By Kathleen Foody, The Associated Press

ATLANTA – Georgia lawmakers may eliminate a tax break for airlines buying jet fuel at the world’s busiest airport, setting up a face-off with one of the state’s largest employers, Atlanta-based Delta Airlines.

The latest version of the bill from Republican Rep. Earl Ehrhart would remove the break for all airlines, updating his original proposal to end only Delta’s. State officials estimate the exemption is worth about $23 million, and supporters of the bill said that money could be used for aviation-related upgrades throughout the state.

But the proposal also has become a political flashpoint. From the House floor early this session, Ehrhart accused one of Delta’s lobbyists of threatening members who had signed on. The company has denied that.

Ehrhart still bristled this week at the airline’s opposition to eliminating the perk while its CEO has been a prominent backer of more revenue to improve Georgia’s roads and other infrastructure.

“It’s been said that we need to step up and tax individuals in our district for transportation,” Ehrhart said this week in a subcommittee. “After you.”

The tax break was first approved in 2005 as Delta faced bankruptcy. Ehrhart himself voted for its creation and later for allowing it to continue indefinitely.

Wesley Tharpe, an analyst with the Georgia Budget and Policy Institute, said corporate breaks often remain on the books for years in Georgia without any review. He’s hopeful the bill will encourage lawmakers to take a look at other exemptions or credits.

A similar bill to eliminate the jet fuel credit went nowhere in 2014. But members of a subcommittee and a key committee chairman this week signalled their support, meaning the bill could receive a House vote in the coming days.

“Companies are looking for an airport that has a 5,000-foot runway or has taxiways or a radio control tower, all sorts of assets that these smaller communities can’t afford to do,” said Republican Rep. Jay Powell, a Camilla Republican who chairs the influential Ways and Means committee considering the bill. “Just like the internet has made rural Georgia accessible to companies, this also will make rural Georgia accessible to companies.”

Delta spokesman Trebor Banstetter said Thursday that lawmakers risk the Atlanta airport’s competitive status.

“If approved, this measure would put Hartsfield-Jackson Atlanta International Airport at an economic disadvantage by making aviation fuel taxes in Georgia some of the highest in the industry,” Banstetter said, citing Georgia’s #11 jet fuel tax ranking by the Airlines for America trade organization.

Vaughn Jennings, a spokesman for the group, called the changes “unnecessary tax hikes.”

“We urge the legislature to enact a business climate which values air transportation, promotes travel and encourages airlines to further invest in the economic prosperity of the state,” Jennings said.

Rep. Allen Peake, R-Macon, indicated in a Thursday meeting that he was leaning in favour of the bill but asked the question on some members’ minds.

“Do you have any concerns that this would potentially cause Delta to move their corporate headquarters from here or potentially divert business assets because of the action we’re taking?” Peake asked Ehrhart.

Ehrhart said he wasn’t worried about that.

Moving an airline’s headquarters is no easy feat though companies sometimes threaten it during fights over expenses, said industry analyst Robert Mann, president of R.W. Mann Company. Fuel tax exemptions add some competitive edge but commercial airlines worry more about per-passenger and landing fees set by airports, he said.

“But it’s a pile of money and people seeing a pile of money tend to want it,” Mann said.

ATLANTA (AP) — Georgia lawmakers may eliminate a tax break for airlines buying jet fuel at the world’s busiest airport, setting up a face-off with one of the state’s largest employers, Atlanta-based Delta Airlines.

The latest version of the bill from Republican Rep. Earl Ehrhart would remove the break for all airlines, updating his original proposal to end only Delta’s. State officials estimate the exemption is worth about $23 million, and supporters of the bill said that money could be used for aviation-related upgrades throughout the state.

But the proposal also has become a political flashpoint. From the House floor early this session, Ehrhart accused one of Delta’s lobbyists of threatening members who had signed on. The company has denied that.

Ehrhart still bristled this week at the airline’s opposition to eliminating the perk while its CEO has been a prominent backer of more revenue to improve Georgia’s roads and other infrastructure.

“It’s been said that we need to step up and tax individuals in our district for transportation,” Ehrhart said this week in a subcommittee. “After you.”

The tax break was first approved in 2005 as Delta faced bankruptcy. Ehrhart himself voted for its creation and later for allowing it to continue indefinitely.

Wesley Tharpe, an analyst with the Georgia Budget and Policy Institute, said corporate breaks often remain on the books for years in Georgia without any review. He’s hopeful the bill will encourage lawmakers to take a look at other exemptions or credits.

A similar bill to eliminate the jet fuel credit went nowhere in 2014. But members of a subcommittee and a key committee chairman this week signaled their support, meaning the bill could receive a House vote in the coming days.

“Companies are looking for an airport that has a 5,000-foot runway or has taxiways or a radio control tower, all sorts of assets that these smaller communities can’t afford to do,” said Republican Rep. Jay Powell, a Camilla Republican who chairs the influential Ways and Means committee considering the bill. “Just like the internet has made rural Georgia accessible to companies, this also will make rural Georgia accessible to companies.”

Delta spokesman Trebor Banstetter said Thursday that lawmakers risk the Atlanta airport’s competitive status.

“If approved, this measure would put Hartsfield-Jackson Atlanta International Airport at an economic disadvantage by making aviation fuel taxes in Georgia some of the highest in the industry,” Banstetter said, citing Georgia’s #11 jet fuel tax ranking by the Airlines for America trade organization.

Vaughn Jennings, a spokesman for the group, called the changes “unnecessary tax hikes.”

“We urge the legislature to enact a business climate which values air transportation, promotes travel and encourages airlines to further invest in the economic prosperity of the state,” Jennings said.

Rep. Allen Peake, R-Macon, indicated in a Thursday meeting that he was leaning in favor of the bill but asked the question on some members’ minds.

“Do you have any concerns that this would potentially cause Delta to move their corporate headquarters from here or potentially divert business assets because of the action we’re taking?” Peake asked Ehrhart.

Ehrhart said he wasn’t worried about that.

Moving an airline’s headquarters is no easy feat though companies sometimes threaten it during fights over expenses, said industry analyst Robert Mann, president of R.W. Mann Company. Fuel tax exemptions add some competitive edge but commercial airlines worry more about per-passenger and landing fees set by airports, he said.

“But it’s a pile of money and people seeing a pile of money tend to want it,” Mann said.

Next year Delta Airlines flyers will start noticing their sluggish inflight internet connections getting a lot faster. Delta announced on Wednesday that it is upgrading more than 250 planes that fly its long-haul domestic, Latin America and Caribbean routes with Gogo’s new 2Ku connectivity, boosting overall broadband capacity on its planes to 70 Mbps.

I say capacity, not speed, because 70 Mbps is the connection to the airplane, which Gogo in turn divides up among passengers who pay for the service, just as your home Wi-Fi router splits your broadband connection to all of your devices. Still, 70 Mbps is a huge improvement over Gogo’s current service, which essentially uses a meager 3 Mbps 3G connection to serve an entire cabin full of passengers.

2Ku supplements Gogo’s ground-to-air network – essentially a CDMA network pointed at the sky – with satellite capacity from SES and Intellisat. Upgrading to 2Ku requires an aircraft retrofit, however, so the airlines are only gradually moving over to the new service. Gogo says it now has six airlines either trialing or committed to deploying 2Ku on a total of 300 planes.

Virgin Atlantic has already signed up for 2Ku, but Delta is the first major domestic airline customer to hop on board. The airline will upgrade its first aircraft in 2016, though overhauling all 250 planes will take several years. Delta said it plans to equip new international aircraft with 2Ku as they enter its fleet.

Gogo hasn’t revealed any details on pricing yet, and it may choose to charge a premium over its already expensive rates to tap the faster network. That might be a turn-off for some people, but the typical Gogo user tends to be a business traveller whose company foots the bill.

Delta Airlines plans to end its daily flight from Rochester, Minnesota to Detroit, Michigan.

The airline says it will re-route the crew to Minneapolis and end service between Rochester and Detroit April 9. Service between the two cities began last September.

Rochester International Airport executive director John Reed says a flight from Rochester to Atlanta also launched in September will not be affected.

Minnesota Public Radio News (http://bit.ly/1Arf2lB) reports shifting the Detroit crew to Minneapolis will provide three daily flights from Rochester to Minneapolis.

ALBANY, GA (WALB) –
Delta Airlines is cutting flights at Southwest Georgia Regional Airport.

When the airport opened the new terminal a year and a half ago, airport and city leaders hoped that might lead to more flights.

Instead, the only airline that serves Southwest Georgia Regional Airport has decided to cut back.

Southwest Georgia Regional Airport will see less activity in two and a half months.

Delta Airlines plans to reduce the weekly flight count from 20 to 18.

“As of May 5th, there will be one less flight per day on Tuesdays and Wednesdays only.”

The midday flight for both days would cut, leaving only two departures at 6 am and 5:30 p.m.

Airport Director Yvette Aehle, said Delta hasn’t told them any plans beyond the summer.

“They only do their flight plans three months in advance. So, we could only find until the end of August. It’s when we show they end. They could pick back up again in the fall, we’re not quite sure,” said Yvette Aehle, Airport Director.

Within those three months, frequent flyers between Albany and Atlanta would have a limited amount of flight choices.

“Oh it will affect us when we’re coming down here and we can’t get a flight until later in the day. That means we’re going to have to sit in Atlanta for a longer period of time,” said Aehle.

Ahele worries some travelers may even choose other airports, which would hurt the airport that has made improvements such as a new terminal and expanded parking to accommodate Delta better.

“It’s unfortunate for us because what they would say is, ‘that’s a local decision that you all made. If you all want to build a terminal that’s up to you.’ They did not ask us to do that. However, they did ask us to expand the ramp where they park,” said Aehle.

Aehle knows that with big business their bottom line is all that matters. But she hopes Delta will at least listen.

“We’re just saying that we want them to reconsider because, losing ten percent of your seat capacity to any market does hurt, said Aehle.

A new vending area is now open at Southwest Georgia Regional Airport.

They call it the recharge and refuel center.

Airport officials decided against having a full-time restaurant.

The vending area is place where passengers can relax or grab a snack.

It also includes plenty of USB ports so travelers can charge their phone, tablets, and laptops.

Copyright 2015 WALB. All rights reserved.

ROCHESTER, Minn. (AP) – Delta Airlines plans to end its daily flight from Rochester, Minnesota to Detroit, Michigan.

The airline says it will re-route the crew to Minneapolis and end service between Rochester and Detroit April 9. Service between the two cities began last September.

Rochester International Airport executive director John Reed says a flight from Rochester to Atlanta also launched in September will not be affected.

Minnesota Public Radio News (http://bit.ly/1Arf2lB ) reports shifting the Detroit crew to Minneapolis will provide three daily flights from Rochester to Minneapolis.

Information from: Minnesota Public Radio News, http://www.mprnews.org

Copyright 2015 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

ALBANY, GA (WALB) –
Delta Airlines is cutting flights at Southwest Georgia Regional Airport.

When the airport opened the new terminal a year and a half ago, airport and city leaders hoped that might lead to more flights.

Instead, the only airline that serves Southwest Georgia Regional Airport has decided to cut back.

Southwest Georgia Regional Airport will see less activity in two and a half months.

Delta Airlines plans to reduce the weekly flight count from 20 to 18.

“As of May 5th, there will be one less flight per day on Tuesdays and Wednesdays only.”

The midday flight for both days would cut, leaving only two departures at 6 am and 5:30 p.m.

Airport Director Yvette Aehle, said Delta hasn’t told them any plans beyond the summer.

“They only do their flight plans three months in advance. So, we could only find until the end of August. It’s when we show they end. They could pick back up again in the fall, we’re not quite sure,” said Yvette Aehle, Airport Director.

Within those three months, frequent flyers between Albany and Atlanta would have a limited amount of flight choices.

“Oh it will affect us when we’re coming down here and we can’t get a flight until later in the day. That means we’re going to have to sit in Atlanta for a longer period of time,” said Aehle.

Ahele worries some travelers may even choose other airports, which would hurt the airport that has made improvements such as a new terminal and expanded parking to accommodate Delta better.

“It’s unfortunate for us because what they would say is, ‘that’s a local decision that you all made. If you all want to build a terminal that’s up to you.’ They did not ask us to do that. However, they did ask us to expand the ramp where they park,” said Aehle.

Aehle knows that with big business their bottom line is all that matters. But she hopes Delta will at least listen.

“We’re just saying that we want them to reconsider because, losing ten percent of your seat capacity to any market does hurt, said Aehle.

A new vending area is now open at Southwest Georgia Regional Airport.

They call it the recharge and refuel center.

Airport officials decided against having a full-time restaurant.

The vending area is place where passengers can relax or grab a snack.

It also includes plenty of USB ports so travelers can charge their phone, tablets, and laptops.

Copyright 2015 WALB. All rights reserved.

ROCHESTER, Minn. (KTTC) — Delta Airlines is ending its Rochester-Detroit flights at Rochester International Airport this spring.

The new Airport Director at RST, John Reed, said the final flight to Detroit will be on April 9. A new Minneapolis flight will take the Detroit flight’s place after that date.

Reed said Delta informed him via email last Tuesday, his second day on the job, that the change was happening. Delta says the change is partly due to a pilot shortage. Delta told Reed it was reallocating its resources. Reed said this change is a simple business decision on Delta’s part, and that ultimately these kinds of changes are up to each carrier.
Reed looked at the numbers, and said the load levels on the Detroit flight weren’t that bad. He says flights were 75% full on average.

Delta Airlines launched the Detroit flight out of RST in early September. It was the first time Delta offered a direct flight from Rochester to Detroit since 2011. It was that November when Delta last canceled its Rochester-Detroit flights.

Despite the change coming so early in the new director’s time at RST, Reed is keeping his head high. He is encouraging the community to reinforce support for the Atlanta flight that Delta started offering in conjunction with the Detroit flight this past September. He says loads on that flight are around 79% on average. He also voices the importance of having a flight from Rochester to another major hub in the country.

SEATAC, Wash. — The owners of several dogs returning from the prestigious Westminster Dog Show in New York say Delta Airlines lost their show dogs at JFK Airport.

One of those was a standard poodle named Paris. It was the responsibility of the owner’s grandfather, Greg Gorder, to bring Paris home to Seattle on Wednesday.

But as Groder was sitting on Delta’s 4:05 p.m. non-stop flight from JFK to Sea-Tac Airport, he and other show dog owners on the flight didn’t see their dogs being loaded into the cargo hold of their Boeing-737.

“We suddenly realized our dogs aren’t on there, even though the stewardesses were telling us they were,” said Gorder.

One dog owner used his FlyDelta app to determine the crates of some of the dogs were not loaded onto the plane. The app allows passengers to track the location of their tagged luggage. The dog owners complained.

“We just wanted to establish that our dogs where still on there,” Groder said. “They couldn’t do it, wouldn’t do it.”

Show dog owner Sarah Pearce says the plane sat at the gate for an hour while the owners waited for an answer from Delta personnel about their dogs.

“Once they realized they couldn’t find our dog and had no idea where they put him, we had to get off the plane and wait until they could find them,” she said.

The owners were given the choice to either fly on without knowing where their dogs were or take a later flight with their dogs. All the owners with dogs not accounted for got off the plane.

“They didn’t know where the dogs were, period,” said Gorder.

Pearce says the group waited four hours for Delta to deliver the dogs to them in the terminal. But owner Jenny Dawson didn’t see her dog. She was traveling with her service dog inside the cabin and her show dog was suppose to be on board in her crate in the cargo hold. She was surprised to see Delta bring up the empty crate that was for her service dog.

“I had an empty crate and a crate with a dog in it, and they pulled off the crate with no dog,” said Dawson.

Her show dog went on to Seattle on the plane. She had gotten off the plane thinking her show dog was lost with the other dogs.

“I was livid,” she said. “It was like, really, can you not look in there and see there is no dog?”

A Delta Airlines spokesman disputes some of the claims made by the dog owners.

In a statement to KOMO News, Mike Thomas says there was “limited space in the cargo compartment,” which prevented all the dogs from traveling on the same flight.

He also said “the dogs remained in Delta’s constant care while the airline worked to re-accommodate both the customers and their animals.”

Delta has apologized for the inconvenience and given the dogs and their owners a free overnight stay at a hotel near JFK, a refund of their $200 dog fees, VIP service at the airport and seats for the dogs in the cabin for the return flight to Seattle.

“More pets go missing than the airlines like to admit,” said Airline Travel Industry Analyst Steve Danishek.

He suggests passengers traveling with animals should try to fly on the same plane with their animals in the cargo compartment. Danishek says it’s worth paying the extra for a non-stop flight rather than risking issues with your pets on connecting flights.

Crated animals are considered luggage. Try telling that to a show dog owner who’s returning from the most prestigious dog show in the world.

With crude prices declining, many investors are getting interested in airline stocks. Delta Airlines (DAL), in particular, has seen many big name investors like Daniel Loeb (Trades, Portfolio), Julian Robertson (Trades, Portfolio), John Griffin (Trades, Portfolio), Mario Gabelli (Trades, Portfolio), Ken Heebner (Trades, Portfolio) and Whitney Tilson (Trades, Portfolio), buying its shares last quarter. The company’s stock price has gained ~300% since the beginning of 2013, but its relative valuation is still one of the lowest among all SP Industrial companies (see graph below).

Delta’s Relative Valuation versus SP industrials

Source: Investor Presentation

I believe Delta Airline’s stock offers a good buying opportunity at current levels. Here’s my key investment argument for the company.

Delta is one of the best airlines in terms of operational excellence. In 2014, the company had 95 days of no mainline cancellations, a completion factor of 99.8% and an on time rate of 85%, excluding the one time impact of winter storms in 1QFY2014. This excellent operational performance translates into revenue premium as customers are willing to pay for high quality services.

The company’s operational excellence coupled with the falling crude price is leading to improved profitability. Last quarter, Delta reported a $1 billion in pre-tax profit with EPS of $0.77 which beat consensus of $0.75. The company’s margin expanded by over 400 basis points. Delta is judicially using its cash flow from improved profitability. The company has paid down $2.1 bn in debt last year and its net debt level at year end was $7.3 bn. This translates in $200 mn of annual interest savings. The company is now just two notches away from investment grade rating and plans to further bring down debt levels in the next two years. In addition to bringing down its debt levels, the company also repurchased $1.35 bn in stocks and paid out $251 mn in dividends.

Going forward, the company expects a significant increase in pretax profit in 2015 from fuel cost savings and the benefits of initiatives it is taking to increase its topline. The company plans to bring down its debt levels to $6 billion by the end of 2016. it also intends to significantly accelerate its capital returns and plans to spend a minimum of $1.5 bn in dividends and buy backs in 2015.

Delta’s shares are trading at 9.13 time FY2015’s consensus EPS estimates. Its forward annual dividend yield is 0.80%. Out of 18 analyst covering the company 16 are bullish and have buy recommendation, and two have hold ratings. Given the company’s operational excellence, history of returning cash to shareholders, fuel cost tailwinds and attractive valuation, I recommend buying the stock.