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monsoon

USAirway's Demise Bad for Charlotte?

Will USAirway's Failure harm Charlotte's Growth  

44 members have voted

  1. 1. Will USAirway's Failure harm Charlotte's Growth

    • No
      20
    • Yes
      24


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The sickout by flight attendants and baggage handlers over Christmas was a major blow to any chance they had for survival. There were some mighty pissed off people stuck at airports for as much as 5 days. I think the PR fallout from this will lead to their ultimate undoing. The short term pain will be bad, but long term I think it will be a good thing when a true low cost carrier steps in.

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The Triangle is doing well....however you will notice the lack of Corp HQ there....they only have 1 Fortune 500 HQ being Progress Energy. Whereas Charlotte has 8....largely due to the hub being here.

If USAirways goes under and fares lower...then Charlotte will have to change its recruitng strategy and not focus on getting Corp HQ....they will have to focus on retaining the Corp HQ that are here.

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. Whereas Charlotte has 8....largely due to the hub being here.

<{POST_SNAPBACK}>

Fortune lists 7 Fortune 500 HQs in Charlotte

  • Bank of America Corp

  • Wachovia

  • Duke Energy

  • Sonic Automotive

  • Nucor

  • SPX

  • Goodrich

Plus there is Family Dollar and Lowes in the way out in the suburbs. Of these only SPX and Goodrich moved to Charlotte and employ relatively few people in the city. The rest of the the HQ's were homegrown and are not here because of US Air. I think Raleigh got the better end of the deal, and like it was said above they are growing faster than Charlotte.

I will be glad to see US Air gone.

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Family Dollar is not in the way out suburbs...their HQ property is literally on the Charlotte City Limits. Drive down Monroe Rd and you can see for yourself. However, technically speaking they are in Matthews.

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Mark Vitner is the premiere economist for Wachovia and a resident of First Ward downtown. He was asked by the Observer about the possible shutdown of USAirways:

Q. US Airways continue to struggle financially. Should the airline fold, what would the impact be on the region?

The immediate impact from the loss of US Airways would be formidable. Initially, other airlines would boost their flights between Charlotte and their nearby hubs. Simply adding more flights would only be a temporary solution. I believe another carrier would come into Charlotte with at least a mini-hub and, quite probably, another major hub within two years.

Airline traffic is growing 6 percent to 7 percent a year nationwide, and even faster in the Southeast. In addition, Charlotte/Douglas International Airport is unusually well-run and has very low operating costs for carriers, making it a very attractive hub location.

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I think Charlotte will be effected for awhile(buisness wise). I think you should look at cities that have gone through the same thing. Nasvhille used to be Americans largest hub in the south. They then pulled out of Nasvhille. Nashville used to have international flights and everything. But if you look back on it this actually turned out ok for nasvhille. Southwest is now the major airline and is much cheaper. The only downside is that once Americas left, Nasville fell off the radar on a buisness standpoint. They are slowly rebuilding. It appers that that Nasvhille will eventually be much bettter off, considering all the other airline are going under, but it is and will still take a few more years to become a major airport.

The good news for charlotte is that Nashville's growth was not effected at all, population wise. In fact it is growing faster that ever.

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Fortune lists 7 Fortune 500 HQs in Charlotte
  • Bank of America Corp

  • Wachovia

  • Duke Energy

  • Sonic Automotive

  • Nucor

  • SPX

  • Goodrich

Plus there is Family Dollar and Lowes in the way out in the suburbs.  Of these only SPX and Goodrich moved to Charlotte and employ relatively few people in the city.  The rest of the the HQ's were homegrown and are not here because of US Air.    I think Raleigh got the better end of the deal, and like it was said above they are growing faster than Charlotte.

I will be glad to see US Air gone.

<{POST_SNAPBACK}>

Your right on your point, but keep in mind a lot of those "home growns" like NCNB which merged/bought BankAmerica sold Charlotte as global HQ partly because of its hub status. The growth of those businesses, their ability to rapidly expand regionally and super regionally was largely due to the lack of obstacles when it comes to business travel. I agree with the Wachovia analyst, isn't the end of the world here but tougher times are ahead in the near term, for the average joe the JetBlues and SWs will come in with lower fares but its a two edged sword--less routes and lesser prices, the discounts wont offer non stop service to London or Frankfurt or LA and no more flights to NYC every 2 hours. For a corporation like BA or Goodrich that might be a problem.

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Isn't Nasheville one of the top cities in the nation when it comes to Fortune 500 companies relocation? If Nashville can prosper through the change then could Charlotte not do the same? I'm not trying to down play the negatives and I would hate for Charlotte to lose its hub statis but like others but,I don't think it's going to be all that catastrophic. Charlotte has fought for and worked for everything that it has. The city will pick itself up and go out and try to once again build the best airport it can. Charlotte will be OK.

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where r u getting this list for fortune 500 relocations? I'd be interested in seeing that broken down. Thanks in advance!

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about regional growth, one thing i keep hearing about the demise of the majors (even though USAirways is much younger then the old majors its now considered one) is the demise of the extensive regional feeder route systems.

BofA and others won't get those ample flights (or sometimes even ANY flights) to Spartanburg, Macon, Chattanooga, Mobile, etc. with a JetBlue or SW that builds on point to point service between large and prosperous airports. Couple that with the true corporate travel of multiple flights to NYC or Chicago or Atlanta every day as well as the European direct flights and you do have a blow to corporate travel. Pittsburgh with BayerUSA, American Eagle, SKGlaxoUSA is feeling that pinch from USAirways. No more 2 flights to Johnstown or Akron or Greensburg not to mention those wide selections of flight times to NYC or Chicago or dailys to London or Frankfurt, even with SW, JetBlue, NW and others picking up routes with a weak USAirways they aren't looking at picking up the directs to London or the regionals to Johnstown or Akron.

I do welcome the weakening of the USAirways strangle hold --especially in Pgh--which ushers in the lowfares like jetBlue, but you'll have to drive to Eire from now on.

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I don't know if there is any truth to this rumor...but here it is:

Governor Easley is in talks with JetBlue to have a big tax incentive and take over hub operations in CLT when US closes. Its smart maybe b/c there is soo much traffic between NYC and CLT being they are the two largest banking centers in the US.

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Governor Rendell should get on the stick up here then, Charlotte is one hub Philly and Pittsburgh (what is left of it) are two, wake up EDDIE R.! ;)

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Pittsburgh lost out because it simply cost too much money to operate there.  That situation as not changed.  If anything, it is worse now.

<{POST_SNAPBACK}>

don't make the mistake we made, we had a good (if very small) airport in 1991, spent hundreds of millions expanding it to JFK or O'Hare proportions (the final phase was dropped but the land is still there to expand the gates) all because USAirways at the time was the Southwest of its day and wanted a hub home. Labor costs across the union state of Pa. are always high but Philly has the traffic to back it up, Pittsburgh doesn't, USAirways still needed a mid-east hub at the time and the airport authority is still paying off the debt from the rapid expansion. The costs right now are high to operate, but again USAirways ran a monopoly out of PIT for years, with some competition those consumers driving to Cleveland or Columbus to fly out will stay in the metroplex for their flights--thus lowering overall debt. That's why USAirways I don't believe will survive. Competition drove them out of Baltimore is driving them out of Philly and they gave up the 'burgh without a fight. (lovely that they don't even fight over us anymore) lol.

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Interesting that Mexicana Airlines plans to begin service in Charlotte to both Mexico City and Guadalajara this summer. I don't think they are planning on doing any code sharing with USAirways so their demise would not affect the route.

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USAirways has now reached agreement with its machinest union. Assuming the members will vote in favor of the contract USAirways would have passed a huge hurdle on its way out of bankruptcy. They still have a ways to go to secure financing...but this was a good day for the airline.

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