What does a memo from the Delta CEO and newly enacted tax reform legislation tell us about the power dynamic between Delta and its home state?
Yesterday, Georgia Governor Nathan Deal singed into a law a $5BN tax reform package. Delta’s fuel tax exemption did not make into the final bill.
Keeping his promise, Lt. Governor Casey Cagle stripped a measure for reduced fuel taxes from the final bill, blaming the move on Delta’s hostile NRA stance.
Simultaneously, Delta released a memo from CEO Ed Bastian concerning the issue. It’s worth a read, so I have included it in full and bolded what I feel are key parts.
This week, you have likely seen Delta in coverage of the national debate over gun control and security in U.S. schools. I want to take the opportunity to update you on how we got here and where we stand.
On Saturday, Delta rescinded a one-time group travel discount for the National Rifle Association’s annual meeting, and asked the organization to remove our name and logo from their website. This decision followed the NRA’s controversial statements after the recent school shootings in Florida. Our discounted travel benefit for NRA members could be seen as Delta implicitly endorsing the NRA. That is not the case.
I have heard from many of you over the last few days. Our people and our customers have a wide range of views on how to increase safety in our schools and public places, and we are not taking sides. Our objective in removing any implied affiliation with the NRA was to remove Delta from this debate.
While Delta’s intent was to remain neutral, some elected officials in Georgia tied our decision to a pending jet fuel tax exemption, threatening to eliminate it unless we reversed course. Our decision was not made for economic gain and our values are not for sale. We are in the process of a review to end group discounts for any group of a politically divisive nature.
None of this changes the fact that our home is Atlanta and we are proud and honored to locate our headquarters here. And we are supporters of the 2nd Amendment, just as we embrace the entire Constitution of the United States.
I have tremendous respect and admiration for Governor Nathan Deal, and thank him for the work he has done on the jet fuel tax exemption. He is a great friend to Delta. I know this action by the state legislature troubled him as it does all of us.
I know it is not comfortable to be caught in a highly emotional debate, and many of you have received questions from customers. We are at our best when we bring our customers and our world closer together. Hopefully, our decisions this week will serve this ultimate cause.
I want to thank every one of you for your professionalism and continued focus on taking care of our customers every day.
I find the memo interesting on many levels. Bastian states, “Our decision was not made for economic gain and our values are not for sale.” I like this line, but in it he concedes that NRA discount was not removed to remain neutral, but to express values. Values are not neutral. This is why Bastian said the decision to remove the NRA discount “followed the NRA’s controversial statements”. Again, that’s not a neutral stance but a values judgment.
I laughed at the “we are supporters of the 2nd Amendment, just as we embrace the entire Constitution of the United States.” What does that even mean? Do you support in the way that majority or minority of the Supreme Court have construed it in Heller?
Delta may have lost the tax cut battle, but it looks like it will win the war.
Brian from The Gate reports that Governor Deal has promised he will get Bastian the promised tax cuts another way.
[E]liminating the jet fuel tax by a different means will happen and it is non-negotiable.
Ultimately, Delta will likely receive its lucrative fuel subsidy without backing down from its position on the NRA. Fairly or unfairly, Delta’s stance has raised the ire of many NRA backers, but the Atlanta-based airline and biggest employers in the state of Georgia has positioned itself to have the last laugh.