US Airways cancels Delta acquisition

[tombarnes]

I don't see how an airline can successfully operate two major hubs just 25 air minutes from each other.

[turbocraig]

Costs regardless, if the spokes in the network don't line up to the same hub, then the system is useless. I posted about that dual hub theory earlier in the thread. It just won't work, no matter how much cheaper we are or how much we want it to happen.

[monsoon]

Costs regardless, if the spokes in the network don't line up to the same hub, then the system is useless. I posted about that dual hub theory earlier in the thread. It just won't work, no matter how much cheaper we are or how much we want it to happen.

[lukedog]

Indeed. I completely agree with you. My 25 minute comment was a technical one, not a cost one. A wheel can't have two hubs.

[monsoon]

I have no doubt they would keep Philly as that is a different wheel. Its too important to the NE Megalopolis. I think Pennsylvania would pull out the stops to keep the state from losing its other hub.

The question here is what happens to Charlotte given that it is only 25 air minutes from Atlanta.

[AuLukey]

Let's assume the worst case scenario, what exactly would happen to Charlotte if this took place? Would we see any major economical consequences or would our image just be stained? The direct flights could cause issues, but overall would it make it more difficult to recruit international business or just hurt our flight times?

[kickazzz2000]

What about having a few smaller hubs as opposed to having one big hub. For example, if US Air and Delta merge you could shrink Charlotte and increase the size of Philly. Leave Atlanta the same size. Salt Lake is already a west coast hub for Delta- keep it as well as keep Phoenix and increase presence in Phoenix to be the West Coast hub. Phoenix by the way is the 14th busiest airport in the world with over 41,000,000 passengers. You are left with one larger west coast hub (Phoenix) and one smaller one (Salt Lake). You have one large east coast hub (atlanta) and a little smaller one in Philly.

[Neo]

Let's assume the worst case scenario, what exactly would happen to Charlotte if this took place? Would we see any major economical consequences or would our image just be stained? The direct flights could cause issues, but overall would it make it more difficult to recruit international business or just hurt our flight times?

I would think it would cause issues with Charlotte being able to recruit larger companies and possibly even retain large companies that we currently have. Board members typically don't like to connect somewhere else and will decide it isn't worth their time and just move their company where it makes conducting business easier.

[monsoon]

This probably won't be much of an issue for CEO's. The Airport has a private terminal for them as discussed in this Observer article that was posted over the weekend. Most of them don't fly on USAir.

This Article describes the private executive terminal that most of us don't get to see. I would expect this would be unaffected by the merger.

[lukedog]

I would think it would cause issues with Charlotte being able to recruit larger companies and possibly even retain large companies that we currently have. Board members typically don't like to connect somewhere else and will decide it isn't worth their time and just move their company where it makes conducting business easier.

[moving uptown]

although the caribbean and central american flights would probably disappear, i believe gatwick and frankfurt would remain because of the bank traffic. also domestically, i believe we will keep seattle, sfo, lax as far as transcontinental routes go. we are a big enough city to keep those and at worst, boa would subsidize sfo, microsoft would subsidize seattle, and rdu gets an lax flight, we can handle an lax flight.

[uptownliving]

For years US Airways operated large hubs in both Philly and Pittsburgh which are 250 miles apart...roughly the same distance as CLT and ATL. The only reason the PIT hub was "dehubbed" was due to PIT's high costs. We all know that CLT has some of the lowest costs in the entire country, so I think we are in pretty good shape.

So I am not buying into the CLT will be shut down since it is too close to ATL theory, especially when USAirways has a history of operating hubs close together.

I certainly think that CLT could see some overall reductions in flights, but at this point I havn't seen anything that would indicate it would be drastic cuts.

[Miesian Corners]

Like metro said...Ceo's and board members fly private jets (usually). Direct flights are very convienent but I don't think they dictate whether you would locate a company in a city or not...there are numerous other factors that dictate that. For example, I can't believe that Lowes, Bank of America, or Wachovia chose Charlotte or the Charlotte area because of the Airport. I'm not saying direct flights aren't a consideration or they aren't very convienent...but they are not the deciding factor.

[Pillsbury]

Like metro said...Ceo's and board members fly private jets (usually). Direct flights are very convienent but I don't think they dictate whether you would locate a company in a city or not...there are numerous other factors that dictate that. For example, I can't believe that Lowes, Bank of America, or Wachovia chose Charlotte or the Charlotte area because of the Airport. I'm not saying direct flights aren't a consideration or they aren't very convienent...but they are not the deciding factor.

[SmellyCat]

I've spoken to a few analysts who think Continental could very well surface as a white knight and push USAir out of the picture. Let's hope so!

[Miesian Corners]

although the caribbean and central american flights would probably disappear, i believe gatwick and frankfurt would remain because of the bank traffic. also domestically, i believe we will keep seattle, sfo, lax as far as transcontinental routes go. we are a big enough city to keep those and at worst, boa would subsidize sfo, microsoft would subsidize seattle, and rdu gets an lax flight, we can handle an lax flight.

[monsoon]

For years US Airways operated large hubs in both Philly and Pittsburgh which are 250 miles apart...roughly the same distance as CLT and ATL. The only reason the PIT hub was "dehubbed" was due to PIT's high costs. We all know that CLT has some of the lowest costs in the entire country, so I think we are in pretty good shape.

So I am not buying into the CLT will be shut down since it is too close to ATL theory, especially when USAirways has a history of operating hubs close together.

I certainly think that CLT could see some overall reductions in flights, but at this point I havn't seen anything that would indicate it would be drastic cuts.

[Miesian Corners]

They closed the Pittsburg hub. I don't think that analogy does much for proving your case. Years ago, when USAir was merging with Piedmont, they ended up closing the Dayton Hub as being redundunt so this is a common move for these kind of mergers.

[monsoon]

The point that is relevant to this topic is, they could close the hub without affecting passenger traffic. i.e. the other hubs could absorb the traffic without affecting the airline's business at all. When USAir felt it was better for their business to shut it down, they did.

The same can be said of a CLT shutdown as a hub in a combined Delta/USA operation. That is the reason that CLT might remain open is because ATL can't handle it. That isn't the case at all.

[lukedog]

Does anyone have any insight as to why us air WANTS to buy Delta? US Air is finally starting to turn a profit and Delta has been losing hundreds of millions each quarter. I uderstand the idea of volume...but it seems the merger would just be chaos with having to straighten out Delta.

[monsoon]

Does anyone have any insight as to why us air WANTS to buy Delta? US Air is finally starting to turn a profit and Delta has been losing hundreds of millions each quarter. I uderstand the idea of volume...but it seems the merger would just be chaos with having to straighten out Delta.

[dubone]

There seem to be many layers to this. The merger seems to be a hypothetical, closing Charlotte's hub is a hypothetical, and whether that would be a good or bad thing seems to be debatable.

Business decisions are complicated. I suspect there are plenty of reasons to close Charlotte, and plenty of reasons to keep Charlotte. I'll bet even if this merger happens, they will not make drastic changes for the first little while. I'm sure you guys are right, though, we're in trouble eventually if this thing goes through.

(I'm one who thinks it will be a deep blow to the city if the combined company cuts operations here more than 10-20%.)

[uptownliving]

The same can be said of a CLT shutdown as a hub in a combined Delta/USA operation. That is the reason that CLT might remain open is because ATL can't handle it. That isn't the case at all.

[lukedog]

There seem to be many layers to this. The merger seems to be a hypothetical, closing Charlotte's hub is a hypothetical, and whether that would be a good or bad thing seems to be debatable.

[dubone]

Maybe that is what they'll call the combined airline. It'd have a better brand than Delta .