How the American Air Merger Helped Charlotte, Philly and Fort Wayne

CHARLOTTE, N.C.  (TheStreet) -- Since the November merger between American (AAL) and US Airways, the combined airline has modestly reduced the number of departures, but modestly added capacity due to bigger aircraft. Seventeen cities lost Washington Reagan National flights due to divestiture, with the result that a few airports gained new service, primarily to Charlotte and Philadelphia.

Fort Wayne International Airport in Fort Wayne, Ind., is among the lucky ones. On Oct. 2, US Airways Express will launch daily service to Charlotte and twice-daily service to Philadelphia.

Read More: American Airlines Must Deal with Regional Pilot Pay Issues, Says Lee Moak

For the Charlotte and Philadelphia hubs, with 142 and 124 destinations, respectively, Fort Wayne is simply one more destination dot on the map.

But for Fort Wayne, with 10 destinations including five hubs and five Allegiant (ALGT) airports, Philadelphia service provides a long-sought East Coast destination, while Charlotte represents an easy path to the Caribbean, connections throughout the Southeast and an alternative to Delta (DAL) in Atlanta.

Read More: Delta Is Right on the Ex-Im Bank: Too Bad the Tea Party Is Its Biggest Ally

 "We're really excited about American coming and serving our community," said Scott Hinderman, executive director of airports for the Fort Wayne-Allen County Airport Authority. "We don't have a Northeast connection, so somebody going to the Northeast or flying internationally (eastbound) has to go to Chicago or Detroit. We have been working on trying to get hub connectivity for a long time."

As for Charlotte, "It has a lot of connectivity, both international and domestic, and it provides good connectivity to the Caribbean," Hinderman said. Additionally, Charlotte "will bring some competition in the marketplace," he said.

A comparison of the combined airlines' October 2013 and October 2014 service levels prepared for TheStreet by consulting firm Mead & Hunt showed that departures declined 0.7% to 200,140 during the period, but total seats increased 1% to 20.7 million.

Major influences on the service levels have been the addition of new Boeing 777s to the American fleet, as well as US Airways' divestiture of 52 slot pairs at Washington Reagan National Airport, resulting in the discontinuation of service to 17 cities, part of the price of the merger, said Jeffrey Hartz, senior air service consultant for Mead & Hunt. Both events freed up aircraft.

Since the merger, American and US Airways have added or scheduled 21 new flights, headed by Dallas to Shanghai and Hong Kong with new 777-300s. But the largest share of the new flights is from hubs to the country's mid-section.

Charlotte has added service to Tulsa, Okla., Oklahoma City, Grand Rapids, Mich., and Fort Wayne. Philadelphia has added Charleston, W. Va.; Cleveland; Fort Wayne; Grand Rapids; Lexington. Ky., and Memphis. Phoenix added Cleveland. Dallas and Chicago will add Bismarck, N.D. Also, Miami and JFK will add Viracopos, Brazil, and Miami will add Cap-Haitien, Haiti.

"The majority of the growth has been new routes from US Airways cities, funded with aircraft from DCA," said Hartz, who consulted for the Fort Wayne airport. Before the merger, "US Airways had nothing in the Midwest," he said. "But now, look at all the Midwest opportunities" that can be had, building on American's long presence in the region. 

American, meanwhile, has lacked strength in the Southeast. But now, North Carolina cities like Fayetteville and Wilmington could gain service to Chicago or Dallas. "There are dozens of routes that never would have worked before," Hartz said.

Read More: 5 Most Beloved U.S. Airlines of All Time

Charlotte's domestic gains have been accompanied by merger-related international losses. Charlotte will lose its non-stop Sao Paulo service on Oct. 1 and its non-stop Rio service at year's end, seemingly an acknowledgment that an airline with a Miami hub need not bother to seek out additional connecting points for Brazil service.

As for Fort Wayne, the US Airways destinations may be the most important additions but they are not the only ones. The airport accommodated 368,199 passengers through July, up 9% from the total in the first seven months of 2013 and up 12% over two years.

Allegiant added twice weekly Mesa service in October 2013. United Express added a fourth daily Chicago flight in April. In July, Delta replaced a 50-seat jet with a 76-seat jet on its midday Atlanta flight, and on Sept. 1, Delta added a fourth daily Atlanta flight.

The gains reflect the area's business and community leaders' support for airport expansion, Hinderman said. "They came together and started identifying what they could do to make Fort Wayne a better place for business, and one was to improve air service," he said.

Following the commitment, airport officials approached every major carrier. US Airways was first to respond, and Hinderman met with airline officials in Phoenix late last year. Fort Wayne offered incentives that included waiving landing fees for a year, $100,000 in marketing assistance and a two-year revenue guarantee. The cost is largely paid, Hinderman said, by a $600,000 federal grant the airport secured to promote new service.

What's next? Hinderman said he is talking with United (UAL) about Newark. "We believe we will have Newark service, but we are still a small airport and the airlines want to sit back and see how Philadelphia performs," he said. And not to say that Fort Wayne's small airport has has very big dreams, but one of its two runways is 12,000 feet long -- long enough to accommodate any jet in the world.

Written by Ted Reed in Charlotte, N.C.

To contact this writer,
click here.

Follow @tedreednc





At the time of publication, the author held no positions in any of the stocks mentioned. This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

If you liked this article you might like





3 Companies Warren Buffett Could Buy With His $116 Billion Cash Pile

3 Companies Warren Buffett Could Buy With His $116 Billion Cash Pile

Warren Buffett: 'Would Never Bet' Against Amazon but Missed Chance to Buy Shares

Warren Buffett: 'Would Never Bet' Against Amazon but Missed Chance to Buy Shares

General Electric Announces Board Slate, Introduces Three Director Candidates

General Electric Announces Board Slate, Introduces Three Director Candidates