US Airways cancels Delta acquisition

[turbocraig]

http://yahoo.brand.edgar-online.com/EFX_dl...97K2EXV99W1_HTM

Slides 10-12 are exactly what I was talking about. That is crazy coverage for one airliine. If the DOJ approves that, then we as a fare-paying public are in big trouble.

[uptownliving]

For those of you that think the CLT hub will be closed due to its proximity to ATL, how far away from ATL would CLT have to be for you to change your mind? 300 miles, 400 miles, 1000 miles?

Just curious to know. Also any reasoning behind the number you chose would be interesting to hear too.

[dubone]

That is a good question U/L. I've been wondering that myself.

[turbocraig]

What's the distance between Atlanta and Philadelphia? I'm guessing that's optimum for an airline looking for East Coast hubs.

You know, I said that initially as an 'off the cuff' remark, but really.. Philly has the capacity to handle the Northeast corridor and has filled that role for a long while, and grown into a European gateway as well.

Atlanta has done the same in a Southeast capacity and added not only Europe, but Asian and South American routes as well (sometimes with the help of a codeshare partner), but I could easily see a future of East Coast air traffic handled at ease without Charlotte being a part of that, sad as it sounds to us.

[monsoon]

Indeed. That is the way it used to be when Eastern Airlines and Delta Airlines were both based in Atlanta, and there wasn't hub in Charlotte. I see us headed back to days like that. That hub controlled almost air traffic in Charlotte.

[uptownliving]

Just some numbers I thought I would throw out there:

-With the opening of the 3rd parallel runway in Charlotte, USAirways will save at least $22M per year in fuel costs.

-On a per passenger basis Atlanta costs about 25% more than Charlotte.

-So far in 2006 average departure delay times in Atlanta are about 20% longer than Charlotte.

-So far in 2006 average arrival delay times in Atlanta are about 70% longer than Charlotte.

-On a percentage basis twice as many flights to/from Atlanta are cancelled compared to Charlotte.

All those stats I listed arn't just a customer service issue, they are also a cost issue, it costs an airline money to have those planes sitting on a runway or circling an airport going nowhere.

It doesn't make sense to me for an airline to close down the hub in Charlotte, and pay a 25% premium to shift a lot of that traffic to Atlanta and get inferior performance out of your system in the process. Spending more to get less is not how airlines turn a profit.

[dubone]

How does Charlotte compare to Cincinnati in terms of cost? Cinci isn't that much farther from Atlanta than Charlotte. It seems that a way to keep the valuable Atlanta operations and the profitable Charlotte operations, might be to cut Cinci rather than Charlotte. Does Cinci have more local traffic than Charlotte or cost as low as Charlotte's airport does?

[monsoon]

Atlanta is building a new runway too, so one could assume to see the same related reduction in costs.

[German-Mexican-Dude]

Pheonix and Las Vegas are not that far from eachother.

ATL and CLT will "Complement" eachother.

How often do business people drive to ATL and fly out of there from Charlotte?

Charlotte is a Business city.Business people {Or at least me} could careless if i save my company pocket change as long as i get a direct flight.

What is the point of getting rid of CLT.If it is profitable with no competition, Why not keep?

If you have not heard United,and Northwest are shopping following parker.Both looking at continetal. US is just on the move so we are not left out of mergers.

Trust me,This is good if anything to Charlotte. the Non-revs get to fly a whole lot more places, and we will be the Highest paid.So all the biz people need to fly. DO you expect them all to hitch a 767 to ATL or something?I know a ton of regional sales managers who rather die than not get a direct flight, or go to ATL for that fact.I know a ton of people who avoid ATL ,and Dulles, and when they go to Chicago they go to Midway instead of the United/American hub.

[uptownliving]

ATL and Cincinatti are about 370 miles apart.

Cincinatti is an even more expensive airport than Atlanta on a per passenger basis, coming in about 50% more expensive than Charlotte.

However they completed a third parallel runway last year so their average departure delay is about 20% less than Charlotte, and on average the planes in Cincinatti actually arrive ahead of time, which is much better than Charlotte. However Cincinatti still has twice as many cancelled flights on a percentage basis as Charlotte.

[uptownliving]

Atlanta is building a new runway too, so one could assume to see the same related reduction in costs.

[monsoon]

USAir is being asked to pay for 1/2 of the cost of the 3rd runway in Charlotte. They can sure save a lot by not doing this.

[uptownliving]

USAir is being asked to pay for 1/2 of the cost of the 3rd runway in Charlotte. They can sure save a lot by not doing this.

[monsoon]

That is simply not true. The FAA is paying for 75% of the cost of the 3rd runway. The remainder will be funded by bonds paid for with the Passenger Facility Charge (PFC) which that comes directly from passengers that use the Charlotte airport. Not the airlines.

[uptownliving]

From this article.

The runway is expected to cost roughly $100 million. The federal government may pay for half of it, while airlines will pay the rest through user fees. Building the runway, while not having the traffic to use it, would cause landing fees and other charges to increase.

Note the goverment may pay 50%, and the Airlines, mainly USAir are being asked to finance at least 50% by charging customers fees to use the airport. $50M is a major expense they can simply avoid by going to Atlanta.

[monsoon]

One link vs another.

It really doesn't change the fact that the airline will not operate two 600+ planes/day hubs right next to each other. These are barely 30 air minutes apart. They will end up greatly reducing one and building up the other and I would bet my money they will choose to remain in the busiest airport in the world rather than move this traffic to CLT.

Charlotte will retain some flights but its day as a major hub are over if this deal goes through.

[A2]

What I would be PISSED about as an employee with USAirways is that they managed to get hundred's of millions in concessions from its mechanics and pilots just to stay afloat, then in an ironic twist, they all of a sudden have over $8,000,000,000 in cash and stock to purchase Delta.

I would be raving mad if I were a worker who has had to continually give up on pay and benifits just to have USAirways pull a fast one that has more overlap than almost any merger in airlines history (with money that they gave them through continued concessions! )! It has been on the backs of the workers that the elite few get to play Mr.Monopoly. This is definatly a merger that is being pitched to suckers, if it is allowed to pass. This morning on the Carolina Business Review, the host (along with other guets) commented on how the business community is watching with bated breath to see the outcome. My guess is that the business community would come out in opposition to this merger as it would DIRECLTY impact them. BofA is one of the banks that was spoken about being against the merger, since it would have huge impacts in and out of the corporate HQ city. This is a direct blow to Charlotte and its Business community. Not to mention many other cities businesses if this were to pass.

I could see also some serious clout in the unions coming together to block this. Not only from USAirway workers, but from Delta's as well. Each stand to lose if the merger were to be approved.

I seriously doubt the DoJ wants to stir up a heated battle with the unions, in an already struggling industry, wth an approval of a merger that makes almost NO financial sense except to a few Billionaire Bond holders.

Not to mention, with the Democrats gaining control in Congress, I give this deal a less than 25% shot of being approved.

A2

[RiverwoodCLT]

A2 I hope you are right on this merger chance of getting approve.

[A2]

A2 I hope you are right on this merger chance of getting approve.

[redjeep77]

I do as well. I really don't see it going through personally. But who the heck really knows . If it does go through I only see it as a negative for Charlotte. Sorry to be so glum.

A2

[Cybear]

I was just browsing the latest posts on this thread and happened to note the poll numbers. Would any of the roughly 6% of those among us who believe that CLT will be THE surviving hub (vis-

[moving uptown]

i voted against charlotte remaining as a hub however one suggestion would be that charlotte would maintain a hub airport in which connecting domestic traffic flowed through and atlanta would be the international hub. meaning, charlotte would lose the caribbean flights but gain other domestic flights. this sounds somewhat viable as operating costs of clt are 25% lower than atl

[dubone]

That's an interesting option. It would allow for lower delays of more time sensitive domestic flights, and the lower cost you mentioned. It could also reduce congestion in Atlanta, and take advantage of higher relative capacity here.

I just hope something happens. Even though it isn't the end of the world to lose the hub, there is quite a bit of economic impact that we'd really miss.

[Cybear]

There is an article in today's Atlanta Journal-Constitution entitled: Phoenix mostly shrugs at prospect of Delta merger. Among other things, the article gives a brief profile of USA's Chief Executive, Doug Parker. I found both the profile and the article worthwhile. Here's a link:

http://www.ajc.com/news/content/business/d...ltaphoenix.html

[monsoon]

.....

I just hope something happens. Even though it isn't the end of the world to lose the hub, there is quite a bit of economic impact that we'd really miss.