by Michael Lowrey
To start daily nonstops from Los Angeles (this fall) and Chicago (fall 2014).
It’s hard to imagine a route announcement that more calls into question the conventional wisdom in this town than that the proposed US Airways/American Airlines merger will bring about an increase in international flights from CLT. Forget growth, this calls into serious question whether Charlotte’s two routes to South America will still be around in two years.
US Airways currently has a daily flight from Charlotte to Rio de Janeiro and begins Sao Paulo service in June. Demand to Brazil is highly concentrated — about half the market is from Miami, Orlando, and New York City — and making these flights work depends heavily upon connecting traffic. In other words, it’s a bit of a challenge in the best of times.
American Airlines is the dominate airline to South America in general and Brazil in particular, with existing flights to both Rio and Sao Paulo from Miami, Dallas, and New York City. Post merger, Charlotte is going to drop to at best the fourth priority for Brazil flights. Miami is the obvious issue that will get most of the attention, but those New York City and Dallas flights will have a significant impact too, as they cut the amount of feed into Charlotte’s Brazil flights.
But when you add Chicago to the mix, it takes it to a whole new level of difficulty. And that’s especially true as United already has a daily Chicago-Sao Paulo flight, which heightens Americans need to draw people from the Midwest to help fill its flight. That really doesn’t leave much of the country from which a Charlotte-Sao Paulo flight can draw.
The only reason that you make these route applications now is if it doesn’t matter how well the Charlotte-Sao Paulo flight does, that you’re going to keep it regardless or can it regardless. And it certainly implies LAX>CLT and ORD>CLT to Brazil for American.
Bonus concern: UA>AA in Chicago and the Midwest in general. To the degree that this signals that the combined American/US Airways intends to do something about that, be worried. The major markets in Ohio and Kentucky are closer to Chicago than Charlotte yet US Airways currently offers more seats to Charlotte than American does to Chicago. And that’s not true overall, it’s true for every market that both airlines serve in Kentucky and Ohio. If Chicago becomes a battleground as this application suggests, then it’s very easy to imagine a significant amount of capacity shifting from Charlotte to Chicago.