Page 2 of 3
And while the airline and its pilots recently renegotiated the number of regional jets it can fly from 70 jets to 140, both Castelveter and Orr say that US Airways needs to fly 300 to 500 jets of that size in order to compete successfully in this new, changing market.
"Our competitors are flying hundreds of regional jets and literally poaching off us," said Castelveter. "Because we have such a competitive disadvantage on the regional jet front, we can't compete effectively."
Although Castelveter says the airline hopes to eventually cut a deal with its pilots that will allow it to run at least 300 regional jets, he says that that's not likely to happen in the immediate future.
"There is nothing worse than watching the competitive atmosphere change drastically at a time when your checkbook is pretty low and you can't do anything about it," says aviation consultant Robert Mark. "US Airways is saying "Do we do what they are doing or do we let them go and see what happens?'"
What does it mean?What will likely happen, experts say, is that the smaller carriers will revolutionize the industry, or at least a significant part of the industry, with smaller fares and no-frills direct flights that business flyers now demand.
So what does it all mean for Charlotte's hub? National experts disagree on the answer to that question. Some predicted dire consequences for our hub. Others weren't so sure.
Airline consultant Morten Beyer of Morten Beyer & Agnew says the new changes in the industry will have more of an impact on Charlotte's hub than they will on Atlanta's.
"There is a certain amount of artificiality to the Charlotte hub," said Beyer. "Charlotte is not a dominating city in the way an Atlanta or Chicago or Denver is. In the Southeast there are other cities of roughly equivalent or greater status. US Airways has made it into a hub of greater significance than is warranted by Charlotte's economic status in the region."
Beyer predicts that the size of Charlotte's hub will eventually be brought more in line with what it should be in relation to its economy.
"I could see in the future if US Airways should be acquired by another carrier, its successor might not continue to build the Charlotte hub or would overfly it without going through Charlotte," says Beyer.
Others, like Alan Bender, an airline economist with Embry-Riddle Aeronautical University in Florida, say there will always be a need for a hub and spoke system like the one US Airways operates in Charlotte, but he thinks the hub system in this country, and particularly in Charlotte, is overbuilt.
"Hubs have been around forever," said Bender. "I believe the Charlotte hub will survive, I just don't know whether it will survive in the magnitude it was built up to."
George Mason University Public Policy Professor Kenneth Button agrees that the changing nature of competition in the industry will hit some of the hubs and bleed traffic from them, but he thinks its impact will be much greater upon the larger hubs than on the smaller ones like Charlotte's. In fact, he says, Charlotte's hub could benefit.
"The really big hubs are going to lose some traffic to medium-size hubs," said Button. "These can operate viably with a smaller number of passengers. It could be that some secondary carrier comes in and serves your banks. These cross-continental flights could help the medium-size airports."
Castelveter, the US Airways spokesman, says the company realizes it will have to compete effectively from the spokes in the hubs so it can fill planes to longer-haul destinations. He says the company has a three-point plan of attack. He says the airline is trying to form alliances with a larger network of other carriers to provide lower-cost service, to lower operating costs by over $1 billion a year, and to negotiate with its pilots and crews.
Orr, who has seen Charlotte's hub through thick and thin, acknowledges that point-to-point flights -- of which Charlotte's hub already has many -- are clearly the most efficient way to serve two destinations assuming there's a sufficient number of travelers in those markets to warrant service. But, he points out, Southwest Airlines only serves 58 cities, so it can pick the pairs of destinations it wants based on sufficient travel to fill its airplanes.
