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US Airways: Nod to Charlotte

Stocks in this article: LCC DAL

It came as a shock when the carrier first suggested in 2003 that it might eliminate the Pittsburgh hub. But the operation had become a losing proposition, a result of the newly higher costs and the emergence of nearby hubs in Cincinnati, Cleveland, Detroit and Chicago, which performed the same role for other airlines.

With Pittsburgh shrinking, it could no longer supply enough local passengers, particularly higher-paying business passengers. And competition was fierce for outlying passengers who could connect in whatever hub they chose. US Airways lost $40 million in Pittsburgh in 2007, before a round of cutbacks, said spokeswoman Michelle Mohr.

"Pittsburgh was a beautiful airport," says Mike Flores, president of the US Airways chapter of the AFA. "It was centrally located, the runways and facilities were excellent and the new terminal enhanced that. It worked well, when airlines made money."

Today, carriers count pennies. Yet Charlotte is growing, first because "even with the banking industry in a bit of distress, Charlotte is still heavily business-traveler-oriented," Flores said. Secondly, along with the Delta's (DAL) hub in Atlanta, Charlotte is one of just two Southeast hubs. Thirdly, current management "is some of the strongest we have had in 25 years," said Terri Pope, vice president for the Charlotte hub. "They understand revenue."

As elsewhere, the benefits of a hub airport compound. So even as Charlotte suffers from banking sector turmoil, the hub lures new business. Last week, Swedish appliance company Electrolux moved its North American headquarters to Charlotte. The airport played a key role, said Charlotte Chamber President Bob Morgan. "Every company that looks at Charlotte is looking in part because of Charlotte/Douglas," he said.

-- Written by Ted Reed in Charlotte, N.C. .

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