Charlotte-Douglas Airport (CLT) Expansion

[uptownliving]

I can't imagine one of the directors walking in these days and suggesting they bail out US Airways. If USA fails, another airline will take it over and it won't affect Airbus that much.

Airbus made a pretty penny off of their last investment in US Airways. If the airline were to go into bankruptcy then Airbus could potentially lose Billions of dollars in contracts. You don't think that Airbus would try and work with US Airways again to try and protect those billions of dollars in revenue? I can't imagine that Airbus would take a multi billion dollar hit like that and just walk away from it without doing anything.

[uptownliving]

I assume a combined US/AA would be based in Miami, would continue to use Miami, DFW and O'Hare as major hubs. It seems like Philadelphia would have a place in the new network. Phoenix though? Is it too close to DFW? And does it benefit AA to keep CLT at its current capacity? It was over ten years ago, but they shuttered their RDU hub after MIA became the what it is today.

This hypothetical hasn't been discussed much, so I'm interested to hear people's thoughts.

We will be hearing about every airline combo possible in the coming weeks as the media trys to rake in as much cash as they can over this story. But with regards to Charlotte I think that most any US Airways merger with Fill In The Blank Airline would be good for Charlotte except for Delta....which seems to already be taken. US Airways and Delta are the dominant airlines in the Southeast and whoever merges with US Airways will likely want to keep the profitable Charlotte hub to compete against Delta in Atlanta.

Yes, AA did close down RDU back in the 90's because they got Miami...but also because they could not compete effectively with US Air and Delta in the Southeast. Miami really isnt a Southeast hub....it is a Latin American hub. So I don't see Miami as duplicating the Charlotte hub.

[1979Heel]

In this morning's Charlotte Observer, there's a reference to the WSJ article yesterday that said US & UA have been talking for the last month. As it noted, this contradicts all other news; i.e., UA & CO to merge.

UA has Dulles and I would think that's more of a threat to Philadelphia than Charlotte, but Dulles isn't that far from CLT. CLT is a money-maker for any airline-costs are so low to fly in/out. CLT might do better with AA but who really knows. I laughed at the lies DL and NW told at their merger conference: "no hubs will be closed." Yes, they will or they will at least be dramatically shrunken or else the deal makes no sense. I never understood why NW had hubs at both Detroit and Minneapolis, anyway. Their terminal at Detroit is beautiful.

Edited April 17, 2008 by 1979Heel

[monsoon]

Airbus made a pretty penny off of their last investment in US Airways. ...

Do you have some numbers to share on that?

[dubone]

I feel like a complete and absolute layman chiming in here with all the codes and fancy jargon you airline junkies use .

But as a customer, I think it would be great for US Airways to merge with a bigger and better airline as long as the Charlotte hub stays competitive and in operation. I'd love it if we were in with Continental, as I really love that airline from my days of commuting up to Newark Airport.

I think the United Merger would be fine too, but I wonder if there is overlap with the Dulles hub.

[uptownliving]

Do you have some numbers to share on that?

Sure.

Back in 2005 Airbus loaned US Airways $250M to get them out of Bankruptcy and consumate the merger with America West. That loan was paid back in full with interest a year later. And because of that loan Airbus now has $10B worth of contracts with US Airways for new planes.

[Commoner]

Sure.

Back in 2005 Airbus loaned US Airways $250M to get them out of Bankruptcy and consumate the merger with America West. That loan was paid back in full with interest a year later. And because of that loan Airbus now has $10B worth of contracts with US Airways for new planes.

As I recall, their commitment to purchase the A350 aircraft was expressly tied to their commitment to purchase A350s.

[monsoon]

...Back in 2005 Airbus loaned US Airways $250M to get them out of Bankruptcy and consumate the merger with America West. That loan was paid back in full with interest a year later. And because of that loan Airbus now has $10B worth of contracts with US Airways for new planes.

Good info as that pretty much points out why there is no incentive this time for them to loan money to USAir. Airbus already has all the commitment they need and there is nothing else that USA can offer them in return for even more money. If USA gets taken over by another airline, they will inherit the commitment Airbus and they continue to sell planes regardless.

I think that pretty much sums up why you won't see more money from Airbus.

[Ryepow]

When it comes to mergers, nothing is set in stone especially if you're company is the one being acquired. However, CLT's timing for it's fourth runway to open is extraordinary. If US Airways was to announce a merger very soon, it would take roughly a year to approve the process. Is this all just a coincidence?... sure it could be, but it could be much more then we hoped for as a hub for CLT.

[Ryepow]

Good info as that pretty much points out why there is no incentive this time for them to loan money to USAir. Airbus already has all the commitment they need and there is nothing else that USA can offer them in return for even more money. If USA gets taken over by another airline, they will inherit the commitment Airbus and they continue to sell planes regardless.

I think that pretty much sums up why you won't see more money from Airbus.

If Airbus was to help finance US Airways a better offer for Northwest it's return would be future orders when the the combined carrier begins to standardize it's fleet which undoubtably will be all Airbus. Northwest already has a large fleet of narrow body Airbus and A330's that compliment US Airways A330's perfectly. US Airways has a large order for A350's on the books. Northwest has a large order for the A350's competitor, the 787. By helping US get NW, the could be canceled in favor of more A350's...$$$. Northwest also has a large fleet of 747 which if US remained completely loyal to Airbus could result in future A340 or even A380 orders which would mean big bucks for Airbus.

Now am I saying all of this is going to happen... hardly but it wouldn't surprise me.

[Commoner]

If USA gets taken over by another airline, they will inherit the commitment Airbus and they continue to sell planes regardless.

I think that pretty much sums up why you won't see more money from Airbus.

Actually, it depends on the form that any acquisition takes (stock v. asset acquisition) and the terms of the "orders."

US Airways' successor doesn't automatically receive (or inherit) the rights and obligations of US Airways. Also, as of now, I don't know that there are any A350 orders - only commitment to order. These might (and likely would) have some non-assignment terms.

If US Airways is acquired, the acquiror has a good deal of latitute to ignore those commitments.

If US Airways is (somehow) an acquiror, that commitment just got a lot more valuable to Airbus.

[monsoon]

^If USA signed a contract to buy X number of planes from Airbus, they simply can't erase that commitment by playing about with stock sales. Forgetting the legal issues, if they did manage to pull it off, they would never ever get any kind of preferential pricing/scheduling or product development from either Airbus or Boeing or any of the smaller airlines again. It would put them at a big disadvantage.

USA is basically Airbus's b**ch now and there isn't much they can do about it except go out of business.

[ChesterCopperPot]

^USA is basically Airbus's b**ch now and there isn't much they can do about it except go out of business.

http://business.timesonline.co.uk/tol/busi...icle1706432.ece

Not positive, but I think US Airways ditched the A350 deal due to delays...

And if anyone thinks Boeing won't offer deals for any airline to drop Airbus, or vice-versa, you're kidding yourself.

[uptownliving]

http://business.timesonline.co.uk/tol/busi...icle1706432.ece

Not positive, but I think US Airways ditched the A350 deal due to delays...

That article is over a year old and incorrect. US Airways has commited contracts for the A350.

[uptownliving]

USA is basically Airbus's b**ch now and there isn't much they can do about it except go out of business.

If US Airways were to go into bankruptcy again (for the 3rd time) it could legally cancel the Airbus contracts. That was my whole point all along with my previous posts. I wasn't talking about Airbus financing a straightup merger ...all of my posts were about if US Air were to go into bankruptcy then you can bet your bottom dollar that Airbus would do everything within reason to keep US Airways afloat. Just like they did in the previous bankruptcy.

[monsoon]

.....Just like they did in the previous bankruptcy.

And I contend that Airbus is such a different company now they won't be able to do it. In addition, given the state of the $ vs the Euro, they may very well be happy to let the USA deal die.

[Skyybutter]

Was talking to a 757 instructer on my way back working from miami today. 4 75's will leave the system this year replaced with 321s. Also he said to look for an announcement as early as next week regarding another airline merger. This is all speculation of course, but the other big airlines know that consolidation makes sense and with oil at 100$+ per barrel somethings gotta give. He thinks it will be USairways and United. Not suprising as the two tried to merge 8 years ago. The suspense is killing me personally. I think Charlotte would fare well with United. We can only wait and see.

Edited April 19, 2008 by Skyybutter

[uptownliving]

Couple of notes:

-The planned 4,000 space parking deck at Wilkinson and Harlee Ave (across from the Ranch House) has been downsized by 800 spaces to 3,200 spaces. Due to site soil conditions it will be cheaper to build those 800 spaces (one level of the parking deck) somewhere else as part of another parking deck at the airport in the future.

-The planned intermodal rail yard by the new runway is still a go. They are "close" to sealing the deal to relocate the intermodal yard from near downtown to the airport.

[monsoon]

USAirways announced close to a quarter of a billion dollar loss, for 1Q 2008. I am not sure how they can sustain those kinds of loses in the long term.

[HopHead]

USAirways announced close to a quarter of a billion dollar loss, for 1Q 2008. I am not sure how they can sustain those kinds of loses in the long term.

The thing is that it's not just US Airways... Several airlines faired worse. United lost $537 million, American lost $328, Delta lost $274... Oil prices are hurting everyone. That's why we'll see increased airfares across the board... and probably even worse service.

[Miesian Corners]

^Yes, this is not just a US Airways problem. We are ALL going to begin feeling the effects of high fuel prices everywhere we go, in everything we do.

[monsoon]

Reuters has posted a rumor that USAirways is talking to American Airlines about a merger. This is parallel with discussions with a merger with United, though United is also talking to Continental.

A merger with AA may not be as good for Charlotte given that AA has already closed hubs in Raleigh and Nashville basically moved the traffic to Miami and STL.

[Ryepow]

I wouldn't worry about it too much. CLT is an established fortress hub with little low fare competition. American isn't going to pass up 75 gates currently controlled by US, maintenance facilities, training centers, large hub airline customer base, four runways etc... for 15 to 20 gates, big low fare competition, incomplete terminal and baggage system designed for O&D passengers, no on-site facilities and two runways at RDU. They may offer a decent amount of regional jet service still but American and Raleigh would have to invest a ton to get it back to a full fledged hub comparable to CLT. American would use CLT as a large domestic hub. Honestly, there is such a huge cost difference between MIA and CLT it would be interesting to see what they would do. MIA is certainly safe as a Latin American gateway though. I'm thinking it would look similar to Eastern Airlines back in the 80's when they had large hubs in MIA and ATL.

If we are talking US/UA, again I don't see any reason to give up CLT since it's basically the only major answer to DL/NW in ATL. A US/UA marriage could really mean big things for CLT in my opinion especially to Latin America and one stop service to places like Sydney.

Of course anything could happen in the airline industry however, I feel confident CLT will remain a dominate hub for someone. Even if that means US Airways goes at it alone or merges with someone other then the above airlines. The only thing keeping the hub from being a certainty in the future would be if Southwest demands a large amount of gates at CLT in order to compete with these mega mergers. It's a long shot since Southwest is already in RDU and doesn't seem too interested in fighting for CLT.

[CltFlyer]

I just saw that the seasonal flight to vail is now gone.

[Raintree21]

Professional Pilot magazine has named Wilson Air Center the country's top corporate aviation-support facility. For those not familiar, with Wilson Air Center, it is on the Charlotte Douglas property, next to the Air National Guard section, and is where most of the small private chartered flights leave from.