Tuesday, January 22, 2013

Analyst: US Airways-AA merger could cost flights for Charlotte Douglas

A columnist in the Dallas Morning News this week says that a merged US Airways-American Airline would be a boon to the airline's biggest hub, Dallas/Fort Worth.


But how much of the gains there would come at the expense of Charlotte Douglas International Airport, currently US Airways' busiest hub?

Here's the most important passage for Charlotteans from Mitchell Schnurman's column: "A portion of connecting traffic is going to shift to D/FW, with more feed coming from domestic and international,” said the chairman of Boyd Group International in Evergreen, Colo. “A merger would strengthen D/FW in the long run."...He believes that some US Air flights connecting through Phoenix and Charlotte would be more profitable going through D/FW."

That could mean a loss of flights connecting through Charlotte Douglas - a hub that is extremely dependent on connecting US Airways traffic. Connecting passengers make up about three quarters of the airport's 39 million annual passengers, and US Airways accounts for about 90 percent of the airport's daily flights.

So far, Charlotte Douglas officials and US Airways executives have said that the proposed merger would be good for Charlotte, with more flights to and from the city resulting from the combined airline.

But the airline business predicted to grow slowly in the coming years, probably at just around the rate of the economy's growth. So it's possible that the redistribution of flights in a merged US Airways-American would be a zero-sum game, with each hub's game coming as another hub's loss.

In any case, assuming a merger happens, realigning hubs would likely be a multi-year process. Some hubs have lost big in previous mergers (such as Pittsburgh and Cincinnati), while others have prospered (like Charlotte and Houston). Since airlines' largest piece of infrastructure flies, and airlines squeezed by razor-thin margins will shift traffic wherever it's profitable, it's likely hub cities won't know the true impact of a merger for quite some time.

22 comments:

Anonymous said...

The problem with this analysis is that Charlotte is primarily a hub connecting North/South traffic that feeds into West/East. It is conceivable that the East/West traffic goes to DFW instead of Phoenix. Probably not a loss to Clt.

Wiley Coyote said...

I don't see it affecting Charlotte that much because it's actually about 30 miles shorter going through Dallas from Charlotte to San Fran versus going through Phoenix to San Fran from Charlotte.

I think Phoenix would be hit harder than Charlotte.

Anonymous said...

Great.

Charlotte will remain a one airline town, with the irrationally high ticket prices that result......

AND

...prices will grow more as we fly though Dallas/FW on our way to Chicago, NY or StL.

Anonymous said...

Can't wait for Southwest Airlines presence here in Charlotte.....US Airways sucks!!!....Man who can afford to pay those "%$#% fares that they charge.

Anonymous said...

New York and Chicago flights are hardly going to be affected as American, Delta, United, Southwest and JetBlue love going to all those places. Directs to Atlanta, Miami & Boston are likely safe too. We will likely directs to places like Des Moines, Omaha, Kansas City, etc. to DFW is a situation like this. The big question will be the fate of our Rio and Sao Paulo flights, and other carribean destinations. Do they stay put, or go through Miami instead?

Anonymous said...

I meant... We will likely 'lose' lirest to those midwestern cites...

Anonymous said...

>> Since airlines' largest piece of infrastructure flies, and airlines squeezed by razor-thin margins will shift traffic wherever it's profitable, <<

Orr knows this all too well too and has made Charlottes airport a low-cost and highly efficient hub for any airline operating here. Thats why I believe he stated, not wondered, that Charlotte will benefit from the merger or another airline will want to add flights.

Anonymous said...

Ain't gonna happen, AA will increase to 1000 daily flights, right after the Bobcats win the championship next year. This Charlotte, we ain't a bunch of losers like Pittsburgh.

Anonymous said...

The paradigm of airlines being given assigned slots at assigned airports is really antiquated and detrimental to the consumer. Airports need to be completely open to competition, and all airlines should be able to freely compete for as many gates as they can bid for at CLT and every other airport.

This freaking out about flights going to Dallas is similar to freaking out that the Panthers might go to L.A., so we must throw money at them...just let the market decide where are the most efficient locations for these flights. Enough of the protectionist sentiment. US Airways leaving would open up gates for other carriers to finally serve us with more flights.

Anonymous said...

American and US Aiways are the 2 worst rated airlines in the country. Merging them will not be good for anyone, anywhere.
Air travel in this country has hit rock bottom & now they are starting to dig.

Tvan said...

I have a friend that works for an airline analyst and leasing company. From what he is saying, Phoenix would take a big hit, as will Philly. They are projecting Charlotte to remain as is or slightly better than the current situation. As he said, Charlotte is a nice back up to Miami for Latin America service and they're positioned just fine to absorb Philly's trans-Atlantic service.

In the end, who knows until it actually happens!

Anonymous said...

Poster at 3:22, you might wanna check your facts re: US Airways rated worst. Considering they've spent the past few years atop or near the top of the 3 major rated categories (on-time, lost baggage, customer complaints) I'd say your wrong.

Also to the poster wanting Southwest so bad, hey enjoy the two choices of flying to Atlanta or Baltimore for cheap. Those are great cities to visit.

Wiley Coyote said...

Anon 2:01...

Southwest is NOT a long haul carrier.

In April, when you can start flying SW out of Charlotte, leaving Monday April 22 and coming back that Friday the 26th, the fare with SW to San Fran is $1,054 dollars and will take you 9 hours because you have to go thru Midway.

Flying direct to San Fran with US Air at the same time will cost you $781 dollars and 5 1/2 hours. If you want to fly with one stop, the fare goes down to $694 dollars and take 6 1/2 hours.

No other airline flies direct to the west coast from Charlotte except US Air.

Anonymous said...

You have two choices. "San Francisco" and "SF".

Not "Frisco".

Never "San Fran".

Wiley Coyote said...

Anon 4:18...

Anal retentive much?

I also abbreviated Southwest and United States and Air instead of Airways.

I suppose you have a problem with the government denoting SFO as the airport code for "San Francisco"?

You say tomato, I say tomato and I'll continue to use San Fran in shorthand.

Anonymous said...

Charlotte will remain a competitive hub airport, we offer a low cost facility with 3, soon to be 4 parallel runways...which virtually no other airport offers, we are the airport of the future for the southeast US,

Anonymous said...

I read the linked article.

I think this is much ado about nothing.

I just think he's puffing up DFW.

Mark Carolla said...

Here are some thoughts from this airline analyst: Check the geography, folks, unfortunately Charlotte Douglas (CLT) is not as well-situated for international operations as are PHL, JFK or MIA. Flights have to fly farther and use more fuel - repeat use more fuel and be more expensive to operate - coming to CLT from Latin America and the Caribbean than MIA and coming from Europe and Asia (over the Pole from Asia) than PHL, JFK and American's current Midwest stronghold after DFW, Chicago (ORD). As USAirways a Star Alliance member, is not part of American's Oneworld alliance, all those Lufthansa flights to and from Europe will probably shift to United's hubs at Newark and Washington Dulles as they will no longer have a Star Alliance partner in CLT. The good news is if American keeps Charlotte as a domestic mini-hub serving the southeast, the US Airways flightsmight remain...maybe. American once had a hub in Raleigh and abandoned it years ago. Those of us with interests in a robust CLT need to be thinking of a Plan B and preparing for the unthinkable now.

Anonymous said...

Come on Observer. This is really digging... An analyst from Colorado, who was quoted in a Dallas newspaper. Practically every other analyst and US Airways themselves has said Charlotte would be the one that benefits the most aside from maybe DFW, given the low costs of flying in/out of CLT and it's geographic location. If I were Phoenix, I would be a lot more concerned though.

Anonymous said...

Don't you love foolish comments! US Airways has been at the top of customer service for on-time,baggage handling,etc for about 5 years with 2012 being a record setter. These stats are published publicly so there is no excuse for completely fact-free comments just because you have some axe to grind.

Anonymous said...

Blah. Fly 160+ segments a year, United 1K. US Airways is great. American is absolutely terrible. They will drag US Airways down with them.

Huge loss for me, a United guy, now that I will not be able to codeshare/earn points with US Airways flights. Will never see me step foot on an airplane that has the words American Airlines printed anywhere on it.

As for the article... agree with most posters, Charlotte will survive, if not thrive. Phoenix is screwed...

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