Airport adapts to deregulation, aims to outstrip O'Hare
Atlanta — It is hard to imagine a city more involved with, and more dependent on, its airport than is Atlanta. If railroads put Atlanta on the map during the last century, the airlines have put it on the globe during this century.
John Portman tells how a few years ago his worldwide architectural firm decided to consider moving from Atlanta. ''We said, 'This company can be anywhere it wants to be.' But we finally decided we should stay here. Because of the Atlanta airport.''
''Air service is the single most often mentioned reason a company makes a relocation decision in the Atlanta area,'' says George Berry, a former airport commissioner and currently state commissioner of industry and trade.
There are lots of Sunbelters who regard having to change planes in Atlanta as one of the principal drawbacks of the Air Age.
''But we who know the Atlanta airport love it,'' says John Imlay, chairman of Management Science Atlanta, a software company. Of MSA's 1,650 employees, he says, ''We have 300 in the air at all times.'' Roughly 80 percent of the US population is within two hours of Atlanta by air; this has led to something the Wright brothers never dreamed of, the transcontinental day trip.
Hartsfield International Airport aims to take over Chicago's O'Hare as the world's busiest within a few years. The new Midfield Terminal is the world's largest; its internal subway is a major rapid-transit system in terms of passengers carried - more than San Francisco's BART, for example.
Although Atlanta traffic isn't dense enough in any one market to make for fierce competition and bargain-basement fares - as on the New York-London route, for example - officials reckon that metro Atlanta has the highest per capita air service of any city in the world. One important beneficiary of this high level of service is the convention industry; Atlanta is the nation's No. 3 convention city, largely because of air access.
Atlanta-based Delta Air Lines pioneered its now widely imitated hub-and-spoke routing technique here. Short-haul flights bring passengers from smaller cities into a central ''collection point'' for more efficiently loaded long-haul flights.
''Atlanta is always going to be the premier air city of the Southeast,'' says Alan Jenks, publisher of Jenks' Southeastern Business Letter. ''But it has lost much of its comparative advantage due to deregulation.''
He and others argue that it's now easier to get from one mid-size city to another, either directly or via a hub other than Atlanta. Piedmont Airlines is an oft-cited example. Once under regulatory mandate to pick up passengers in the Piedmont region and ''feed'' them, in effect, to Delta and Eastern in Atlanta, Piedmont now delivers passengers to their final destinations in a variety of cities, via its new hub in Charlotte, N.C.
But under deregulation, says Delta marketing expert Robert Coggin, ''We've had an opportunity to serve Seattle and Portland on a nonstop basis, and we've been adding small spokes such as Raleigh, N.C., Greensboro, N.C., and Norfok, Va.,'' thereby replacing Piedmont's feeder service. ''The down side, of course, is that deregulation has diverted traffic away from the hub.''
But Delta and Eastern, which between them account for more than 90 percent of Atlanta's passenger emplanements, profess to be unconcerned by the new hubs.
''Eastern is looking at 10 to 15 new markets,'' says Harold Holt, the airline's top man in Atlanta, ''but we don't know which we'll be going into. Profitability is the key. We haven't seen the full impact of recovery.''
The airline industry nationwide has suffered overcapacity at a time when recession was cutting demand for air travel. The resulting loss in revenue has put a number of airlines, including Eastern, in serious straits. And even Delta, the most profitable airline in the world, posted its first annual loss for the year ending June 30.
''But the industry got smart in April,'' says Robert Oppenlander, senior vice-president for finance at Delta. ''Before then, the basic fare systemwide was $99. We've learned you can't make money on that. Now we've rationalized fares back to normal.'' Bookings have been up the last couple of months, and higher fares are thus leading to higher yield and a brighter outlook.