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."

FMI: www.atlanta-airport.com