Why the State Can’t Just Takeover the Hartsfield-Jackson Airport

In December, the Senate Study Committee released its findings regarding a potential takeover of the Hartsfield-Jackson Airport. The Senators supported a state takeover, citing management structural issues with a city managed airport, a federal bribery scandal engulfing Atlanta and a Federal Aviation Authority probe into Atlanta’s misuse of airport funds. Now, those Senators are gearing up for a political fight to wrangle the airport free of Atlanta’s hands. However, as the members of the Senate fight the political battle to win over the rest of their chamber, the State House, and the Governor’s office on the policy, a much larger impediment stands in the way. Federal Preemption.

The final decision maker in an airport transfer is not the state government, but the federal government. Both North Carolina’s Charlotte Douglas International Airport and Mississippi’s Jackson–Evers International Airport are recent examples of state government takeover attempts being thwarted by the Federal Aviation Authority and the court system.  In both instances, a Republican state government attempted to change ownership of an airport controlled by a Democrat-controlled municipality without the approval of the FAA, and the courts blocked the transfer due to federal preemption after the city flooded the courts with legal challenges to the transfer. North Carolina and Mississippi both made the mistake of pushing through state transfer legislation before the FAA had approved the transfer.

Moreover, following the hostile state takeover attempts in Charlotte in 2013 and Jackson in 2016, the FAA issued new guidance on when it will accept an application for management changes to an airport. The new guidance makes it nearly impossible to transfer the Atlanta airport without the city’s approval. On June 6th, 2016, the FAA announced it would only accept management changes to an airport “upon a legally definitive resolution of a dispute,” absent a showing of substantial mismanagement or the consent of the current management of the airport. With a AAA bond rating and the title of the busiest airport in the world, a showing of substantial mismanagement of Hartsfield-Jackson airport is unlikely. Thus, under current regulations, the state either needs Atlanta’s consent or to win a lengthy court fight. A feat that has yet to end well for the state governments.

And rest assured, there are plenty of legal issues for the city of Atlanta to sue over and a legal battle over the airport will likely take as long as it has in North Carolina and Mississippi. Potential legal issues are numerous as Atlanta has been preparing for this fight for years. For example, in 2017, Atlanta signed new lease agreements with Delta Air Lines and Southwest Airlines that contained language barring a transfer of control of the airport. More problematic, the recitals to the lease agreement stated Atlanta’s maintaining control over the airport was a “material inducement” for Delta and Southwest agreeing to sign the 20-year leases. The pertinent issue is not whether that clause is enforceable, but that there are foreseeable legal questions that can stall the airport transfer in the court system, exhausting state interest and resources.

Without a change in the FAA guidance, an airport management change has next to zero chance without the cooperation of the city of Atlanta. The FAA’s position leaves the State Senator’s keen on replacing the airport governance only a few options.

First, the Senators can lobby the FAA to change their regulations. At the time of the 2016 regulation’s enactment, the Former Charlotte Mayor Anthony Foxx headed the U.S. Department of Transportation, which oversees the FAA.  As mayor of Charlotte, Mayor Foxx strongly opposed the North Carolina takeover attempt of the Charlotte airport. With the Republican party now in control of the federal agency and Mayor Foxx no longer in the picture, the FAA may be more malleable to state pressure to change that policy.

Second, the Senators can attempt to woo over the city of Atlanta. If the state attempted a takeover without the approval of Atlanta, the state would be committing to a multiple year-long fight and lobbying effort for FAA certification. However, with Atlanta’s approval, the state reopens the pathway to a state authority. Given Atlanta’s bargaining power, this could potentially mean granting Atlanta considerable power and board seats on the state authority governing the airport.

To frustrate the matter further, the Senators might be right on the policy, and independent research bolsters their claims that a state authority is the preferred management structure for an airport. A study by the consulting firm Oliver Wyman stated that a state airport authority would better manage an airport because of a lack of continuity and expertise of management in city-owned airports. The study suggests municipally governed airports are more likely to have changes in airport leadership because of local election results, especially in Atlanta’s strong mayor system of governance where the power over the airport is primarily vested in one elected official. Moreover, the study expresses concern city-owned airports are more likely to place city personnel, who don’t have a long history of airport experience, into high level airport management positions. The study was commissioned in 2013 by the City of Charlotte when the city was attempting to retain power over their airport from a takeover attempt by the state of North Carolina.

The ownership discussions of the Hartsfield-Jackson airport cannot be separated from the legal barriers to state ownership. Policymakers pushing for the airport transfer will need to address the legal realities early, else spend a political eternity tied up in litigation and injunctions.