Delta extends lease agreement with Atlanta airport

ATLANTA - Delta Air Lines Inc. has reached a deal with the world's busiest airport to extend its lease agreement there through 2017, culminating sometimes testy negotiations between the two parties.

Terms of the deal between Atlanta-based Delta and Hartsfield-Jackson Atlanta International Airport were not disclosed Monday.

The agreement must be approved by the Atlanta City Council and Delta's board.

Earlier this year, Delta threatened to move some flights to other airports if it couldn't maintain competitive costs at the airport. AirTran Airways said it would consider doing the same if suitable new lease agreements couldn't be reached at Hartsfield-Jackson.

The two carriers represent roughly 93 percent of the traffic at the airport. AirTran said late Monday that it continues to talk with the city of Atlanta, which runs the airport, as part of its effort to reach a new lease agreement.

The other 7 percent of traffic there is split between other carriers including AMR Corp.'s American Airlines, US Airways Group Inc., Continental Airlines Inc., UAL Corp.'s United Airlines and several foreign carriers.

Atlanta Mayor Shirley Franklin said in a statement that the city anticipates that AirTran, a unit of Orlando, Fla.-based AirTran Holdings Inc., and the other airlines that serve Hartsfield-Jackson will shortly enter into similar lease extensions.

The current master lease agreements that apply to airlines at Hartsfield-Jackson do not expire until September 2010, but talks between the sides have been ongoing for months.

According to the airport, all the airlines that do business at the facility are expected to generate about $160 million in airport revenue in 2009, including property leases and landing fees.

One of Delta's concerns has been the price of an ongoing project to build a new international terminal at the Atlanta airport and how that might factor into the amount of the airline's future costs for using the airport.

Construction work on the international terminal project began last summer and is scheduled to be completed by 2012, airport officials have said. The project was previously projected to cost more than $1.6 billion, but the airport has cut its projection to $1.35 billion. The airport said it was able to cut materials and labor costs.

The plan for the Maynard H. Jackson International Terminal was part of a broader expansion project at the airport that included a fifth runway. The runway was completed in May 2006.