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Airport still drives Georgia economy

Gov. Sonny Perdue will mark the grand triumph of his administration later this month. He will join corporate executives of Kia Motor Co. to break ground for a 2,500-job auto assembly plant in West Point.

The ceremony may serve as the de facto kickoff of Perdue's re-election campaign. His critics will carp that the governor gave away the taxpayers' store ($400 million in incentives or $160,000 per job) to land the factory. No matter. Perdue and the Peach State won a major industry - finally. They can only hope that Kia is the beginning of a trend.

However, the Kia project ought to remind our elected leaders that neither the governor nor his goodies were the No. 1 factor in collaring the company. The Atlanta airport was.

Kia executives have said as much. They regularly fly in and out of Hartsfield-Jackson International Airport to drive to their regional headquarters in Montgomery, Ala. They spotted the plant site on their drive.

So while Perdue and his political advisers slap each other on the back, they ought to recognize the importance of the Atlanta airport. For the past 40 years, corporate executives have listed the Atlanta air hub as the single most important reason for moving here. When President Jimmy Carter approved Hartsfield for service to foreign capitals, international investments in our state mushroomed. As a result, hundreds of thousands of Georgians enjoy good jobs today.

Now the airport is in trouble. I should say that its principal tenant Delta Air Lines is in trouble - on life support and near death. Mired in Chapter 11 bankruptcy, Delta has been recording monthly losses in the $100 million range. Its pilots threaten their first strike against the carrier in its 75-year history. The price of fuel is skyrocketing. Delta is accelerating layoffs of thousands of workers.

The recent losses of the GM and Ford plants and several corporate mergers represent relatively minor economic disasters compared to the prospect of Delta going under - or even drastically reducing its operations.

The strategy for saving Delta from liquidation will be spelled out in a reorganization proposal to be submitted to the federal bankruptcy court in midsummer. Insiders say that plan will inevitably call for more cutbacks.

As Perdue is chauffeured to the Kia celebration, he ought to ponder Delta's tribulations and consider how he might avert the economic downturn they portend.

The reorganization plan, if approved by the court, will determine if Delta will continue to provide an extraordinary level of air service in Atlanta. For as Delta goes, so go Atlanta and much of the state.

The issue, put simply, is this: Will the reorganization plan include maintaining Atlanta as the principal hub in a classic hub-and-spoke air-transport system? The economic stakes could hardly be higher. Because of its Atlanta hub, Delta provides Georgians with air service roughly three times higher than we merit as an independent destination and departure point. Hordes of passengers from around the world fly daily into Atlanta to change planes to go on to their final destination.

The number of connecting flights makes the Atlanta airport among the busiest on the planet. Maintaining that status is vital. This is where the governor might play a role.

Perdue could take the unprecedented step of asking the bankruptcy court for permission to present to the judge Georgians' interests in developing Delta's reorganization plan.

The bankruptcy court provides for "stakeholders" to help shape the Chapter 11 reorganization plan. These stakeholders include secured and unsecured creditors as well as unions and the pension plan representatives. Perdue could reasonably argue that Delta's greatest stakeholders are the citizens of Georgia. Millions of Georgians derive their incomes directly or indirectly from Delta.

To its credit, the 2005 General Assembly approved tax concessions to the airline to try to keep the Atlanta hub intact. Another Delta aid bill failed this year. Airport officials have assured the public that "contingency plans" have been prepared to deal with any outcome. In truth, no contingency plan is sufficient to cope with the economic fallout of a major reduction in Delta's activity at the Atlanta airport.

As the governor zips past the airport to take credit for Kia in west Georgia, he ought to consider what is transpiring in Atlanta.

An anonymous group of lawyers and financial analysts is meeting to determine Delta's fate and possibly Perdue's long-term economic legacy. A visionary governor would certainly seek a place at their table even as he turns the first spade of dirt for a new factory.

Syndicated columnist Bill Shipp writes on Georgia politics. Write him at P.O. Box 440755, Kennesaw, GA 30160, or e-mail bshipp@bellsouth.net. His Web site is www.billshipp.com. His column appears on Wednesday and Sunday.