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Archive for April, 2012

Guns, protestors, and the DNC

The Associated Press has an article out on measures that Tampa and Charlotte are taking to deal with the possibility of armed protestors at the Republican National Convention and Democratic National Convention this summer. On Charlotte:

The issue is a more complicated in Charlotte. The city in January adopted an ordinance allowing it to set up “extraordinary event zones” – designated areas where people won’t be allowed to carry backpacks and other items.

The city wanted to ban guns in those zones. State law, though, allows people to carry concealed weapons – unless they’re at a parade or protest.

“The zone is going to be far bigger than a demonstration area. So if I have a demonstration that marches us down main street, but the extraordinary event zone covers all of downtown, what about the area outside the demonstration? That’s the piece that been hitting us here,” said Mark Newbold, an attorney with the Charlotte police department.

That’s a potentially significant issue, for a variety of reasons, though not one the UPoR seems interested in talking about. Though to be fair, we still have no idea exactly what impact DNC security measures will have on Uptown employers.

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Boeing 757 replacement?

Where you can fly nonstop depends greatly on what aircraft are available. Especially internationally. Right now, US Airways uses three types of planes to fly to Europe: 293 or 258 seat Airbus A330s, 204-seat Boeing 767-200ERs and 176-seat Boeing 757s. Of those aircraft, only the A330s are here for the long run. US Airways wants to replace their existing 767s and 757 from 2017.

Only one problem though: there may be no real replacement 757 available. The 757 is a narrowbody aircraft and US Airways is concerned that the next generation of narrowbodies from Boeing and Airbus lack the range of the 757 and won’t be able to fly Philadelphia – Europe or even Phoenix – Hawaii routes. The airline currently also flies Charlotte – Dublin nonstop seasonally on the 757.

To put it another way, if a 258 seat aircraft is the smallest thing available for flights to Europe, it necessarily restricts the possible markets that can be served. That’s especially true from Charlotte, which in US Airways’ network gets the second flight the airline offers to a destination in Europe. (If US Airways and American Airlines merge, then CLT goes further down the priority list.)

So news that Boeing is studying a long-haul 757 replacement is a good sign. Not sure if it will amount to anything, of course, but it could potentially be worth several additional flights a day for US Airways to Europe.

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Remembering what MJ said

The Associated Press has a story out marking the Charlotte Bobcats finishing the season with the lowest winning percentage in NBA history. The money quote, from Michael Jordan before the season began:

I think this is not a wasted season because who knows how good we can be? We’ve got some good pieces that can help us get to the playoffs. I’m not waiting until next year. I think we have a good quality basketball team this year.

Nope. And perhaps the reality is that his Airness just isn’t a very good basketball executive.

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N.C. House 92 race

Charles Jeter and Tom Davis are competing for the GOP nomination for state House District 92 that snakes around portions of Mecklenburg county. Barry Smith offers up a preview for Carolina Journal.

Highlight: “It’s pretty evenly split between Republicans and Democrats,” said Charles Jeter, one of the two candidates. “It’s potentially a bellwether district for 2012.”

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GOP 9th Congressional District preview

Carolina Journal’s Dan Way has a new article out looking at the Republicans looking to take over Sue Myrick’s seat in Congress. As there are 10 of them running, the article is divided into two parts:

• Barry, Dulin, Gauthier, Killian here.
• Leonczyk, Lynch, Peacock, Pendergraph, Pittinger, Steinberg here.

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Resist the urge to merge

In his column today, John Hood writes that many local government consolidations just don’t work out:

On paper, the consolidation of local governments often seems attractive. By eliminating duplicative services and spreading administrative expenses over a larger number of public employees and residents, consolidation offers the prospect of reducing the cost of public services while maintaining or improving their quality.

But in the real world, these benefits often prove illusory. When you consolidate school districts or other governments, you reduce the extent to which local residents can move with their feet to jurisdictions that best reflect their preferred mix of government costs and services. Only by moving far away, perhaps even to another metro area altogether, can they escape the jurisdiction of poorly run governments. Unless their employment prospects or lack of family ties permit it, this radical alternative is too costly for many residents. So the consolidated governments can afford to grow more bureaucratic, more costly, and less worried about the quality of services they provide.

A valuable lesson to remember especially as a possible merger between the City of Charlotte and Mecklenburg County is being pushed by the Anthony Foxx and others.

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Southwest Airlines (AirTran) very likely to drop CLT-ATL

Been working on an analysis of what impact of Southwest Airlines’ purchase of AirTran will have on the Queen City. It was getting kind of long, so I decided to split it into two parts.

The basics: Southwest doesn’t currently fly to Charlotte. AirTran does, with flights to Atlanta (ATL), Baltimore (BWI), and Orlando (MCO). Atlanta is the key market as that’s easily AirTran’s biggest hub. Based upon what Southwest is saying and the nature of the route, I’d have to say that the odds of Southwest or AirTran flying Charlotte-Atlanta nonstop in two years are pretty low.

Here’s why: AirTran currently operates Atlanta as a banked hub, in which a bunch of planes all arrive at about the same time, people connect to their intended destination, and all those planes leave at about the same time. Southwest doesn’t do the banked hub thing. As Gary Kelly, Southwest Airlines’ chairman/president/CEO said during the airline’s conference call last week:

Without attempting to be too colorful — that’s not a new statement — we’re chang[ing] routes, we’re changing cities. We’re adding and subtracting. What you have with AirTran today is not what you’re going to have with those airplanes when they’re integrated into Southwest Airlines. So it will be a very different route network. If nothing else, the hub-and-spoke system that they currently operate in Atlanta, we won’t do that. We’ll have our typical point-to-point network established.

The exact reason though that AirTran makes CLT-ATL work is because of hub-and-spoke. In the second quarter of 2011, ignoring people connecting at either end, only about 215 passenger a day flew each way between Atlanta and Charlotte. Unsurprisingly, Delta Air Lines and US Airways dominated the route, combining for nearly 90 percent of this origination and destination (O&D) traffic. That leaves AirTran with on the order of 24 O&D pax a day each way, or about eight for each of on average three flights a day on aircraft that seat 117. The route survives only because AirTran connects many more people a day to other destinations in Atlanta, something Southwest will greatly reduce the possibility of doing.

Lowering fares on the route isn’t the answer either. It’s only 227 miles as the jet flies between CLT and ATL, so the vast majority of people going between the two cities drive regardless of what air fares are. And AirTran/Southwest certainly can’t force Delta or US Airways off the route — after all, Atlanta and Charlotte are their largest hubs respectively and they currently fly CLT-ATL a combined 19 times a day to collect the connecting traffic. O&D passengers are almost bonus for them.

So yes, it’s pretty much a given that Charlotte-Atlanta on Southwest isn’t happening.

Orlando: Another bad sign here. AirTran, which currently has a daily nonstop to Orlando, is dropping the route come mid-August. No indication it’s coming back as even a Saturday only service through the end of October, which is as far out as AirTran schedules are available. While there’s been some seasonal variation on how often AirTran has flown the route in the past, the answer most certainly in the past few years has not been “no nonstops at all in October.” For example, in September 2010, AirTran flew the route three days a week. AirTran can, of course, still connect people going to Orlando for now in Atlanta. And Southwest, for which Orlando is a big station, is certainly free to add the route in the future regardless of what happens on CLT-ATL.

The decision to drop the MCO nonstop isn’t all that surprising though as federal data doesn’t suggest that AirTran wasn’t doing all that well on CLT-Orlando. They flew the route daily in 2Q2011 yet AirTran achieved only a 18.2 percent market share of a 364 passenger a day each way market. That’s 66 people a day, which isn’t too good when you’re flying a 117 seater. The average fares on AirTran were also not too good, at an average of $116.64 each way. The market average was $155.24; US Airways got $163.77 each way and had a 72.2 percent market share.

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Charlotte home prices hit new low

Or so reports the UPoR. Which is good, I suppose, in that it’s always darkest just before dawn. Of course, given the mass of foreclosures in the pipeline/still to come and with unemployment extremely high, there’s no guarantee though when housing’s new dawn gets here or how bright it will be. Unlike cars or refrigerators, houses don’t have really a limited lifespan, so there’s no penned up replacement demand, so a slow status quo in housing can in theory continue for a quite prolonged period of time.

Bonus observation: The best hope for housing is actually population growth of a tad under 1 percent a year nationally. Eventually, as the number of Americans increases, the excess of housing that currently exists will be taken care of. It just will take some time.

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Anthony Foxx’s dumb analogy

So it seems the mayor is arguing that a $926 million proposal to build additional stuff to attract the creative class plus some bucks thrown in for selected neighborhoods is analogous to Mayor John Belk’s decision to push for a new airport terminal back in the 1970s.

Er no, it’s not analogous at all. Having actually flown out of the old terminal back in the 70s, that building was clearly outdated at the time and it was only a question of when it would be replaced. Belk’s push came after voters rejected a more ambitious plan to replace the terminal. (The current terminal in its original 20-gate form was IIRC actually a smaller substitute.) That’s not the situation at all today. There’s nothing clearly obsolete that needs replacing sooner not later or it will be an economic development problem.

Rather what Foxx and City Manager Curt Walton are proposing is upping the ante in what they consider to be a bidding war for the “creative class.” Essentially, all that stuff we spent hundreds of millions of taxpayer dollars building in recent years — and which has produced the highest local tax burden among the state’s urban areas — just wasn’t enough to attract people so now we need to build more stuff to make it work.

Bonus observation: Apparently Anthony Foxx has never heard of the concept of comparative advantage, which tells us we should specialize in what we’re relatively good at. That isn’t really high tech stuff, at which the Triangle has a significant comparative advantage. And the proposed $10 million for UNC Charlotte’s College of Computing and Informatics most certainly isn’t going to change that.

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The latest in the Vue saga

Foreclosure. And probably a conversion into apartments. Which really should surprise no one. Which is not to say that local economic development types like the trend, because renting doesn’t tie people and their income streams to the city long term the way buying a condo would.

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April 2012
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