On the Runway to What? — Experts’ Reasons to Keep Hub Here: Location, Weather, Efficiency

The forces that made Memphis a superpower in cargo aviation will be the factors that preserve the passenger hub, experts say, ticking off a list of tangibles intrinsic to the success.

Location is one. Weather is another. And lack of congestion is the third.

In the 35 years it has taken Frederick W. Smith to build his Memphis-based global empire, the South has made its meteoric rise as the country’s newest manufacturing center.

The foreign investment in those plants, including a $400 million truck engine plant in Columbus., Miss., and millions of dollars more in a giant triangle from Montgomery, Ala., to Jackson, Miss., to Nashville is one of the biggest reasons Memphis will prevail in a war of the hubs, says Michael Boyd, principal aviation consultant at The Boyd Group in Evergreen, Colo.

“At this junction, all those worried about Memphis losing its hub should stop worrying,” Boyd said. “You’re too close to manufacturing in Mississippi to lose the hub.”

With oil hovering between $85 and $100 a barrel, local aviation experts say one of Memphis International’s greatest strength is its efficiency.

With three parallel runways, including the $75 million world runway, which opened in 2000, planes can land simultaneously here, exponentially important when it comes to reducing delays in the air.

On the ground, they say Memphis is more efficient than larger airports, including nearby Atlanta, because average taxi times are six minutes. The averages at Hartsfield-Jackson Atlanta hover at 26 minutes.

“That 20 minutes’ difference on hundreds of flights a day for companies burning very expensive jet fuel,” said Jim McGehee, former chairman of the Memphis-Shelby County Airport Authority. “The thought of forcing more Delta passengers through Atlanta is going to have a negative impact on customer satisfaction.”

If a merger between Northwest and Delta pits Delta’s hub at Cincinnati against Northwest’s hub here, McGehee says Memphis is the hands-down winner because it has the two-mile world runway.

“It can take anything that flies today; Cincinnati can’t say that,” McGehee said.

The most powerful indication of Memphis’ longevity as aviation power, says Arnold Perl, chairman of the Memphis-Shelby County Airport Authority, is the fact that the FAA broke ground last week on a new air traffic control tower.

“Would you make a $68 million investment of public monies and throw it down the drain at an airport where passenger service was going away?” Perl said. “The decision of the FAA to execute on its plan to build this control tower shows a confidence, at least among people in the know.

“The FAA has to be considered as people in the know about the future of Memphis International.”

Memphis is also one of two medium-size U.S. airports that charge passengers no fee to use the airport, as it has enough funding to cover its capital improvement plans.

“Memphis is unique because it gets a significant revenue from cargo,” said Debby McElroy at Airports Council International-North America. “If, God forbid, FedEx lifted its tents, it would be a different story.”

Passengers pay the fee, which can be as high as $4.50, but airlines are affected, “because they have less elasticity in raising ticket prices,” said Larry Cox, airport authority president and CEO.

“I’m very bullish today,” he said. “If Delta and Northwest merge, they have to consider everything. Atlanta’s 10 pounds in a five- pound sack. The cost of burning fuel when delayed in the air or taxing on the ground gives Memphis a lot of advantages.”

From a margin standpoint, Memphis is already more profitable than Northwest’s Detroit hub, said John Moore, former Northwest executive and current head of the Memphis Regional Chamber.

The proof of that efficiency, he said, is that Northwest recently invested in 76-seat regional jets to serve markets like Boston- Memphis.

“Think about this logically,” Moore said. “If things aren’t working so well in Memphis, why in the heck would you add more product? You take the product off the shelf if nobody is buying it, you don’t say ‘let’s put more in.’

“No one is really focusing on those facts,” Moore said.

No airlines in the merger talks are speaking, so the subject has generated “more gossip than the Iowa caucuses,” Boyd said.

Instead of a merger, he expects Delta and Northwest to deepen their existing alliance, saving the anguish of anti-trust approval, merging disparate work forces and closing hubs.

Memphis’ service to what Boyd calls the new “autocentric South,” could play a large role in the success of the alliance.

“Let’s just say Delta and Northwest are looking at becoming something bigger, not smaller,” he said. “If it works, it could turn the industry on its ear and be a whole new model in the United States.”

Reporter Amos Maki contributed to this report.

——————–

INSIDE

US Airways: 2005 merger a cautionary tale.

Coming Monday

Nashville hub closure turned out to be a good thing.

“All those worried about Memphis losing its hub should stop worrying. “

Michael Boyd

aviation consultant

——————–

Originally published by Jane Roberts / robertsj@commercialappeal.com / Reporter Amos Maki contributed to this report. .

(c) 2008 Commercial Appeal, The. Provided by ProQuest Information and Learning. All rights Reserved.