy is to be avoided if at all possible,"
says Ralph Brubaker, who teaches law and bankruptcy at Atlanta's
Emory University. "Our goal is for Delta to regain its competitive
position in the industry in order to achieve long-term sustained
profitability." If Delta does go belly-up, Brubaker thinks there
will be plenty of those guys the majors love to hate --low-cost
carriers -- just waiting to snap up Delta gates. "Atlanta is the
world's busiest airport and it's a major hub and it always will
be," he says. "Even if Delta were to go into bankruptcy and their
flight frequency were to go down, low-fare carriers would retrench
and take up the slack and soften the blow."