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Archive for May, 2012

US Airways/American merger speculation gets weirder

Reuters is reporting that US Airways may team up with TPG Capital, which has been a player in previous airline merger talks, to bid on American Airlines. The US Airways/TPG alliance, even if formed, is not exclusive though, and both parties are considering other options.

A US Airways/TPG deal would greatly strengthen US Airways’ bid for American.

Reuters also says that American might be interested in a merger — after it gets out of Chapter 11, with one of US Airways, Alaska Airlines, or JetBlue, which is something I’ve long thought possible.

So yes, lots of merger speculation weirdness.

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Bobcats lose again

And get the second pick in the upcoming NBA draft in a year in which there’s a clear best player available (Anthony Davis) and after that many scouts don’t see much of a difference between the second through eighth best talents. Oh, and the top pick went to New Orleans. So perhaps it’s time to accept that the Bobcats are just a bit jinxed…

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Ultimate Air Shuttle comes to town

Offering a flight a day from Charlotte to Cincinnati’ Lunken Airport on Dornier 328 jets four days a week for a $595 round trip fare, all taxes included.

OK, so what’s this all about? Honestly hadn’t heard of Ultimate Air Shuttle before, but the Ohio-based company’s plan seems simple enough: fill a niche market for business travelers out of Ohio, particularly Cincinnati. Why Cincinnati? Because, according the U.S. Department of Transportation, Cincinnati (CVG) has the second highest airfares in the country, behind only Vail, Colorado. Flights out of Cincy in 4Q2011 came at average of a 39.2 percent fare premium. By comparison, Charlotte rank 18th with a 10.4 percent fare premium. And bad as things are in CVG now, they use to be much worse. For 4Q2006, for example, the average fare premium was 71 percent.

A more concrete example per DOT data from 4Q2011:
The average one-way fare flying Charlotte-Cincinnati: $287.61
The average one-way fare flying Charlotte-Columbus, OH: $225.97
The average one-way fare flying Charlotte-Indianapolis: $204.00
The average one-way fare flying Charlotte-Louisville: $213.63

Bonus Observation: In case you’re wondering what a Dornier 328 jet looks like, well this is one. Back in the day, a Delta regional affiliate flew Dornier 328 from CLT on feeder flights to Delta’s hub in… Cincinnati!

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UPoR ignores major DNC story

You’d think that the Charlotte Observer would pay attention to the big stories surrounding the DNC. And no, I don’t mean which special events planners got the contracts to throw parties at which locations for which state delegations. Exact 10 people not working for a special events company care about that stuff.

Rather there is that little matter of the thousands of protestors coming to town and the city’s attempts to keep them off camera. One flash point is a big march planned the Saturday before the convention for which the city was acting very slowly on issuing a permit. The delay prompted an Associated Press a 470-word story yesterday, which the Observer, as far as I can tell, did not run. Mysteriously, the city agreed today to issue the permit. The UPoR today did run a short AP blurb about that.

The UPoR, however, did have a piece on the DNC’s “I’m There” campaign to promote the event.

The Charlotte Observer, all the news that fits Uptown’s perception of itself.

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Hood on annexation reform

North Carolina is close to passing a law requiring a referendum for an annexation to take place. JLF head John Hood examines the subject today, noting that it’s all about the money:

What city politicians really want to do is provide services to the existing city residents who elected them without charging those residents the full price. Annexation is a handy device for foisting the cost onto someone else.

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On the latest baseball stadium proposal

So the latest version of the proposal to bring the Knight Uptown doesn’t include any property tax money but rather more hotel/motel tax money plus some bucks from the Center City Partners, providing a political fig leaf to those on city council that want to vote for it but are afraid to because of the property tax aspect.

Yawn. Money is a fungible asset — as this deal proves yet again. And increasingly people are catching on to that — it’s not as if we haven’t heard that line before. (See: arena bundle.)

And none of this gets around the fundamental problem — we’re giving public money to move within the Charlotte metro area something that competes with other unsubsidized business for scarce entertainment dollars and does nothing to help the local economy as a whole. And the hard questions still haven’t been asked — like what happens if the Knights don’t hit their attendance projections.

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London flights not daily this fall

As the title says, US Airways’ Charlotte – London Gatwick flight will not operate every day this fall. From about October 9 through near Christmas, the flight operates only six days a week — not on either Tuesday or Wednesday, depending upon the week. And no, this hasn’t happened before. So another sign that a). London Gatwick, isn’t all that and b). US Airways is acting aggressively to limit transatlantic capacity over the winter.

This leaves Frankfurt as the only European destination served daily year-round from Charlotte. The other European destination served from Charlotte over the winter is Munich on Lufthansa, but that flight only operated five days a week from November through March last year.

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Southwest Airlines in CLT: Like CHS or RDU?

So how much of an impact will Southwest Airlines have when they start flights from Charlotte? Great question.

First, understand that in the eastern U.S., Southwest is not a point-to-point airline. Instead, its flights are almost all to a series of small to medium-sized hubs. These hubs don’t have banks like US Airways’ operations here in Charlotte, where a whole lot of planes arrive in a short period of time, passengers change planes, and all those planes then leave again within a tight time period. Southwest’s flights at its big stations are spread out much more evenly through the day. Still, if you have 70+ flights a day from one city, that creates connecting opportunities. And, yes Southwest will gladly do a connection for you.

Now let’s look at Southwest and AirTran (which Southwest bought) existing service to other cities in the Carolinas, which would be to Charleston (CHS), Greenville-Spartanburg (GSP), and Raleigh-Durham (RDU)) for this summer:

Destination CHS GSP RDU
Atlanta (ATL) 4
Baltimore (BWI) 3 2 7
Chicago Midway (MDW) 2 2 4
Denver (DEN) 2
Ft. Lauderdale (FLL) 1
Houston (HOU) 1 1 1
Las Vegas (LAS) 1
Nashville (BNA) 1 1 4
Orlando (MCO) 1 4
Philadelphia (PHL) 3
Phoenix (PHX) 1
St. Louis (STL) 1
Tampa (TPA) 3
Total 7 7 36

All service is on Southwest except for ATL-RDU, which is on AirTran. Some of the RDU flights are seasonal: Baltimore, Chicago Midway, Houston, and Orlando each go down a flight in October. Yes, that means Houston service is seasonal for Raleigh-Durham.

Charlotte’s service on AirTran this summer is 4 x Atlanta, 3 x Baltimore, and 1 x Orlando. The good news is that’s more flights than AirTran has had out of CLT in a couple of years. The bad news is that come mid-August, it falls back to 3 x Atlanta and 3 x Baltimore. That’s right, AirTran is dropping CLT-MCO come mid-August — it’s not even offering Saturday only service from late August through the end of October. And the November schedule, which is expected to contain major changes, itn’t out yet.

As previously noted, ATL-CLT looks to be in trouble. If Atlanta and Florida are toast, that starts to limit Southwest’s potential impact here — flights to those markets make up a third of Southwest/AirTran flights from RDU this summer.

As for the other routes, Baltimore and Chicago Midway are givens. Say 4 or 5 x BWI and 3 x MDW. A flight to Denver would also seem right. Phoenix and/or Las Vegas are also possible, especially at some point down the road, but Denver is higher yielding and closer.

Southwest failed in its attempt to establish a hublet in Philadelphia. The PHL-RDU route is a holdover from that. So don’t expect CLT-PHL on Southwest. St. Louis isn’t happening either.

The wildcards are Houston and Nashville. Nashville is about 90 percent of the market size (by dollar value) of Atlanta but only one airline current serves the route (US Airways, of course). So that seems possible. Houston once a day? Maybe, Southwest does that sort of stuff.

So overall between 8 and 13 flights a day. A bit more serve that what AirTran currently provides but not a radical increase in service. Or put another way, we’re likely to only have a little more service than Charleston, SC gets.

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More gutless pols unwilling to take a stand

On critical issues. Like barbecue:

Earlier this month, organizers announced the DNC’s three official barbecue sauces – in tomato-, vinegar- and mustard-style – selling as a $25 set to raise money.

Is there a more perfect metaphor for early 21st century American politics than that? Pandering but not wanting to offend anyone. Would single out the Democrats for criticism here but I’m not sure the Republicans are any better.

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NASCAR HOF voting analysis

Presented as a public service, largely because the NASCAR HOF is here in Charlotte and most sportswriters have the analytical ability of a head of lettuce.

The NASCAR Hall of Fame picked its fourth class of five inductees yesterday. Selected were Rusty Wallace, Herb Thomas, Buck Baker, Cotton Owen, and Leonard Wood. The way the voting works is that the top five vote getters among 25 nominees are elected; the remaining 20 nominees stay on the ballot for the next year and five new nominees are added.

• Wallace (55 wins), Thomas (48 wins), and Baker (46 wins) were the drivers with the most top-division wins on the ballot. With their election, the top 12 retired drivers with the most wins — all 12 have at least 46 — are now in.

• While the pattern for drivers is clear (working its way down the list of winners, just like you’d expect), it’s less clear for race team owners. Rick Hendrick and Richard Childress were on the list of original nominees but haven’t been elected yet while Owen and Leonard Wood, who were only added last year for the third vote, are in. And yes, NASCAR politics has a lot to do with Hendrick and Childress not being in yet.

• NASCAR described this year’s voting as the closest yet because Buck Baker and Fireball Roberts tied for the fifth spot, with Baker winning the runoff. Much more interesting that the vote was much more spread out this year. Last year, those elected got about 68 percent of the total votes cast. This year, it was only 51 percent. Of the 54 possible votes, Leonard Wood and Herb Thomas each got 31, Rusty Wallace 28, Cotton Owen 27, and Buck Baker and Fireball Roberts 21 each. The remaining 19 candidates combined for 111 votes (41 percent off all votes cast) but averaged just under six votes each. Put another way, the typical voter used two of their five votes on people that didn’t finish in the top six.

• It’s always thought that the people that are listed as “also receiving votes” are next in line to get in. Last year, Jerry Cook, Cotton Owens, Raymond Parks, and Herb Thomas fell in this category. Well maybe. Owen and Thomas did get in this year, Cook was seventh in this year’s voting while Parks wasn’t even among those listed as doing particularly well.

• In terms of giving a boost to Charlotte, this is about as good as it’s going to get for a long time. The quality and name recognition of the inductees will necessarily go down over time. The exception is when a recently retired star driver gets in. But we had that this year too — and some controversy that Rusty Wallace got in “too soon.”

• Richard Petty had the best quote on the selection: “We’ve got to be careful ’cause we can’t put all five dead people in at one time.” That’s a quite valid concern. Of the 20 people that are carried forward to next year’s ballot, only six are alive. And the youngest is Rick Hendrick, who turns 63 in July(!). Of course, having more nominee that aren’t eligible for social security would do increase the HOF’s relevance going forward.

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