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Charlotte-Douglas Airport (CLT) Expansion


uptownliving

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I thought the same thing when I heard the expansion plans. My only concern would be increase fees on commercial travel to compete for runway time with the cargo airliners. It might be a non-issue, but I keep thinking about how expensive flights out of Memphis are because of the airport being a FedEx superhub. The Business Journal reported that it is now the priciest airport in the US for passenger travel. I believe Hong Kong has experienced the same phenomenon given that it is now the biggest cargo airport in the world. If Charlotte's advantage is its low cost, adding cargo traffic might weaken its position as a hub in the event of a US Airways merger or acquisition. Of course being named a cargo hub would mean an increase in jobs as well as a relocation of some manufacturing facilities from other cities. I just wonder if Charlotte wants this or whether it is comfortable being a business travel city.

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Something I would like to see Jerry do is to expand the cargo portion of the business. It seems that with a large intermodal rail yard, 2 major interstates and eventually the Garden Parkway (regardless of your feelings about the project) plus 3 parallel runways, the airport would be a prime place for expanding air cargo.

Expansion of air cargo seems to be their diversification strategy. If we can capture more of that market, we offset any slowing of the growth of hub or local passenger traffic. According to the articles, the airport is looking to also replace the diagonal runway with a 4th parallel runway, which would also allow for lengthening of one or more of the runways to allow larger aircraft. The city is already a fairly important mid-Atlantic trucking center, and there seems to be an emphasis on supporting freight-related infrastructure around the airport. Not only Garden Parkway (always sold primarily for truck traffic to the airport despite the idyllic name), but also a lot of the zoning plans in Dixie-Berryhills and along a relocated West Blvd aligned to the Garden Parkway. Put that together with the N-S intermodal terminal and related air cargo improvements, and we have a solid strategy for growth alongside or in lieu of the US Airways hub.

All said, Charlotte seems to be primed to benefit from the potential US-American merger, as long as it can become one of the big 3 AND avoid any self destructive aspects of merging.

Charlotte's terminal seems much more compact that many of the other mega city airports, and certainly compared to Atlanta with needing to take a train between terminals. At some point the central hall of the airport will be strained, but perhaps that is what will be alleviated with the terminal expansion project over the next few years.

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I thought the same thing when I heard the expansion plans. My only concern would be increase fees on commercial travel to compete for runway time with the cargo airliners. It might be a non-issue, but I keep thinking about how expensive flights out of Memphis are because of the airport being a FedEx superhub. The Business Journal reported that it is now the priciest airport in the US for passenger travel. I believe Hong Kong has experienced the same phenomenon given that it is now the biggest cargo airport in the world. If Charlotte's advantage is its low cost, adding cargo traffic might weaken its position as a hub in the event of a US Airways merger or acquisition. Of course being named a cargo hub would mean an increase in jobs as well as a relocation of some manufacturing facilities from other cities. I just wonder if Charlotte wants this or whether it is comfortable being a business travel city.

I think the difference between Charlotte and Memphis is that Memphis is a large cargo airport with a nominal passenger hub whereas Charlotte, even if it were able to be a cargo hub for one or two airlines, would be the opposite of Memphis. Furthermore, with the extra air cargo flights, CLT should get extra revenue via landing fees which should, in turn, lower the costs for the airlines. Maybe I am wrong on that point though.

Huntsville, Alabama has an intermodal rail yard co-located with the airport and has seemingly been able to leverage this to support airlines such as Cargolux and Atlas operations. I do not know if the railyard was a causal factor in getting 747 cargo service to HSV, however it does illustrate how an airport can function as an inland port with air and rail cargo co-located. Charlotte should be able to pull off something similar, but on a larger scale considering that CLT is vastly larger than HSV and that there is a much larger need for freight shipments in a much larger city.

Edited by cltbwimob
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Huntsville, Alabama has an intermodal rail yard co-located with the airport and has seemingly been able to leverage this to support airlines such as Cargolux and Atlas operations. I do not know if the railyard was a causal factor in getting 747 cargo service to HSV, however it does illustrate how an airport can function as an inland port with air and rail cargo co-located. Charlotte should be able to pull off something similar, but on a larger scale considering that CLT is vastly larger than HSV and that there is a much larger need for freight shipments in a much larger city.

I should preface this by saying that I am not an expert, but I think cargo traffic is more profitable and therefore tends to receive preferential scheduling over time. Charlotte is certainly different from Memphis in that we would not have anything close to what FedEx has at MEM and we are a bigger city (1.8M v. 1.2M) with more Fortune 500s in the metro area. There seems to be a trend, however, toward cargo-heavy airports becoming more expensive. I did a quick search and it appears that some of the biggest cargo airports (i.e. Memphis, Louisville, O'Hare, Newark) are also some of the most expensive:

http://en.wikipedia.org/wiki/World's_busiest_airports_by_cargo_traffic

http://online.wsj.com/article/SB10001424053111904009304576528580064496902.html#project%3DMIDSEAT20110825%26articleTabs%3Dinteractive

There are certainly exceptions to the rule and I think adding cargo capacity would be great for manufacturing and logistics in the city. I am just concerned that we could lose our edge, considering that are already one of the more expensive airports to fly out of.

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  • 2 weeks later...

Per an article in the WSJ, the unions representing American Airlines workers are backing a potential merger with US Airways. They feel that they'll get better treatment than if AA remained an independent company if/when it emerged from bankruptcy.

http://online.wsj.com/article/SB10001424052702303425504577354493373319140.html?mod=googlenews_wsj

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Actually, check that.... US Airways today announced they have reached a contract agreement with American's three largest unions. This move actually cuts off a big chunk of support that would be necessary for them to remain independent. Sounds like a merger may be on the horizon. This would be great news for CLT.

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Yeah, this will be a huge positive for Charlotte if they can take it over the finish line. The step with the unions will be very big, and hopefully will help an eventual merger go more smoothly, too.

I am concerned, though, with all the dominance that American will have even though US Airways is the purchaser. It will be named American, it will be based at American's HQ (ie, many of their execs will lead the company). I really hope they stay in the Star Alliance, but it seems if the combined airline will be dominated by American, that it may not. :-/

Regardless, it seems to be solid for Charlotte's hub, which if of huge importance to the city, so all else is secondary, in my opinion.

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^^^ Management will likely be US Airways management. The Unions in their statements indicate that they are seriously underwhelmed at current AA management and prefer Doug Parker to the current management. The good news is that Doug seems to be in love with CLT and the operation that Jerry Orr maintains and will likely not do much to downsize the Charlotte hub. He may shift some frequencies, but I think Chalotte's status as a fortress hub is fairly safe. Furthermore, I think this represents a Golden opportunity for Charlotte to bolster transatlantic flying and get some new carriers such as British Airways (would like to see the 777 again), Air Berlin, and Iberia are all One-world members. It would take some effort by the airport leadership, but I truly think that one day all these airlines could serve Charlotte if this merger goes through. If the airport plays it's cards right, it could really become a true Oneworld hub. The bad news is that Charlotte will no longer get first go at routes to South America and may even lose the Brazil flight. That being said, I think Charlotte could eventually serve as a tertiary gateway to South America behind Miami and Dallas/Fort Worth. SInce LAN/TAM is the largest carrier in S. America and has a subsidiary in many countries, Charlotte may be able to leverage them for connections, and may even be able to attract a flight from the LAN network. Once again a concentrated effort by the leadership at the airport is important. The final bad news (or possible bad news) is that Lufthansa will no longer be a partner airline to US anymore and may abandon the CLT-MUC route. I think that there is at least some chance that they will stay and just use the Airbus A330-300 year-round rather than the A340-600/A330-300 Summer/Winter combo that they currently use.

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I agree that Lufthansa would probably keep Munich and in my opinion, possibly add Franfurt from Charlotte. There is tremendous local demand for Germany, and on the German based side, a lot of StarAlliance members that would probably prefer to take Lufthansa since it remains in Star.

I also agree that Charlotte will no longer be the key hub to South America, though I would hate for them to lose direct service to Brazil.

The upside is, American is very weak in Europe, or at least similar to US Airways, so if they want to make a big push, CLT would clearly be a great launching pad. I see flights to Amsterdam, Berlin, Geneva, Zurich, Athens, and Manchester as strong possibilities. Barcelona, Tel Aviv, Brussels, Milan, and Vienna could make sense as well.

The big question is Philly. Would they give up a lot of Europe flying from there, and focus on their JFK hub (and in turn move a lot to Charlotte) or try to maintain 2 northeast trans-atlantic hubs?

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I agree with atlrvr in that the demand for Germany here is very strong so I'd be hard pressed to believe Lufthansa would even consider leaving. Didn't CPCC just recently announce a local training partnership with some German institutes as well? I'm ok with losing some SA flights if it means that it opens the doors for other non-stops to Europe. I think that's really where the larger demand is anyways. It would be great for the door to open to attract other international airlines such as British Airways.

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It seems like US has been slowly pulling out of Philly for some time. I was thinking about how the various US and American hubs would be positioned in the event of a merger and it seems like there would be somewhat of a tiered system:

Hubs: JFK, CLT, DFW, LAX, O'Hare

Major Presence: Phoenix, Miami

Reduced Presence: Philadelphia

In terms of overall strategy, I think that each airport would serve their respective regions and JFK/CLT would serve Europe, LAX would serve Asia, DFW would serve Latin and South America, and O'Hare would play more of a US hub role. Of course JFK, LAX, and O'Hare would keep flights to international destinations, but I think they would try to rely on hubs like US Airways does now. Phoenix seems to be in the same position as Philadelphia (big city, in between two better hubs), but has shown more of a commitment to keeping US. Miami is still attractive given its proximity to the Mediterreanean, but I just don't know how big of a market that is when compared to the Central and South American flights that DFW and LAX would seem to serve better given distance. At any rate, this looks like a good move for CLT.

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I can certainly see Miami getting the edge since O'Hare would give the combined company a mid-America hub and Miami seems to be a more popular city in general for Latinos. My thought was that DFW was a much bigger airport, Miami does not appear to have as much room to expand, Dallas has a large hispanic base, and DFW's central location would provide much easier connections to other US airports. Miami is so far southeast that it does not make sense as a connection point for flights originating anywhere other than the East Coast. That said, Miami seems to draw far more South Americans and geographically it makes more sense for flights to the east coast of South America. It seems to make sense to either use DFW for most Latin/South American flights or use LAX and Miami to essentially split the area.

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I can certainly see Miami getting the edge since O'Hare would give the combined company a mid-America hub and Miami seems to be a more popular city in general for Latinos. My thought was that DFW was a much bigger airport, Miami does not appear to have as much room to expand, Dallas has a large hispanic base, and DFW's central location would provide much easier connections to other US airports. Miami is so far southeast that it does not make sense as a connection point for flights originating anywhere other than the East Coast. That said, Miami seems to draw far more South Americans and geographically it makes more sense for flights to the east coast of South America. It seems to make sense to either use DFW for most Latin/South American flights or use LAX and Miami to essentially split the area.

Miami is WEST of 95% of the South American continent. Look on a map to see how far out of your way you'd be going if you flew from, say, Lima, Peru to Pittsburgh by way of DFW instead of MIA. It's even worse if it is a city on the east coast of S. America.

Also, people don't want to have to change planes 2x on a trip. So you need to have direct domestic flights going in to/out of the Latin American gateways. Cleveland -> CLT -> Buenos Aires is much more palatable than Cleveland -> CLT -> MIA -> Buenos Aires. Delta does this with its Atlanta hub (new ATL international "Concourse F" opens in May) and folks will certainly choose fewer connections when booking their flights.

I think this bodes well for CLT keeping its LATAM flights and perhaps adding more. MIA will always have some Latin American routes due to the strong local demand, but it makes more sense to run the majority out of your domestic hub b/c of all of the direct feeder flights - plus the costs are much cheaper in CLT.

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For those of you who may be worried about potential negative effects on CLT in a merger between US AIrways and American, reading the earnigs trancript should put your mind at ease. Here are some highlights:

-The CLT hub has the second highest profit margin after DCA.

-CLT is positioned for more growth, especially domestic, but also some international

-US is currently working on securing a time slot to operate a flight to Sao Paulo

-CLT-GIG route is performing well

-US Airways management loves the partnership they have with Jerry Orr

-Management is fully supportive of Jerry Orr's expansion plans

These statements come directly from Doug Parker and Scott Kirby who will likely be the top executives of the merged airline.

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I wouldn't be worried about CLT in an AA merger. Regardless of MIA (the third most expensive airport per passenger in the USA), CLT will still be able to support a non-stop to GIG. The AA service to Latin and South America from MIA focuses on O&D traffic. CLT is a model built on connections and as the only viable alternative in the Southeast to the Delta hub at ATL.

If nothing else, remember how cheap CLT is to operate. In 2011, MIA cost airlines $23.23 per passenger compared to CLT's $4.58. Those numbers make themselves very apparent when you look at the number of domestic non-stop cities served by the two airlines via their hubs at CLT and MIA. The US hub at CLT offers service to 102 domestic airports versus AA's nonstops to 38 domestic airports at MIA.

Edited to add AA/US hubs by weekly number of seats

Edited by Miesian Corners
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They have them in a lot of nightclubs throughout uptown. I don't understand why they carry 100 different kind of gum and condoms....Very strange. However one of the reasons why the nightclubs have them is because sometimes there tends to be drugs and fights and other 'believe it or not' types of things happening in the restrooms :lol:

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