Efforts to woo Indian and Chinese investors will only go so far without nonstop flights to those countries, the Atlanta airport’s general manager said as he pledged to do “everything in our power” to bring back direct connections to the world’s two most populous nations.
Miguel Southwell also singled out Israel as a focus of Hartsfield-Jackson Atlanta International Airport’s air service development program, into which the airport is pouring new energy and resources as it aims to drive the city’s economy forward, he told about 900 attendees at the inaugural State of the Airport luncheon March 11.
Mr. Southwell acknowledged that many factors are at play and that airlines are “not charities.” They need to see a compelling business case for starting and sustaining new routes.
“I’m certain that if an airline tells Atlanta and Georgia what it takes to earn their flights, Atlanta and Georgia will rise to the occasion as we have always done,” Mr. Southwell said.
Mr. Southwell didn’t give details on concrete steps to draw these particular flights or which airlines he’s courting, but airport spokesman Reese McCranie confirmed that airport leaders are planning a trip to India.
For the general manager, international routes aren’t there only to serve existing foreign investors; they are responsible for attracting more.
“You think Kia would be here if Korean Air wasn’t flying here?” he told Global Atlanta, referencing the Korean automaker’s plant employing thousands in West Point, Ga.
In remarks earlier in the program, Mayor Kasim Reed linked the presence of nonstop flights by Delta and Lufthansa to decision by hundreds of German companies to set up shop in Georgia and across the South, particularly the two luxury automakers who have North American headquarters in metro Atlanta: Porsche and Mercedes-Benz.
The Metro Atlanta Chamber and other groups have led frequent trade missions to India and China with mixed results. While Georgia has had some major wins, Chinese investment has been more a trickle than a flood. Some communities have won small distribution and R&D centers from well-known companies, but overall Georgia’s Chinese manufacturing investment has been relatively small, especially when contrasted with the success of neighboring South Carolina, which has no large international airport. Israeli investment has continued despite the suspension of the Tel Aviv flight.
That raises the question: just how important are these flights to bringing investment?
Craig Lesser, managing partner of the Pendleton Consulting Group who was integral to winning the Kia deal during his time as Georgia Department of Economic Development commissioner, said they’ve been critical.
“You can look at what has happened in the last 20 years and match it with Delta’s growth, and also match it with the growth of international delegations, international consulates and investment, as well as expanded trade,” Mr. Lesser told Global Atlanta.
John Ling, Georgia’s managing director for investment from China, said a nonstop flight would put Atlanta in a different league than other southeastern cities.
In his previous position recruiting Chinese investment to South Carolina, he could make the case that Georgia’s lack of a nonstop connection put Atlanta in the same boat as Greenville, which also had one-stop access to Shanghai via Delta’s Detroit route.
He also noted that Sany Group, Georgia’s largest Chinese investor to date, chose its site in Peachtree City over South Carolina in part because of the nonstop flight from Atlanta that was later suspended.
In short, the restoration of service would be a major selling tool not only for company executives, but also wealthy individuals, students, property developers and institutional investors now looking for assets in the U.S., Mr. Ling told Global Atlanta.
“If there were firm plans that Atlanta would have a direct flight to Shanghai, you bet from day one I’m going to use that to my advantage and emphasize that,” he said.
Still, there’s no guarantees the flights would stay, even if they were able to start again.
For instance, Delta pulled out of Mumbai, India, relatively quickly. It blamed U.S. Export-Import Bank subsidies of Boeing jet purchases for allowing Air India to undercut its prices, making Delta uncompetitive. Delta has also taken Middle Eastern carriers to task for “flooding the market.” The estimated 80,000 Indians in Georgia, meanwhile, pine for better access to their home country.
Mr. Southwell told Global Atlanta that losing these flights in the past shows why it’s important to make the business case to the airlines, even long after the route is won.
“What we need to do as a community is not only focus on the flights we want to get, but the ones we have now, we should have regular missions to those places to help build the Atlanta origin-and-destination traffic, because here we’ve got the connecting flights, but what airlines feel more secure about its growing that,” he told Global Atlanta.
And he doesn’t measure economic impact only by factories established. The airport is taking concrete steps to make sure that the international visitors who do come through the airport — especially Latin Americans — consider spending time and money in Atlanta and “not just Miami and New York.” The airport has hired a travel engagement liaison charged with promoting Georgia’s offerings in higher education, shopping and medical tourism.
“Once you get the flight, you have to target those countries and help the airlines build the traffic. It’s not that we haven’t, it’s just that we need to do it in a coordinated way,” he said.
The spotlight of the State of the Airport event was on its ATL Next capital plan, a 20-year, $6 billion effort to build a “21st century airport for a 21st century city,” as Mr. Reed put it.
A video rendering presented at the event showed off a terminal modernization program that will include futuristic canopies over curbside areas of the North and South terminals. Plans also call for a $500 million Intercontinental Hotel-anchored Airport City mixed-use development, the nearly $1 billion development of a Concourse G to the east of the current international terminal, the rebuilding of parking garages and much more.
Some of the investments are to be driven by the airport’s desire to diversify its revenue streams. The airport has launched an internal team, ATL Business Ventures, to look at ways to enhance nontraditional streams of revenue.
With more than one-fourth of sales coming from parking, the airport is watching closely the development of ride-sharing apps and autonomous vehicles, which could eventually remove or at least substantially reduce the need for on-airport parking.
Mr. Southwell asked attendees to imagine Metro Atlanta Chamber CEO Hala Moddelmog checking her email as her self-driving car whisked her to the airport — leaving it with no parking revenue from her visit.
“Thanks, Hala,” he said to laughter from the audience.
But the airport welcomes the technology even while readying itself for the disruptions it will bring, Mr. Southwell said.
He noted that ride-sharing apps like Uber and Lyft, by popular demand, will be allowed to pick up passengers at the airport as of July 1 if a plan set to be introduced to the Atlanta City Council March 30 passes as planned. The city owns and operates the airport, which currently allows only licensed taxis and limousines to pick up passengers.
In other moves to build an innovation culture, the airport has recently hosted ATL Thinks!, where innovators were charged with solving transportation challenges, and it’s helping with an Airports Council International training program to build a cadre of next-generation of airport leaders.
Hartsfield-Jackson in 2015 became the first airport in history to host 100 million passengers in one year, but Beijing Capital Airport has been nipping at its heels for the past few years, and Atlanta lost its longtime edge in takeoffs and landings to Chicago last year, according to Airports Council International’s preliminary numbers.
Perhaps partly for that reason, officials at the event referred to ATL as the “most traveled” airport, a pivot away from the “world’s busiest” moniker.
Delta Air Lines won the corporate global leader award at the event, while Andrew Young, the former Atlanta mayor, civil rights leader and U.S. ambassador to the United Nations was honored with the global leader award.
Delta and the city are nearing the conclusion on a new 20-year lease at the airport, Mr. Reed said.
Learn more about the event at stateofatlairport.com.