Of the top 10 U.S. metropolitan areas, there's only one without a secondary passenger airport according to FAA and Census data. Unlike most other large cities, Atlanta has only one large commercial airport: Hartsfield-Jackson Atlanta International Airport, which serves as a major hub for Delta Air Lines (NYSE:DAL).
But another group has pushed to open an airport northwest of Atlanta for commercial passenger traffic. So far, their efforts have been unsuccessful, but is Delta Air Lines to blame?
Protecting your turf
No one likes having to battle extra competition and one way reducing competition can be accomplished is by controlling a large percentage of the slots able to serve a particular city. By controlling these slots, an airline can reduce the number and, consequently, variety of flights serving that area.
Regulators have taken action here and have made slot divestments a key part of the recent mergers between major airlines. In the merger between United Airlines and Continental Airlines, which formed United Continental Holdings (NASDAQ:UAL), the airline agreed to lease 36 slots at Newark International Airport to Southwest Airlines (NYSE:LUV)to settle demands from regulators.
When American Airlines planned to merge with US Airways last year, the Department of Justice filed a lawsuit to block the merger, but the case was later settled with slot divestments from the new American Airlines Group (NASDAQ:AAL) at several major airports.
Delta Air Lines has already noted its opposition to Paulding Northwest Atlanta Airport handling commercial passenger traffic with Delta CEO Richard Anderson saying last year, "With the city of Atlanta and Mayor (Kasim) Reed, we will work together to oppose any investment in that facility," according to the Atlanta Journal Constitution.
Is it unfair?
There's nothing wrong with Delta Air Lines being against a second airport opening for commercial traffic in and of itself. The airline maintains that its opposition stems from a concern over the use of taxpayer dollars, city land restrictions, and the use of scarce federal funds. But the real question regulators would care about is whether the airline engaged in any tactics that violate the law.
Recently, Reuters reported that the Department of Transportation was looking into whether Delta engaged in "unfair and deceptive practices" in their effort to prevent expansion at Paulding Northwest Atlanta Airport.
However, this is not an official DOT investigation -- the department is looking into a complaint received by Transportation Secretary Anthony Foxx. Following growing press coverage of Delta and the DOT, the department said, "We are not focusing on any particular entity. We are simply trying to assess the facts." Adding another layer of complexity to the Paulding Airport debate is that Delta and the county have both asked the Transportation Department to investigate the other side.
Although Delta and Atlanta mayor Kasim Reed continue their opposition to the Paulding Airport expansion, Reuters reports that the FAA has cleared the way for the environmental study of the expansion to begin. With this being one of the last major steps before expansion can begin, expect both sides to continue their campaigns for and against this airport expansion.
Delta Air Lines clearly has an interest in stopping commercial expansion at Paulding Northwest Atlanta Airport, but there is no clear evidence that the airline ever moved outside the law in its actions. That's not to definitively say the airline never did so, but there is not enough public evidence at this point to support such a conclusion, and the DOT does not appear to be targeting Delta in an investigation. Furthermore, there are other legitimate concerns about airport expansion including cost to taxpayers and land use that have led to groups besides Delta, including Atlanta's mayor, opposing the Paulding Airport expansion.
The fight over the future of this airport is far from over, and investors should join DOT officials in keeping a close eye on this situation.