The Future At Clt If Us Fails?

[BoeingBoy]

CLT-Douglas,

I certainly don't know if CLT is profitable now either. All I know is that it was profitable, and certainly could be again.

Jim

 

[sfb]

1. With a 90% reduction of service with out US Airways, how quickly could airlines begin to restore some of the lost service to CLT?

Pretty quickly, actually, though the initial response of the network carriers would be to upgauge existing flights and/or add frequency to their hubs. As of 2002, US's share of the domestic O&D traffic at CLT stood at around 64%, or around 8000 seats/day (this is both directions combined). If CO were to upgauge to mainline, DL were to fly 767's to ATL and CVG, UA and AA were to operate 757's or 767's to ORD, DFW, DEN, etc., you'd soon see most of the existing demand satisfied. With its RJ armada, I can see DL as the most likely to offer point-to-point flying from CLT to places like BOS, LGA, DCA, PHL, etc. (i.e. the highest O&D non-hub cities).

The big question is how quickly the LCC's (most likely WN, B6, and FL) would jump in to offer service on some of the more popular routes from CLT. My gut instinct is that you'd see it happen very quickly unless the US leases were tied up somehow in the bankruptcy proceedings.

2. CLT is currently building a new parking garage, and I believe has funding and is starting construction of a third parallel runway already. Plans to double the size of terminal E, the express terminal are also on the drawing board. Is it likely the new runway and terminal E expansion will be canceled as a result to a shut down, or is it likely the airport will go ahead with the plans to be a more attractive hub facility for possible other airlines?

Well, if the new runway is under construction, there's not much they can do but finish it. They can slow down the construction if it will save money, but the federal government is probably paying much of the cost anyway. Going forward with an expansion of Concourse E would seem foolish to me since I do not see the demand existing without the US hub.

3. I am aware of the low O&D Stats at CLT with is a major negative. I am certain that some explanation as to why is because CLT is the most expensive airport for passengers to fly out of in the country. CLT has a lot of positives going for it as it's costs are low, very efficient, great facilities, good year round weather, good centralized east coast location, growing city, low cost of living, very limited LCC competition for now. All factors to lure another airline to use CLT as a hub, but in all likely hood who would be interested how much of it would be US Airways to sell rather then the airports responsibility?

The real value of the CLT hub is only as a functioning, connecting hub. Piedmont spent years building that operation, and it's expensive for airlines to build new hubs bit-by-bit. All the reasons you gave are good reasons for the network carriers and LCC's to add service to CLT, but not enough to justify another airport building a connecting hub there. After all, St. Louis has nearly twice the population of the Charlotte area and yet AA dramatically scaled back the former TWA hub (in part due to WN's presence there, though).

The one wild card here is the fact that CLT is the only real alternative in the region to ATL. But I just can't see any of the legacy carriers having the resources to build a hub at CLT at present. Maybe, just maybe CO or AA.

4. If no other airline is interested in using CLT as a hub, would CLT see a flood of LCC enter or a lot of empty gates and only a slight increase from the other airlines that currently already serve CLT?

I think CLT will look a lot like BNA but with more empty gates. One or more LCC's will come in with a good number of flights (I'm thinking 50-100 total LCC departures after two or three years) but that will still leave a couple of concourses' worth of empty gates.

5. If US Airways fails, Lufthansa would be the only airline offering non stop service to Europe. Is it likely another airline will take over US Airways routes to Europe from CLT if there is no hub airline, or would eventually Lufthansa pull out and all service to Europe will be lost? If another airline did use CLT as a hub, what other routes could be considered?

Most international flying (including Caribbean) would disappear. The LH flight doesn't make sense without US Airways there and in the Star Alliance. The international O&D isn't enough to support the flights.

 

[CLT-Douglas]

Thanks sfb for your detailed answers to my questions.

I noticed you mentioned Continental or American possibly having the resources in using CLT as a hub one day. I would tend to think American would remain stronger in RDU then in CLT. Continental it seems would be a good candidate to build a stronger southeast presence, and use the hub as a north south connector much as US Airways does between CLT and PHL. What about Northwest though? I know they have a hub in MEM, but if perhaps they picked up some Airbus from US and took over the Caribbean flights along with the ground equipment they could move out of MEM to a more established and modern hub facility in CLT with plenty of room to grow.

 

[KCFlyer]

A real good example of this..MCI/Kansas City. Braniff tried to hub it..failed. Eastern tried to hub it/Failed. UAir attempted to hub it and it didnt work. This city had some real bad O@D numbers and at least one terminal bldg remains empty

[post="170040"][/post]​

Which terminal would that be? Last time I was out there, A, B, and C were all in use.

 

[RowUnderDCA]

They had been rotating renovations around the three circles, but I'd have thought they'd be finished by now.

 

[gso-crew]

Airtran is pulling out of GSO in two weeks, Greensboro News and Record reported today that Airtran enjoyed the highest load factor of all the airline serving GSO, 80 plus %...... maybe they have inside info on U's future and are preparing to make a move. CLT and GSO are pretty close, maybe they have decided to move their focus to CLT. Piedmont used the Convenient facilities in CLT to lure passengers from Eastern in ATL, maybe they plan to lure Delta passengers from ATL to CLT for their conns.

 

[OldGuyinPA]

SWA will be in CLT asap...Bank on it


BYCU

 

[mh2438]

I don't understand why CLT is building that parking deck given the uncertainty of US Airways' future. I hope that they reconsider the third parallel runway. I also don't understand why they are building some sort of new toll road into the PIT airport. If it is a toll road perhaps that's a private venture. But the parking deck and runway are being paid for w/ tax money. I think it would be prudent to wait on building the runway at least.

 

[BoeingBoy]

On the subject...

Fitch Assigns $165MM Charlotte, NC Airport Rev Bonds 'A' Rtg; Stable Outlook

NEW YORK--(BUSINESS WIRE)--Aug. 18, 2004--Fitch Ratings assigns an underlying 'A' rating to City of Charlotte, North Carolina's bonds as follows:

Press Release

[Edit] Interesting comments toward the bottom about scenerios with loss of 50% and 100% of US Airways service.

Jim

 

[sfb]

[Edit] Interesting comments toward the bottom about scenerios with loss of 50% and 100% of US Airways service.

Jim

[post="170281"][/post]​

Jim-

Interesting that Fitch agrees with me about CLT -- but then I think that it's just common sense when you consider the state of the industry.

I don't understand why CLT is building that parking deck given the uncertainty of US Airways' future. I hope that they reconsider the third parallel runway. I also don't understand why they are building some sort of new toll road into the PIT airport. If it is a toll road perhaps that's a private venture. But the parking deck and runway are being paid for w/ tax money. I think it would be prudent to wait on building the runway at least.

Well, the third parallel runway won't be necessary if US Airways fails, but they may already be stuck with the construction contracts at this point. As for a third parking garage, they're going to need that no matter whether US has a hub at CLT or not. Remember that connecting passengers don't use parking garages; it's the CLT O&D passengers who do. In fact, if US Airways were to go under and significant LCC service were to be added at CLT, you'd probably see MORE demand for parking as Charlotte-area travelers flew more from CLT, not to mention the fact that lower fares would draw more traffic from around the region. The loss of US's commuter service would probably force folks currently using smaller airports in the Carolinas to drive to CLT rather than flying -- again increasing demand for parking.

 

[BoeingBoy]

sfb,

You didn't perhaps write the report for Fitch, did you....

Jim

 

[NewHampshire Black Bears]

I sincerely hate to say this folks, but CLT(like PIT and US) are soon to be "toast"

Perspective carriers moving into CLT ??

AA, Nope.(their running a half a$$ed hub in RDU)

UA, They're struggleing to keep the "lights burning"

DL, In the process of shrinking

NW, to fly a few n/s to DTW,MSP,MEM "ONLY", I doubt it.

=============================================

WN, already in RDU

Air Tran, Nope, HUB in nearby ATL.

B6, all CLT would get out of them is n/s's to NYC ONLY.

Sadly, these are the casualties of this lunatic business, that so many of us are ADDICTED to.

Good Luck CLT.

NH/BB's

 

[NewHampshire Black Bears]

OOPS, sorry, I forgot CO(an Interesting thought)

Best bet, DL runs a comair shuttle CLT/ATL, with a handful of n/s's to big city airports this side of DEN/SLC.

NH/BB's

 

[ISP]

this is a question I have that has been bugging me...

we all talk about how CLT has the highest fares in the nation, and that US won't introduce go fares there (at least for awhile) because they basically have a monopoly. However, since the O&D is so low, how much would it hurt to implement go fares? CLT is about connections, not O&D... would US really lose a lot of revenue doing this? And as a result, wouldn't this move stimulate more O&D?

 

[sfb]

sfb,

You didn't perhaps write the report for Fitch, did you....

Jim

[post="170349"][/post]​

I wish! I'd be getting paid a heck of a lot more than I am now