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Archive for October 6th, 2009

US Airways Planning Cuts

Union contracts make running an airline more difficult. They also make understanding the airline industry more difficult. Case in point is US Airways contracts with its pilots.

Recall that America West bought US Airways back in 2005. At the time, America West entered into a transitional agreement with the two airlines’ pilot unions. This agreement includes a minimum number of aircraft that the merged carrier is required to operate and limits what routes (former) US Airways and America West aircraft and crews can fly. Despite operating under one certificate — legally as one airline — for two years now, the transitional pilot agreement remains in place. The two pilot groups are essentially at war with each other over seniority issues, and reaching a permanent deal remains elusive.

The airline’s 25 99-seat Embraer E 190s aren’t covered by those fleet size minimums. They represent the only way the airline can shrink and not violate the terms of its labor contracts. And that’s exactly what US Airways is planning to do. It is close to selling 10 of the planes. It’s rumored that the other 15 will follow.

In June, US Airways and its associated commuter carriers operated 573 daily flights from Charlotte. 38 were on E 190s.

Bonus observation: Recall that US Airways also entered into a deal with Delta to swap 125 sets of slots at LGA for 40 odd sets of slots at Washington Reagan. The press release also said that US Airways was going to increase the average size of aircraft operating out Washington Reagan. You can’t do that with what was at LGA, where 120 of th current 125 flights are on 37 or 50-seaters. Best guess is that the airline is also planning on selling their Northeast Shuttle operation (gates, slots) and using the planes elsewhere within their system (like at DCA).

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All Aboard the Crazy Train to Gastonia

Your General Assembly is spending $5m. to re-open four miles of defunct rail lines in thru Gastonia in the hopes that it somehow makes money. Or something. But in the meantime, the state wants the city to shut down vehicle traffic at several spots where the tracks cross streets. Too expensive to put up signals and gates, you see.

To recap, the state can find the money and will to operate a railroad, but cannot be bothered to do so safely and without negatively impacting the lives of property owners and citizens. And the great perversion of government marches ever onward.

Take us away, Randy.

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The Knights Want Money. Again.

The York County Council wants to hold the Knights to a $265K per year penalty if Don Beaver up and moves to Uptown before a four-year lease extension is over. Beaver says he can only afford $225K per year. This is the outfit that wants to build a $75m. stadium, haggling over $40K a year.

You watch, next year the 2008 agreement to free up and provide infrastructure for an Uptown baseball stadium will be amended, first to extend the 2011 deadline in that agreement and probably to increase the public subsidy involved in the deal as well.

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PopFest: Thud

Here’s a hopeful review of that recent Charlotte PopFest event that winds up in pretty negative territory.

Sounds like the organizers bit off a little bit more than they could handle.

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Bi-Lion? Food-Lo?

Anyone with a non-ironic appreciation for Southern things must be aghast at word Food Lion may buy Bi-Lo out of bankruptcy. Across many ups-and-downs Bi-Lo has always struck me as the local Southern grocery chain. Food Lion, in contrast, has not felt Southern since the days of Ralph Ketner and LFPINC. Sure, Food Lion has marketed itself as Southern, but it just has not felt that way no matter how many different kinds of hot dog chili are on the shelves. Not with the Belgians in charge.

But there also seem to be real operational differences between the two chains that make an effective marriage hard to envision. Food Lion likes small foot-print stores and there are some big Bi-Los out there, particularly the newer Super Bi-Los. They have a bigger produce area, a dedicated seafood case, and humming bakeries that even Harris Teeter employees have recommended. Ah-ha, you say, that sounds more upscale which sounds like Food Lion’s Bloom tier. Not really.

Blooms are still small-foot print and more importantly feature a distinct lay-out and self-checkout system which will not be easy to over-lay on existing Bi-Los — or Bi-Lo customers. As a result, I would not expect to see many conversions to that model. Where would Bi-Lo fit then? Well, after the direct overlap stores are shuttered, I imagine the remaining stores would exist as a separate brand and tier within the Food Lion family, not unlike the Hannaford unit does in New England.

Bonus Teeter: Matthews’ own Harris Teeter is not Southern? Not exactly. Always struck me as more universally or perhaps New South country clubby than red-dirt Southern. I doubt there are more than three kinds of hot dog chili in any Teeter, and half of the iced teas come from Snapple.

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