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Archive for January, 2014

DCA slot sale results

As a condition of approving the US Airways/American Airlines merger, the US Department of Justice required that the airlines divest themselves of 44 sets of takeoff and landing slots at capacity-controlled Washington Reagan National Airport (DCA). “Divest” in this context means sell off to other airlines with limited slot holdings at the airport. The resulting slot auction has now been held, and Southwest Airlines won 27 slot pairs while JetBlue won 12 slot sets. The winner of the remaining five slot pairs hasn’t identified themselves yet.

I’ll talk about the impact that this has on US Airways & American Airlines soon in a separate post, but for know some thoughts on how the other side of the equation: How Southwest responds to getting 27 slots pairs at DCA. Contrary to what many people believe, Southwest is not a point-to-point carrier in the eastern U.S. They very much do have a series of non-banked hubs — Houston Hobby, Dallas Love Field, Chicago Midway, Orlando, Tampa, Nashville, Baltimore, and St. Louis which is where plus Kansas City and maybe Ft. Lauderdale the scarce DCA rights will be used to. Sorry Queen City, no Southwest to DCA for you.

Southwest now has to operate 27 flights come sometime later this year that they didn’t expected they’d have the chance to fly three months ago. Which is to say, the planes to fly those new DCA routes have to come from somewhere. As I’ve said before, at minimum that makes it less likely, other things being equal, that Southwest will add flights from here in Charlotte in the near future. All things may not be equal though, as Southwest hasn’t been doing well in Greenville/Spartanburg and one option would be to end service there to get a portion of the aircraft time needed for the additional Reagan National flights. Were that to happen, it would be a game changer (for the better over time) for Southwest here in Charlotte as well.

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Chrlotte votes to spend money on the trolley

No, not actually build the streetcar line, but instead spend $12 million to do the engineering work on the line. The story is that this will demonstrate to the federal government how committed Charlotte is to the project, thereby increasing the odds the feds will pick up half the construction cost.

Let’s be real here: A majority of people on Charlotte City Council really, really want to build at least the first phase of the streetcar line along Beatties Ford Road. And council has already implicitly voted to raise property taxes to do so. Obviously, city council would prefer if the feds picked up half the cost, but if that isn’t going to happen, the line will still get built. The only question is when the decision is made and what sort of very small political fig leaf will be used to say that an explicit property tax increase wasn’t involved. Part of the justification for building the line completely at city expense will most certainly be that since the design work is complete, it would be a waste not to build it.

Bonus observation: Since Charlotte politicians no longer fear voters over tax increases, even tax increases in election years, and the Republican party is pretty much irrelevant in the city, a further fig leaf of deniability of raising property taxes to build the streetcar may not even be necessary.

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Craft beer is popular, so why not craft mixed drinks?

For those that aren’t regularly liquor drinkers, here’s a fascinating article in the Asheville Citizen-Times on that city’s growing craft mixed drink scene. A key point: better times mean that people buy better quality liquor:

[Asheville ABC] System head Mark Combs said sales, which were $23.7 million in 2012-13, are growing not because people are drinking more but because they are drinking better. The volume of liquor sold has been relatively flat, he said.

“My customers are buying up. … They’re not buying a $10 bottle of vodka, they’re buying a $20 bottle of vodka,” he said. “We sell about the same number of bottles.”

And there’s also an increase in bars offering pricey craft cocktails:

But local bartender Jasper Adams said the city’s cocktail scene is changing rapidly. About half a dozen bars have significant craft cocktail offerings, he said.

“There are … more bars that are specializing in harder-to-find and premium spirits. There’s still plenty of room to grow, but there’s a growing number of bartenders who know how to use them,” he said.

Adams works at The Imperial Life, above Table restaurant on College Street.

Bartenders there sit down weekly to discuss what ingredients are available and plan the bar’s cocktail offerings accordingly. Some syrups or other components may require several days of preparation before they are ready for use in a mixed drink.

“The challenge with doing something like this is to make sure we’re making a delicious, premium product but also make sure we’re not in some unobtainable price range,” Adams said.

Craft cocktails, he said, typically run $8 to $13 in Asheville. That might be more expensive than some customers are accustomed, but Adams said they keep coming back.

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Charlotte won’t bid on the RNC

The first two sentences of UPoR’s story on the decision not to bid sum the situation up nicely:

A month before bids are due, the city of Charlotte announced Friday it will not try to land the 2016 Republican National Convention.

The city was considered a successful host of the 2012 Democratic National Convention, which was estimated to generate an economic impact of roughly $164 million for the region.

There are only two ways to interpret this:

1. Given the simply incredibly massive economic impact, the decision amounts to a complete and utter act of surrender by Mayor Patrick Cannon and Gov. Pat McCrory. Where these gentlemen true leaders, they would have found a way for the city and state to put a credible bid together.

2. In the alternative, not bidding is no big deal because those simply incredibly massive economic impact numbers are basically just made up, and the real-world impact of holding a major political convention is rather minimal, though the usual power brokers get their egos stroked.

I know which way I lean on this…

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Why retailers come to an area

I’m a sucker for a good business news story, and just came across on in the Asheville Citizen-Times, examining “Why no Bass Pro or Academy sports in Asheville area?” The basics:

The request list goes on: Macy’s, Hobby Lobby, Academy Sports, Bass Pro Shops, Ikea, Zara, Forever 21.

So, why don’t all these retailers just locate here and satisfy the mountains’ voracious shoppers?

The reasons get complicated, but it comes down to the numbers — household income, population density, potential profitability and more — and then finding land, a building and rent that fit the budget.

Some of it also comes from the fact that retailers occasionally overlook or undervalue the Asheville market when strictly adhering to basic data, experts say.

And yes, the best-run retailers have complicated statistical models that predict store profitability.

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Of deer

The McClatchy Twins have an article out about the Cherokee’s attempts to up the deer density on lands they own in the N.C. mountains (really). An interesting quote:

“People assume that deer live in the deep forest, but deer really prefer a mix of forests and fields. That’s why they like our subdivisions. We have nice little fields planted for them in the woods, and the fields happen to be our yards.” — Brad Howard of the N.C. Wildlife Resources Commission

Update: Another informative quote from the same story:

Loggers frequently are criticized for practices that degrade wildlife habitat, but clear-cutting is great for white-tail deer.

“After you cut everything down, for the first four or five years there is a tremendous amount of browse and food available for deer, and they respond by having more fawns,” said wildlife biologist Perry Sumner, a 31-year veteran of the state Division of Wildlife Management.

“It also makes it harder to hunt them there, where the terrain is pretty thick. The deer population will basically explode once you do that,” Sumner said.

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Why Amazon will start charging NC sales tax

Simple enough, because they’re coming to North Carolina, as in physically establishing a presence in the state. Amazon’s business model is shifting towards having more warehouses, which allows they to ship products to their customers faster and, more importantly, at a lower cost to Amazon.

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NASCAR is turning off fans both old and new

That’s the title of a column by USA Today’s Matt Crossman on the latest proposed changes to the Chase. Among the points he makes:

Racing is the simplest sport there is: Start here, first one there wins. Yet NASCAR has progressed from a simple championship system based on consistency to one based on consistency plus a semi-mad dash at the end to a (proposed) needlessly complicated mess.

First cut the field to 16, then cut it to something else, then cut it again then — click, football is on. At this point, NASCAR should just buy an officially licensed dartboard, put drivers’ names on it, give a lucky fan selected via market research a dart to throw, and whosever name gets hit wins the championship, as long as it’s Dale Earnhardt, Jr

and

Instead of asking themselves, “is changing the points system a good idea?” NASCAR officials ask themselves, “will people pay more attention to us if we do this?” Instead of focusing on being the best NASCAR it can be for NASCAR fans, NASCAR seems to want to be the best NASCAR it can be for non-NASCAR fans. The end result has been non-fans staying that way and longtime fans joining them. The proposed new points system will continue that trend, no matter how many “Game 7″ moments it creates.

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Lufthansa fights to keep CLT-MUC

With MUC being the airport code for Munich, Germany. The Charlotte Observer has an informative article on Lufthansa’s efforts to keep the route going once US Airways leaves the Star Alliance, which the German airline is a key member of. Good to see Lufthansa trying; time will tell whether they are successful.

One key aspect the article doesn’t get into is that American Airlines traditionally doesn’t do well at all in Germany. American currently operates a combined total of one flight a day to Frankfurt and Munich, Germany’s top two markets (Dalls/Ft. Worth – Frankfurt). That’s it. Thus, one thing the combined carrier hopes to get out of the merger is a stronger presence in certain European markets, beginning with Germany. So the other part of the equation is going to be how well the New American can do from Philadelphia to Frankfurt and Munich and from Charlotte to Frankfurt after it leaves the Star Alliance, and thus is less attractive to Lufthansa’s vast German frequent flyer base and can’t offer the same level of codeshare connections to destinations on the continent. Time again will tell, but it’s doubtful that CLT-Frankfurt will be double daily in summer 2015 like it is this coming summer.

Two inaccuracies in the story: The Munich flight isn’t quite daily in winter — it’s only operating six days a week this month and in February, but will be back up to daily come March. Then there’s this quote: “[New York-based aviation analyst Bob] Mann said Lufthansa might consider downsizing the Charlotte-Munich flight to a smaller aircraft than the Airbus A330 that operates the route.” That isn’t really an option, as Lufthansa proper doesn’t have aircraft with transatlantic range smaller than the Airbus A330-300s or A340-300s that the airlines flies to Charlotte during the winter. Which means that if Lufthansa were to cut capacity to CLT next winter — demand to/from Europe is strongly season — it would have to come by the airline offering fewer flights a week.

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Time Warner Cable channel numbers will be changing

For their digital tier, coming sometime soon. And yes, there will be a quiz. The Winston-Salem Journal provides a summary of the changes here, which will take place in two phases in early March in the Triad. Haven’t seen a date when the changeover will happen in the Charlotte area.

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