CHARLOTTE, N.C. (TheStreet) -- Charlotte's outspoken airport director said adding international service at Houston Hobby Airport would not be in Houston's best interest.
If Houston enables the expansion, its airports "are competing against themselves, and that makes no sense," said Jerry Orr, longtime director of Charlotte/Douglas International Airport, in an interview. "It's not good for the people (of Houston).
"You have to do what you think is in the best interest of the people, not what some airline tells you to do," Orr said.
Houston Airport System Director Mario Diaz, who backs Hobby expansion, responded: "I would only have one comment and that would be that I agree with Jerry Orr that 'You have to do what you think is in the best interest of the people, not what some airline tells you to do.'"Orr took a position on an issue that has divided Houston. Southwest (LUV) wants to fly from Houston Hobby Airport to Mexico, the Caribbean and Central and South America. It has proposed building a five-gate international facility, opening in 2015. The project requires city council approval.
United Continental (UAL) opposes the expansion, which it said would lead to diminished service at its biggest hub at Houston Bush Intercontinental Airport. The two carriers have sparred over competing interpretations of the project's estimated economic impact. Bush Intercontinental is the country's eighth busiest airport, while Charlotte Douglas is 11th. Both airports are dominated by single carriers that operate flourishing hubs with hundreds of daily departures to domestic and international destinations. On Thursday, Houston Mayor Annise Parker announced her backing for Southwest's plan after she secured the airline's agreement to pay the $100 million cost of the expansion. "Our proposal shows that we are committed to bringing international service to Hobby, without the city taking on additional debt," said Southwest CEO Gary Kelly, in a prepared statement. Why would anyone in Houston listen to Jerry Orr? First, Charlotte Douglas and Bush Intercontinental are similar airports, homes of the largest and most profitable hubs for the carriers that dominate them. US Airways (LCC) operates 631 daily departures at Charlotte, the third-largest U.S. hub operation after Atlanta, with about 997 daily departures, and Dallas, with 740. Houston has 620. US Airways President Scott Kirby has said that Charlotte is the fourth most profitable major airline operation in the country, in terms of profit margin, after Newark, Washington National and Bush Intercontinental. In terms of total passengers, Bush is the country's eighth largest airport while Charlotte is 11th. Orr, airport director since 1989, is respected because he has built the airport while keeping costs low. Today, airlines using Charlotte Douglas pay an average per passenger cost of 77 cents, by far the lowest for any major airport. Most major airports are closer to $10 and some are over $20.
Last year, Moody's raised the rating on Charlotte Douglas revenue bonds to A1 from Aa3, praising "the airport's extraordinary financial operations in spite of the national economic recession, resilient enplanement levels and the strength of the local demand for air travel." Airline CEOS including Stephen Wolf and Doug Parker of US Airways, as well as Dave Barger of JetBlue (JBLU) have singled Orr out as one of the country's best airport directors. In a 2010 interview, Barger called Orr "an institution" and "an industry gem." Recently, US Airways executives, speaking to reporters at the airline's media day in Tempe, Ariz., said that if Orr wants to build a new runway at Charlotte Douglas, they would back the project because Orr could keep the cost low. Estimated cost of a new Charlotte runway is about $120 million, compared with an estimated cost between $1.8 billion and $3 billion for a proposed new runway that Philadelphia International Airport, also a US Airways hub, wants to build. -- Written by Ted Reed in Charlotte, N.C.
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