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US Airways Charlotte Hub: Ready for Anything

Stocks in this article: AAMRQ.PK DAL LCC UAL

CHARLOTTE, N.C ( TheStreet) -- Either way, US Airways' (LCC) Charlotte hub is primed to grow in 2013.

With creditors in the American (AAMRQ.PK) bankruptcy case apparently in the late stages of evaluating a merger, many in the airline industry expect US Airways and American to combine early in the coming year. That would make Charlotte the second biggest hub for the world's largest airline.

But even without a merger, Charlotte is growing. Next year, non-stop service to London Heathrow will begin March 30; Charlotte will become one of just 14 U.S. cities, including Raleigh-Durham, with service to Heathrow on a U.S. carrier. On May 5, Charlotte-Sao Paulo, Brazil service will begin, complementing existing Charlotte-Rio de Janeiro service that began in 2009. US Airways has said that a merger would mean about 50 additional daily departures, as it would push more passengers through Charlotte.

Charlotte is already the world's third- or fourth-largest single-airline hub. US Airways' winter schedule has 601 daily departures, down from 631 this summer, when Delta had 994 Atlanta departures, American had 740 Dallas departures and United had 620 Houston departures. Comparing Charlotte and Houston is difficult. United averaged 584 Houston departures during calendar 2012, but had 652 daily departures on peak days in July. Houston tends to have longer flights and more revenue passenger miles, which measure the number of passengers flown one mile.

Within the ranks of the Charlotte hub's management team, a sense of wonder still exists that a livable, largely suburban, medium-sized Southern city has become one of the most important U.S. airline hubs.

"We have more (departures) than Air France in Paris, more than British Airways in London," said Terri Pope, Charlotte station manager since 2000 and vice president for the Charlotte hub since 2009, speaking to about 60 hub managers at an annual Christmas lunch on Thursday. "Yep, Charlotte, North Carolina," she reminded.

Hunter Miller, senior manager for customer service, recalls that he started working for US Airways predecessor Piedmont Airlines in Roanoke, Va., in 1979. Roanoke was then one of Piedmont's three largest stations, with about 60 daily departures, similar to Piedmont's levels at Atlanta and Washington National.

"The thing that amazes most employees is not the fact that we have grown so big, since Charlotte has been the largest hub for US Airways for quite a number of years, but the fact that we are the second-largest airline hub east of the Mississippi," Miller said.

At the lunch, managers reviewed the year's accomplishments, including successfully managing record local traffic for the Democratic National Convention in September. Throughout the year, Charlotte's operational performance was strong. Pope ticked off metrics including a best-ever, 11-month 68.1% rate for aircraft departing by D-0, or exactly as scheduled; a best-ever 79.2% for aircraft arriving on time, and a best-ever 73.4% rate for successful aircraft turn times, as measured against a base of how long it ought to take. Levels for mishandled bags were also at record lows. "It's all about you guys," Pope told her staff.

Under Pope, the Charlotte hub has flourished, particularly since the 2005 merger with America West. 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 Houston. US Airways now employs about 7,000 people in Charlotte, including a dedicated human resources manager, a system heavy maintenance manager and two corporate communications staffers.

Mike Bryant, the airline's director of tower operations, is at work on an innovative project to determine whether hub operations around the world might benefit from a new approach in which aircraft remain at the gate longer, rather than moving as quickly as possible into a line to await take off. The change could result in a bit more time before flights close their doors, leading to fewer missed connections and mishandled bags. But hub management, involving hundreds of daily departures by various airlines, is a complex field and Bryant is at the early stage of his research.

Perhaps the biggest concern for the Charlotte hub is not the increased traffic that would result from a merger, but rather the potential retirement of Jerry Orr, 71, longtime director of Charlotte/Douglas International Airport. Orr is recognized as one of the country's best airport managers. In many cities, airport integrity is challenged by local government officials who look enviously at airport revenue and wonder why they do not have more control over it. Orr, airport manager since 1989, is largely able to resist political interference with the airport's $85 million annual budget, paid entirely by airport operations. But who is to say that a younger, less-established successor could do the same?

Pope spoke about Orr, telling her managers: "He has been our biggest advocate and our best partner. He is the best aviation director in the industry (because) he has always felt that if he could produce the best product at the lowest possible price, he has succeeded." At less than a dollar per passenger, Charlotte has the lowest per-passenger charge of any major U.S. airport.

As widely respected as Orr is, Pope nevertheless told her employees: "(Even) if you don't know him, you need to stop him and sincerely thank him. I don't think (anyone) can hear that enough. We are successful in Charlotte largely because of him."

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

>To contact the writer of this article, click here: Ted Reed

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