When American announced that they’d be keeping all of the current hubs between American and US Airways, it seemed odd that they’d be keeping so many focus cities, especially since many of them are within such a close distance of each other, or provide the same service of flights.
Could American be considering closing their Charlotte hub?
What prompted this discussion is an interesting article in the Charlotte Observer.
Charlotte is actually the second biggest hub in the network, behind Dallas/Fort Worth, interestingly, however the vast majority of the traffic their is connecting to another destination, and not originating there. 650 flights originate there, connecting to both domestic and international destinations.
With North Carolina’s tax break on jet fuel set to expire soon, American is trying to negotiate, saving 18 million dollars. If the tax break isn’t extended, Charlotte will be the third highest cost of jet fuel, with Chicago and Los Angeles leading the way.
So, this begs the question of whether American would consider closing the Charlotte hub, if they can’t get a break on fuel. We’ve seen other airlines close hubs for similar reasons – take Delta in Cincinnati, for example.
With Chicago, they can justify the traffic. There’s a mix of local and connecting traffic, and it’s a competitive hub being located mid-way in the country. With Los Angeles, it’s a strategic gateway for international flights to Asia, and a connecting point for flights along the California coast and west. It’s doubtful they’d consider closing either of these hubs, even with the high fuel tax. Further, both cities are also hubs for other airlines, and if American pulls out, they leave the competition with a clear advantage.
But, in Charlotte, there is no competition. There’s hardly a reason for it to continue due to routings, since a majority of the European flights can depart from JFK, Philadelphia, or, even Miami.
I personally dislike the Charlotte hub, for me living outside of DC. It’s too close to me, and connecting there provides two short haul flights. I don’t like breaking up what could be non-stop flights to Florida or other designations, simply by having a half-way point. That’s more of a personal preference than a strategic one, of course.
What do you think? Do you think American would consider closing their Charlotte hub?
Jamie Larounis is an avid traveler, blogger and miles/points educator. Traveling well over 100,000 miles a year and staying in hotels for over 100 nights, he leverages miles, points and other deals to fly in first class cabins, and stay in 5-star hotels. The Forward Cabin shares his experiences, musings, reviews, tips, tricks, resources and industry news with you, the fellow traveler.
CLT should be demoted to an Envoy hub. CLT serves a lot of small towns in the south, and it would be a shame for AA/US to give up their competitive advantage with those markets. If CLT loses its hub status entirely, these towns would have to be served from PHL or MIA, which are too far out of the way for that purpose. It may be worth considering demoting PHL to an Envoy hub as well (to serve northeast towns) so that the expensive slots in NYC have can focus on bigger planes.
Interesting take! Great idea, actually. Thanks for your thoughts.
You forgot about the all of the business (read: banking) travel that requires CLT to act as a hub.
Please don’t kill Charlotte. Delta is already killing us in the south/mid-Atlantic. I fear without CLT it will get much worse.
The big issue would be giving up US Airway’s competitive advantage in the Mid Atlantic and South East, an area where American’s route network wasn’t all that good to begin with. Unless PHL is re-purposed away from being an international as well as domestic hub, AA would be exposed in that aspect. Changing PHL makes little sense considering how competitive gates are at JFK. I think they need to keep all 4 hubs along the east coast as well as LGA as a focus city. Potentially give up PHX.