March 2006
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Atlanta Airport Continues Operating During Airline Bankruptcies
By Triphenya Bailey

The general climate at the world's busiest airport has been one of attentive optimism since officials with Delta Air Lines and Northwest Airlines filed for Chapter 11 bankruptcy protection in September of 2005, citing financial losses in the billions.

Executives with Hartsfield-Jackson Atlanta International Airport remain confident that the nation's third largest airline, and one of the Airport's hub carriers, will be able to lift itself, its passengers and its employees above its current status.

"With the staggering cost of fuel and other impacts, Delta had suffered such significant losses that it couldn't sustain itself without going into bankruptcy," explained Mario Diaz, the deputy general manager of Hartsfield-Jackson and an experienced aviation professional who previously worked with the Port Authority of New York.

Delta joined a long list of airlines that have filed for Chapter 11 bankruptcy protection since 2000, when the United States began experiencing an economic decline, he said.

"In the wake of the downturn in the economy in 2000 and the events of September 11, 2001, several airlines, both domestic and international, filed for bankruptcy," said Diaz.

Hartsfield-Jackson executives saw Arrow Air, Midway, Swiss Air and Sabena Airlines close their Atlanta operations during 2001. The next year, United Airlines and Vanguard Airlines filed for Chapter 11 protection. Air Canada and US Airways, in 2003 and 2004 respectively, followed suit and filed for bankruptcy protection.

Some airlines have managed to turn their operations around. Air Canada, for instance, emerged from bankruptcy in 2004. US Airways, after merging with America West to create a low-fare carrier, rose from its bankruptcy in September of 2005. And just last month, on February 1, United Airlines emerged from bankruptcy.

Another factor contributing to changes in the aviation market was the brisk entry and rise in popularity of low-fare airlines like AirTran, Jet Blue and Southwest Airlines.

Diaz said the "impact of low-cost carriers" coupled with the customers' accessibility to airfare information contributed to financial challenges for many of the industry's legacy carriers. "The ubiquity of the Internet made available, to basically everyone, perfect information on the cost of airline tickets," he said.

According to Diaz, the beginning of the Iraqi War and subsequent dramatic rise in fuel costs also contributed to many carriers' bleak financial state of affairs. "Jet-A fuel has increased from a pre-2001 cost of about $27 a barrel to more than $120 a barrel," he said.

Diaz said that he and other executives at the Atlanta Airport remain hopeful about Delta's ability to turn its business affairs around. "With Delta's continued right-sizing and rationalizing of aircraft, we think they are headed toward a reasonable exit strategy."

© 2006 Hartsfield-Jackson News. A Publication from Hartsfield-Jackson Atlanta International Airport. All rights reserved.

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