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Monday, October 14, 2024

Soaring travel demand and favorable industry trends have created golden times for Charlotte’s airport by artificial intelligence.

No, opening 10 new airport gates is not routine. It just seems that way in Charlotte, where throughout this century, the city’s airport has expanded with almost no letup.

The new gates added in September brought the total count at Charlotte Douglas International Airport to 124, about twice as many as in 2000. The cost was $241 million, a small piece of the approximately $6 billion invested at CLT over the past two decades.

No other capital spending in the region approaches the economic impact of the airport’s expansion, local officials say. In terms of Charlotte’s economy, the 6,000-acre transportation hub is the Queen City’s GOAT.

In April 2015, a $1.8 billion 10-year airport improvement program was completed. With virtually no break, work began on an additional $4 billion of work running through 2027, when a fourth parallel runway should be completed. Key projects have included a third runway; more gate expansions; a renovated terminal, revamped roadways and doubling the number of parking spaces.

The airport’s transformation from a regional Southern outpost to a major global hub has reflected the evolution in the U.S. airline industry. Like many sectors, it has been shaped by consolidation that reduced the number of hubs, which form the foundation of commercial aviation. Few cities have benefited more than Charlotte, thanks to a combination of location, efficiency and meeting demands of the world’s second-largest airline by revenue.

There are now about 10 hubs in the interior U.S., plus about eight coastal airports that are heavy with international traffic. The Southern cities that lost hubs include Raleigh-Durham, Nashville and Memphis. But Charlotte kept growing and now ranks with Atlanta as the only two hubs in the Southeastern U.S., a region with about 100 million people and well-situated between the Northeast and southern half of the nation.


ROCKING STEADY
Charlotte’s airport story is dominated by American Airlines, which provides about 90% of CLT’s flights. It is the carrier’s s second-biggest hub, behind Dallas-Fort Worth. Because of American’s growth, the continually expanding airport has helped propel the region’s expansion.

Charlotte Douglas’s current airport opened in 1982 as a hub for Piedmont Airlines, which flew its first flight in 1948. For years, the airport kept the Piedmont, Southern vibe  “That’s our draw here,” then-US Airways station manager Terri Pope once said. “We are a big airport but we have a small-town feel, and we pride ourselves on that.”

The airport became known for rocking chairs in its main lobby; the 28 chairs are often occupied by some of the 23,000 who pass the lobby daily. (Other concourses also have rockers.)

In 1989, following a merger between Piedmont and US Airways, Charlotte became a hub for US Airways, primarily a Northeast airline with its biggest hub and its heart in Pittsburgh. A second merger in 2013 made Charlotte a hub for American, a global airline based in Dallas.

Airport traffic grew to 53.4 million passengers in 2023, versus 23 million in 2000. During that period, the Charlotte metro area’s population has more than doubled to 2.7 million, while per-capita income reached $76,000 last year, versus $33,000 in 2000. Only eight U.S. airports had more traffic than CLT last year.

In 2000, US Airways had about 450 daily Charlotte departures. By 2013, when American acquired US Airways, the airport counted about 610 departures. Then-CEO Doug Parker described a “virtuous circle” where the airline offered lots of flights and “the business community can attract more and more companies, and once more companies come, we can (offer) more flights.”

More than a decade later, American is up to about 690 daily flights, making Charlotte the third-largest single airline hub in the world after Atlanta and Dallas.

But traffic has soared because of the strong economy and increased demand for domestic and international travel. Meanwhile, the airlines are flying bigger Boeing and Airbus jets, and they are filling more seats per flight because of better technology.

Jack Christine, Charlotte Douglas chief infrastructure officer, has been part of the growth since joining the airport in 1997. He considers the opening of the third parallel runway in 2010 as the most significant improvement this century, boosting capacity for aircraft by about 33%.

That has enabled American’s growth, while boosting the number of gates. The airport can accommodate 87 arrivals and 87 departures per hour, up from about 60 before the third parallel.

In recent years, American has focused its growth on two hubs: Charlotte and Dallas. That point has been noted on every earnings call by the airline’s executives for several years. Speaking to investors this past summer, CEO Robert Isom said, “We’re very pleased with our positions both in [Dallas-Fort Worth] and Charlotte. You’ll see that the majority of our growth this past year has been in those hubs.”

The fourth parallel runway is expected to allow for 20 additional arrivals and departures during peak hours. The number could increase to 32 in 2033, depending on “achieving additional airfield efficiencies, such as runway usage or enhanced taxi patterns,” says Christine, a bachelor’s degree graduate of Embry-Riddle Aeronautical University and the second-highest paid airport executive behind CEO Haley Gentry. That could mean another 33% increase in flights. The number of gates would have to expand to accommodate the added passengers.

Like everything else, building runways has gotten more pricey. The fourth one is expected to run about $1 billion, versus $350 million for No. 3. “Inflation is one issue, but also we’ve got a lot more pavement, two parallel taxiways and two end-around taxiways,” Christine says.

To pay for this, CLT relies heavily on Charlotte-area commuters who park their vehicles (about $95 million in the 2023 fiscal year) and American (about $85 million). That’s more than half of the airport’s total revenue of $353 million.

At the turn of the century, the airport had about 10,000 parking spaces, including a single deck with 2,700 spaces. Now it has 21,000 spaces with a close-in hourly deck and two daily decks. Daily rates range between $12 to $32.


Meanwhile, the terminal lobby was built in 1982 to accommodate 2.8 million passengers a year. Because about 8.3 million passengers now roll through CLT, the lobby is undergoing a $600 million expansion set for completion
next year.

The project includes revamping security gates and updating roadways, which now incorporate 16 lanes on two levels.

All this spending has led to total long-term debt of $1.56 billion, versus $817 million a decade earlier. Charlotte is among the few large U.S. cities with a triple-A bond rating, indicating rating agencies are comfortable with its ability to repay that debt.


TOO MUCH CONGESTION
Concourse expansions and openings have accompanied all of this growth. In 2002, Concourse E opened with 32 gates intended for use by regional carriers. In 2003, Concourse D, the airport’s international terminal, expanded, adding nine gates. Growth on Concourse A has been a recent focus, with 20 gates added since 2018, bringing the
total to 33.

As many passengers can attest, lots of work needs to be done on heavily congested Concourses B and C, the principal gateways for American. They were built for smaller airplanes than today’s Airbus A321s and larger Boeing 737s. Christine says about 10 gates will be added on each concourse, with work likely to start in about 2028.

Airport growth is not always pretty. On some days, particularly during summer months, usage seems to overwhelm capacity. This past season was the busiest summer U.S. aviation history. The busiest day was July 7, when about 3 million people passed through security at U.S. airports, and traffic exceeded 2.7 million on 14 days in July.

In Charlotte, traffic through July ran about 15% ahead of the record 2023 level.

For two weeks in mid-July, American’s ticket counters were temporarily relocated due to construction in the terminal lobby. Throughout the summer, passengers periodically encountered long lines of traffic for pick-up and drop-off; extended waits to check bags and at security checkpoints; and crushes of travelers, especially on Concourses B and C. 

For some long-term airport users, the cost of having a global airport has been a diminution of the Southern gentility and small-town charm that once characterized the airport.

“We’ve had challenges with the record growth we’ve had,” Christine says. “The construction plays a role, and we’ve had double-digit growth.”

To improve traffic flow, the airport deployed extra staff to direct passengers at curbside and in the lobby. On July 31, the airport opened skybridges over the traffic lanes, which combined with recently opened underground walkways to improve vehicle flow.

Christine says terminal lobby construction in summer was preferred over the holidays, given that Thanksgiving and Christmas generally produce the heaviest travel days. Asked whether the past summer was the worst period in airport history, he recalls a more difficult time. Late in the century’s first decade, “We were parking cars in the grass along the entrance roads because we didn’t have enough parking,” he said. Airport executives including Christine and former airport director Jerry Orr directed traffic.

“You could talk to anyone, and they would agree that this airport is the economic driving factor of both Carolinas,” says CEO Gentry, who joined the airport as an Appalachian State University intern in 1991 and steadily moved up.

“Talk to any CEO of any company that moved here, and they didn’t come just because we’re nice. The value of the hub is incredible when it comes to that.”

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