Editor’s note: Terri Grauer is a consultant and writer specializing in the application of network technologies to business challenges. Sanity Check is a regular weekly feature in
LTW.

_______________________________________________________________________________________A couple weeks ago Delta announced they were “slashing prices’ to compete with low-cost carriers like Southwest and Independence Air. Additionally Delta lowered ticket prices on fares out of Charlotte to compete directly with US Airways.

The catch is Delta’s flights are not direct out of Charlotte, they are routed through Atlanta or Cincinnati and the pricing is not all that great.

Here’s an example: Roundtrip airfare with 14 day advance purchase from Charlotte to Philadelphia on Delta $465 with connection in Cincinnati.

The same exact ticket from US Airways (including the stop in Cincinnati) is $475. On the other hand, the direct flight, offered only by US Airways, is a whopping $996 with the same purchasing criteria.

Loyal – to a Degree

As a seven plus year resident of Charlotte I have made use of the Charlotte Douglas International Airport and its signature airlines numerous times for business and pleasure. I know the ‘back way’ into the airport and where to park in Satellite parking so my car won’t get ‘dinged’.

I can recite my (US Airways) frequent flyer number from memory and I know where all the important facilities are in the terminal, like my favorite coffee shop and hamburger place. I know US Airways controls the majority of the gates at the airport (73 of 84 (36 leased and 37 common use)) and employs over 5000 people in the Charlotte area, making it the sixth largest employer.

What I don’t know (and don’t understand) is how I can book a direct flight from Raleigh NC to Philadelphia on US Airways for less than $100 roundtrip and the price from Charlotte is almost ten times that amount! For less than the cost of a barrel of crude oil (at $55 dollars a barrel), I can drive round-trip to Raleigh in a stretch limo and still not come close to the price difference of the ticket.

My last business trip would have cost over two thousand dollars out of Charlotte for two people from my company, but it was less than three hundred out of Raleigh including two hotel rooms for the night before the flight. *So, because of the shear hassle factor we booked the trip with Southwest instead of US Airways, since we had to drive to Raleigh anyway. We also made an appointment with one of our Raleigh customers and made the three hour drive a very productive strategy session. (*Note to US Airways executives.)

So what is the deal in Charlotte?

The deal is supply and demand. Charlotte is a business hub, a financial hub and therefore a major destination for executives, consultants and sales people across numerous industries.

US Airways has been able to command a premium price for airfares into and out of Charlotte because of their control of the gates at this airport and the number of direct flights to other major destinations like New York, Philadelphia and Chicago.

The “direct flight” time savings for most executives has been justified, but with the “cost cutting measures” in place, most executives are now forced to find cheaper routes and less expensive alternatives.

Do the Math

Let’s face it, if a three-hour “road trip strategy session” can cut the price of airfare ten times for the same trip, companies will play for the car, the room and the meals rather than the airfare. Multiply the price of the tickets by a couple of people and the savings are significant; like my recent example of two thousand versus three hundred dollars.

I mean really, do the US Airways executives think we can’t do math? Or do they believe we are too lazy to drive to other cities to get a better deal? Or maybe they think since Charlotte is the second largest banking center in the USA that everyone here has money to burn on plane tickets?

Well let me set the record straight – “I can add and subtract, I’ve been a licensed driver for twenty years and neither of the large banking institutions are playing for my plane tickets.”

In order to avoid bankruptcy at my company we are willing to drive, conduct meetings during the drive time and save hundreds of dollars on airfare at alternate airports with alternate carriers. That being said, I’m willing to give US Airways the benefit of the doubt, they’re just trying to ‘get what they can while they can’, with the whole world watching what they’re doing during their second bankruptcy.

However taking advantage of your Charlotte customer base is not going to win any “J.D. Powers” awards or any long term customer loyalty, which you will need to survive.

I have a radical idea for the executives at US Airways, become competitive in Charlotte, quick!

One cost saving step is to terminate the lease on the 36 leased gates at Charlotte Douglas Airport. Charlotte Airport Authority would then rent them to US Airways as needed under the “Common Use” plan. What’s so radical about this step? Instead of leasing gates for as long as 30 years at a stretch, installing your own networks, wiring your own telephone systems, setting up your proprietary terminals and ‘marking your territory’ all at a very hefty price, put the money in the bank.

When you need the gates, rent them. When you don’t need them you’re not stuck paying for them.

Common Use Model

Despite all my research efforts I could not determine the actual monetary value of a ‘leased gate’ at Charlotte Douglas airport, but I am certain any number when multiplied by 36 (gates) becomes a very substantial lease number.When done right, the common-use model could save money for both the airline and the airport.

US Airways could save the costs and hassles of managing their own networks in every city they serve, while the Charlotte Douglas airport becomes a full-service IT outsourcer, creating for itself an entirely new source of revenue.

By the way, this Common Use Airport Model has been very successful in Toronto Canada.Without the hefty financial burden of 36 leased gates, maybe US Airways would finally be able to lower the cost of a ticket out of Charlotte to a competitive rate with other locations like Raleigh or competitors like Southwest and Delta.

For now I am going to hang onto my US Airways frequent flyer card and hope the reorganization and cost cutting methods include some innovative-radical ideas as well.
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Terri Grauer is a consultant and writer specializing in the application of network technologies to business challenges. She can be reached via email at terrigrauer@hotmail.com