Delta Kills Competition, Atlanta Agrees Not to Build Second Airport

Atlanta is the busiest airport in the world. And don’t you dare call Hartsfield-Jackson airport just by the name Hartsfield.

In part the volume of passengers at Atlanta Hartsfield-Jackson is because, unlike other major metropolitan areas — New York, San Francisco, Miami, Los Angeles, Chicago, Dallas, Houston — the Atlanta area doesn’t have a second (or third) airport.

There’s been plans for a second airport since the 1970s when the city acquired about 10,000 acres in Paulding County (40 miles from the city) to build one. They still own the land. Allegiant, for one, has expressed interest in flying there should a single runway airport get built.

The new airport received FAA approvals in 2014 leaving only an environmental study in the way of final approval for commercial service that would justify building the facility. But Delta has been fighting tooth and nail against the facilityand finally drove a nail into its coffin.

There’s no negotiator in the airline business today like Delta. They squeezed American Express as its losing Costco for a new deal worth $2 billion even as the miles American Express buys are worth less. They squeeze airline partners into joint ventures. They squeeze aircraft manufacturers. That’s fair, of course. To borrow a phrase, in any 50-50 deal Delta takes the hyphen.

They also squeeze governments for subsidies. They extort politicians (and use carrots, too, comping elite status to Georgia politicians). They buy stakes in subsidized airlines. They take big subsidies directly.

Their government affairs capability pushes forward with the goal of reducing competition and raising prices. That’s behind their campaign to limit service to the US by the big Gulf airlines. It’s behind their opposition to a new airport in Atlanta.

As part of Delta’s renewal of its lease at the Atlanta airport, they got Atlanta to agree to kill the idea of a second airport which would have provided for competition.

It 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.

Make no mistake, anything Delta lobbies for is in its own cronyist interests — to protect and extend its advantages over competitors.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. This is how the system works. Large corporations like Delta buy off politicians and the consumer gets screwed. Atlanta desperately needs a second airport and it will never happen with so many corrupt politicians in Georgia. This is exactly what is breeding all the popularity for an anti establishment candidate like Trump.

  2. They should do everyone a favor and let Delta pack up and go
    Which leads to the question where would they go without Atlanta lol

  3. American and Southwest got a similar provision into the Love Field master agreement, blocking all parties from supporting a third airport in the Dallas area.

  4. @swag worse than that, the Wright Amendment boxed in Southwest for years and then the end of the Wright Amendment came at the cost of removing gates at the airport. Another cronyist disaster.

    http://viewfromthewing.boardingarea.com/2015/06/19/dallas-finds-itself-between-scylla-and-chaybdis-no-matter-what-happens-with-love-field-gates-theyll-be-sued/

    Lest anyone think I’m letting American off the hook on these issues…

    http://viewfromthewing.boardingarea.com/2016/04/07/americans-ceo-paying-attention-wrong-things/

  5. Delta is a fierce competitor, as they should be, but there are a heck of a lot of good reasons (for taxpayers!) why cities shouldn’t build additional airports. It’s usually much more efficient to expand existing ones.

  6. @iahphx you clearly dont understand Atlantas transit network (or lack therof) and poor roads infrastructure. Most of Atl’s flyer’s live in the northern suburbs while the airport is in the south. The additional transit time needed to get there is absurd. In addition, actually getting in and to the gates at ATL is a nightmare as well. A northern airport is very much needed and I would argue less costly than anything they could do to improve ATL. Atlanta is the only major city in the US that doesnt have a second airport and solely due to Deltas grip on it.

  7. This might be a dumb question, Gary, but what would prevent the government of Paulding County to independently build a commercial airport?

  8. Would have thought that government planned, funded, built, and controlled airports would have run counter to Gary’s view of the world.

  9. @LarryInNYC – it runs counter to the direction much of the world is going, with many European airports privatizing (disclosure, a member of my family acts for the private Sydney Airport Corporation). But it’s the way the world works in the U.S., Branson’s airport is privately managed but that’s very much an anomaly.

    I am not advocating here for a second Atlanta airport, within the context of how airports are provided for in the US it probably makes sense, but cutting a deal with the government to eliminate the possibility of competition is highly problematic.

    This is no different from the case of the US airlines vs the Gulf carriers. I’m no fan of the Gulf business model. Doesn’t mean I think there ought to be even more government intervention to further private interests.

  10. @swat @Gary

    You might want to do some research before throwing DAL into this conversation.

    1) Nothing prevents a 3rd airport in DFW, however WN would have to give up DAL gates if they were to build/use gates at another airport within 80 miles of DAL before 2025. There has been talk for years of having a new int’l airport in McKinney with the growth to the north. While IMHO unlikely, it has been talked about.

    2) WN wasn’t “boxed” into DAL. They chose not to move to DFW and were successful via litigation. So then Dallas and Fort Worth got the Wright Amendment put into place to protect DFW. After much belly-aching, WN got the Wright Amendment axed with the trade-off being 20 gates max at DAL with no non-stop international flights.

  11. Allowing the legacy airlines to merge into 3 mega-carriers was always going to have these anti-consumer results.

    Competition good, oligopolies bad.

  12. Uh-oh, while you’re correct that the thought police won’t have you leaving out “Jackson” from the name – you have to call ATL by its *completely* correct name Gary: “Hartsfield–Jackson Atlanta International Airport” You left out the “International” and heavens to betsy, the “Hartsfield-Jackson” part simply must go first!

    Off to the re-education camp with you…LOL

  13. Just because the city of Atlanta “does not currently plan to and will not own or operate any other commercial service airport”, any of the other metro counties such as Cobb & Gwinnett, with better tax bases & populations than the city could build a second airport. The biggest challenge would be convincing the residents that the noise & traffic congestion are worth it the headaches

  14. Gary, I think they need to build another airport in Austin North eventually.

    @Ken, Wouldn’t be such a bad thing to have an airport between Denver & Boulder.

  15. @Mo – They have one already, but it’s not a commercial airport. Private business jets only. Same for south side by 25/470, not a commercial airport.

  16. I think they already tried a plan to put Atlanta’s 2nd commercial airport in Gwinnett County (by expanding Briscoe Field) and were unable to convince the residents that the noise & traffic congestion are worth it, as someone mentioned above. Cobb County would have an even tougher time convincing residents, given the current widespread opininon there that the new Braves stadium will have disastrous effects on already-bad traffic (and Cobb is already so densely populated that there aren’t places to put an airport) There was talk of expanding Cobb County’s local general aviation airport to allow for commercial flights, but that has been viewed as cost-prohibitive since land prices around it are sky high

  17. @Yeah Right: Philadelphia, Detroit, Minneapolis, Seattle, Denver, and St. Louis are sad that you do not consider them “major cities”.

  18. @petey STL – Small city; lots of empty gates; DET – Ditto STL; PHL – Has three airports used by ‘burbs: PHL, BWI, EWR; Minny and Denver – Also smaller markets that have big airports b/c they are hubs (DET similar but auto industry uses for Asian transit). ATL biggest market other than PHL and PHX with 1 airport. PHX doesn’t have corporate traffic for 2nd airport; PHL has relief outlets already.

  19. @bb I agree as a DFW traveler that McKinney isn’t happening in my lifetime; major growth in Dallas is inner core density and straight north/east of DFW. Most of the transit growth here, post Wright, seems to be international and budget. Should make for interesting times in DFW, but I suspect we’ll see gate expansion at current two airports instead of 3rd airport.

  20. As a resident of Paulding County, we’ve already seen the evidence of Delta’s overreach. They’ve paid for the high priced attorneys hired by a small group of residents that have beaten our government into the ground. Delta was the largest contributor to the campaigns of the anti-airport candidates and all the anti-airport advertising. Ohhhh, they’ve kept their noses clean. Sponsored it all by hiring high priced PR firms that actually bought the advertising. Its ridiculous how its played out here.

  21. @Yeah Right — With the affluent folks living in the north, I think the odds of a second airport being built in a CONVENIENT northern location approaches zero. Rich folks love their back yards, and several miles beyond them.

    To have a remote shot, you’d need something like that air force reserve based to be re-purposed — and even that would trigger a firestorm.

    Just spent a few billion more on mass transit: cities love that, even if travelers are lukewarm about it.

  22. I live in ATL and am no fan of Delta but the way they tried to build the second airport in Paulding was dirty. No citizen input and closed door votes by the county commissioners. There were open records lawsuits filed and the whole deal got shut down last year. The folks running the current airport were merely acknowledging that they wouldn’t try again. I frankly don’t think Atlanta could handle running 2 major airports, for a number of reasons, almost all involving the bush-league politics between rural and big-city at the state level and black vs white at the county and city level. Financing would have been a nightmare.

  23. I heard that Cobb is planning on selling some bonds and raising some taxes to build one next door to the new Cobb County Braves stadium. They figure that if 285 & 75 can’t handle traffic BEFORE the Braves… might as well put as much there as possible before the _____ hits the fan!

  24. This is why Trump is doing so well – because politicians everywhere can be bought and sold to benefit corporate interests. Ridiculous that DL can shut out competitors at expense of consumer. If DOJ/FTC wanted to do something useful they would investigation DL for anticompetitive behavior rather than wasting time on apple.

  25. The fact that Delta, as big of a company as it is, is afraid of competition in the Atlanta space, just goes to show that the focus is NOT on the customer but about selfish power and gouging prices. The fact that the flight options out of Atlanta are limited and that there is only one significant airport in the entire metro area of Atlanta is completely ridiculous. The spineless lapdogs who have the influence to change this structure are just as idiotic. There are approximately 5M ppl in the metro area having to be funneled to one airport because of Delta’s obsession to control the market. That structure is the most asinine ideal I have ever seen.

  26. As noted here indirectly, I maintain that the real issue in the U.S. aviation marketplace overall isn’t the lack of competition between the airlines, but the lack of competition at individual airports. Atlanta is a major market and a cash cow for Delta.

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