747400sp From United States of America, joined Aug 2003, 3847 posts, RR: 2 Posted (4 years 10 months 3 weeks 6 days 22 hours ago) and read 9691 times:
Back around the 60's, Pan Am, TWA and AA was based in New York, but later in years, AA move their base to DFW, TWA move their base to STL and I believe Pan Am move their base to MIA. Why did these airlines leave New York? JFK was Pan Am and TWA bread and butter and AA still has a good bussiness flying back and fourth from California to JFK, so why would they want to leave New York?
EWRandMDW From United States of America, joined Jul 2006, 424 posts, RR: 0
Reply 1, posted (4 years 10 months 3 weeks 6 days 19 hours ago) and read 9577 times:
I think high NY taxes (personal and business) and unit costs for office space were part of the reason. Availability of land was another. Texas has no state income tax and plenty of land to develop infrastructure which surely helped AA decide their move. TW's move to STL was prompted to be next to their primary hub. PA and EA both moved to MIA probably for tax reasons and because Latin America was so important to their business. They could all make money in NY, but preferred to keep more of it by not having to spend as much in NY.
Why did FL move their HQ from ATL to MCO? Why did B6 threaten to move from NYC to MCO? It eventually boils down to $$. A prestige address will get you only so far.
rjpieces From , joined Dec 1969, posts, RR:
Reply 3, posted (4 years 10 months 3 weeks 6 days 16 hours ago) and read 9234 times:
Very interesting question. It was not just airlines leaving NYC--they were just part of a massive corporate exodus. NYC was in its low days in the mid-to-late 1970s--crime was out of control, the infrastructure was declining, strikes were common, the city was on the verge of bankruptcy (epitomized by the famous NY Daily News Headline: Ford to City, Drop Dead), etc. The city was in the middle of a transition away from being a manufacturing base (hence the abandoned piers on the West Side of Manhattan) which, naturally, had a giant affect on its economy.
"New York is distinctive for its high concentrations of advanced service sector firms in fields such as law, accountancy, banking and management consultancy.
The financial, insurance, health care, and real estate industries form the basis of New York's economy. The city is also the most important center for mass media, journalism and publishing in the United States, and is the preeminent arts center in the country. "
Many, many major companies are still headquartered there. The main difference, as I understand, from the 1960s and 1970s, is that there are many, many major companies headquartered in other American cities as well (Atlanta, Miami, Dallas, Houston, etc).
seabosdca From United States of America, joined Sep 2007, 6088 posts, RR: 6
Reply 4, posted (4 years 10 months 3 weeks 6 days 15 hours ago) and read 9034 times:
NY is an expensive city to run a business in for all of the reasons mentioned above, in roughly the following order of importance:
- high wages & labor costs
- high real estate costs
- lots of competition to locate there
- high taxes
Therefore the only reason a business should locate there is if it gets some financial advantage out of being there to recoup the costs. The businesses that get such an advantage are not country-wide manufacturing or service businesses; they're businesses in the areas that have expertise concentrated in New York, such as finance, international business, law, advertising, media, creative industries, and the like.
An airline, unlike a firm in any of those businesses, gets little or nothing out of paying more to locate in NYC.
To further distance the airline from its' days as Valujet after they bought out AirTran. The City of Atlanta has tried on several occasions to woo FL to move their HQ back to ATL, but MCO manages to sweeten the pot enough to keep them there.
At the time PA moved to MIA, they were trying to salvage the airline, as they were in bankruptcy. When they moved out of the Pan Am Building, they were using four floors of the building (At one point, they used fifteen floors in that building.). Getting out of NYC probably helped them survive a little bit longer, as even if DL had made the final $25 million payment for the PA assets they bought, that money would have only helped the airline survive another week or two at best unless someone came to their rescue.
FlyingSicilian From Italy, joined exactly 6 years ago today! , 1500 posts, RR: 0
Reply 6, posted (4 years 10 months 3 weeks 6 days 14 hours ago) and read 8979 times:
Quoting rjpieces (Reply 3): Many, many major companies are still headquartered there. The main difference, as I understand, from the 1960s and 1970s, is that there are many, many major companies headquartered in other American cities as well (Atlanta, Miami, Dallas, Houston, etc).
True NYC is still tops but the "sunbelt" is huge.
NYC has the most F500 HQs with Houston #2, Dallas #3, Atlanta and chicago 4 and 5.
“Without seeing Sicily it is impossible to understand Italy.Sicily is the key of everything.”-Goethe "Journey to Italy"
AADC10 From United States of America, joined Nov 2004, 2105 posts, RR: 0
Reply 7, posted (4 years 10 months 3 weeks 6 days 14 hours ago) and read 8932 times:
It used to be, back when Delta was a second tier player, that nearly all of the large airlines with the notable exception of United were headquartered within a few blocks of each other in midtown. This was no doubt to be near the capital markets to obtain the extensive financing that the airlines need to operate. When NYC declined to its nadir in the 1970s, the airlines moved their corporate headquarters to less expensive more livable cities, usually at their main hub.
With deregulation, moving out of New York cut costs and in the jet age, it was only corporate pride that necessitated a Manhattan headquarters.
Lufthansa411 From Germany, joined Jan 2008, 692 posts, RR: 1
Reply 8, posted (4 years 10 months 3 weeks 6 days 13 hours ago) and read 8810 times:
Quoting AADC10 (Reply 7): This was no doubt to be near the capital markets to obtain the extensive financing that the airlines need to operate. When NYC declined to its nadir in the 1970s, the airlines moved their corporate headquarters to less expensive more livable cities, usually at their main hub.
Quoting EWRandMDW (Reply 1): I think high NY taxes (personal and business) and unit costs for office space were part of the reason. Availability of land was another.
I think it is a combination of these factors. Before the 1960's NYC had high rent and taxes, but it was very much the centre of business in the USA. "The streets are paved with gold" comes to mind. Plus, most businesses want to base operations near a major customer base, and before the 60's that was for the most part NY. During the 70's though, the gold disappeared from the streets of NY, and financial decline set in. It is one thing to pay higher taxes while at the same time getting a prospering city in return. It is quite another to be paying relatively high taxes to a city that had lost its lustre. In my estimation, companies decided during that time that NYC had declined to the point where the name of the city no longer equalled prestige, and moved their headquarters to a cheaper place.
In short, during the 70's the "brand of NYC" was in a coma, and companies no longer wanted to pay to be associated with a dying brand, especially companies that had customers from all over the country.
Quoting gdg9 (Reply 2): New York's ridiculously high taxes.
My permanent US address is in NY. Most people I know from there groan at having to pay NY taxes, but also see the services they get compared to other states and are satisfied with them. If your profile is correct and you are not a NYS resident, I wouldn't expect you to understand that living in NY and visiting tax wise are two completely different things. The services you get as a resident far outweighs what most other states provide for ordinary residents, but they are certainly not free.
I wish members on this forum would stop tax-bashing without realising what is actually received.
Nothing in life is to be feared; it is only to be understood.
TeamAmerica From United States of America, joined Sep 2006, 1761 posts, RR: 23
Reply 12, posted (4 years 10 months 3 weeks 6 days 9 hours ago) and read 8404 times:
Quoting gdg9 (Reply 2): New York's ridiculously high taxes.
Not just the taxes - the cost of housing was also high. If an AA employee wanted a home to raise kids, he often had no choice but to live in New Jersey. That poor soul was then paying income taxes to the State of New Jersey, State of New York, and the City of New York. Absolutely brutal. Most of the workers who moved to Texas with AA realized a huge increase in their standard of living.
Quoting Lufthansa411 (Reply 8): I wish members on this forum would stop tax-bashing without realising what is actually received.
I'm with you Lufthansa411, but there are limits. People sometimes"vote with their feet". That's what AA did.
milesrich From United States of America, joined Jul 2003, 2030 posts, RR: 6
Reply 13, posted (4 years 10 months 3 weeks 6 days 9 hours ago) and read 8326 times:
All you xxxxxxx's and your "high taxes" are the reason for everything, other posters have put it in perspective. Not one airline left NYC because of high taxes. While taxes may have been an issue of lesser importance, the labor and rental costs of operating a general office in Manhattan just didn't make sense. The cost of living and commuting in NYC is so much higher than in the Mid Cities of the DFW area where American relocated. The other airlines that left their NY headquarters all ended up being liquidated in bankruptcy: TWA, Pan Am and Eastern. While NYC is the largest O&D market in the USA, there is no reason, except the proximity to Wall Street, to have a corporate headquarters there. Mid level managers and clerical people cannot usually no afford to live in Manhattan, necessitating long commutes, plus being in Manhattan requires salaries to be much higher than other cities. While United was based in Chicago for decades, only the three mentioned above were headquarted in NY. Northeast was Boston based until Storer Broadcasting, a Miami company, bought them. National was headquarted in Miami. Eastern, originally controlled by GM, moved their headquarters to Miami long before their downfall. Western was based in Los Angeles, as was Continental after relocating there from Denver, probably because of Bob Six and his Hollywood "love" connections, (he was married to Ethel Merman and then Audrey Meadows). Capital was based in Washington, DC. Northwest was always based in Minneapolis. Delta in Atlanta, prior to that, Monroe, LA. Chicago & Southern was Memphis based. Then there were the former regionals, none of which were based in NY. Southern at ATL; North Central at MSP, Ozark in STL, Allegheny at DCA, Lake Central at IND, Mohawk at UCA, and before that Ithaca, Central at GSW-ACF, Frontier at DEN, TTA/TI at HOU, Bonanza at PHX, Pacific at SFO, West Coast at BFI, Piedmont at INT, and PSA at SAN, and AirCal at Newport Beach, near SNA. (Did I get them all)?
commavia From United States of America, joined Apr 2005, 12225 posts, RR: 62
Reply 14, posted (4 years 10 months 3 weeks 6 days 8 hours ago) and read 8248 times:
Quoting jfklganyc (Reply 11): I watched a bunch of people in Dallas and the sunbelt tell me JetBlue would be happy in Orlando because NYC was so expensive and horrible.
Well, actually, I remember that thread well because I was one of these "bunch of people" and I don't personally recall ever saying that JetBlue moving was a done deal, but rather that economically, a move would certainly be logical - for all the reasons that are undeniable reality whether you like to except it or not (low costs, low taxes, etc.). New York did well on this one by structuring yet another deal to bribe a big employer to stay. We'll see how long those sorts of deals last with the fiscal situation in the City and the State of late.
Quoting jfklganyc (Reply 11): Don't like NYC follow the exodus out the door . . . just remember their are more people coming in then going out.
We've already been through this. New York City's population is growing - albeit at a slower rate than in the past - because of immigrants coming from other countries for whom New York, with its unsustainable social welfare programs, regressive and redistributionary taxes, crumbling infrastructure and astronomical livings costs, is a decided step-up from the origins from whence they came.
But for people who already live in New York, the picture is very different. New York City continues to be a net loser of domestic migrants, meaning people who already live in the United States moving somewhere else in those same 50 United States. By that measure, New York (the City, not the State) lost nearly 500,000 people between 2000-2008.
Those are the facts whether you want to accept them or not - you continuing to deny them doesn't make them any less true.
Quoting jfklganyc (Reply 11): Show me another city in the US that has gained 1 million people in 18 years.
I'll show you a metro area that's added 1 million people in the last decade, let alone the last 18 years. In fact, I'll name you four.
Since 2000, according to Census estimates, the metropolitan areas of Atlanta, Dallas-Fort Worth, Houston and Phoenix have all each added more than 1,000,000 new residents. Since all of those metro areas are considerably smaller than New York, in percentage terms, that's an even larger increase.
And that's what millions of other people are currently doing, which is why after this year it is widely expected that Texas will be gaining 3-4 new congressional districts, and a slew of other "Sunbelt" states will also be gaining at least 1, while New York State is projected to lose 1.
Quoting milesrich (Reply 13): Not one airline left NYC because of high taxes. While taxes may have been an issue of lesser importance, the labor and rental costs of operating a general office in Manhattan just didn't make sense.
And why do you suppose those labor and rental costs were so high? Could taxes perchance have a role to play?
dw9115 From United States of America, joined Dec 2005, 449 posts, RR: 2
Reply 15, posted (4 years 10 months 3 weeks 6 days 8 hours ago) and read 8028 times:
All of it just about came back to taxes in some way or another and its not just airlines Citi Bank moved all of their credit card operations to South Dakota in the early 80's because of taxes and re-incorporated it as a separate company within CitiGroup because of taxes.
jfk777 From United States of America, joined Aug 2006, 8698 posts, RR: 6
Reply 16, posted (4 years 10 months 3 weeks 6 days 7 hours ago) and read 7893 times:
Pan AM actually never left New York, it was based at its Grand Central skyscraper until the European routes were purchased by Delta and Transferred on 11/1/91. The South American Rump was to be based in Miami, that last part of Pan AM died on 12/6/91( could be a day off).
Eastern was based at Rockefeller center and moved to Miami in the 1960's.
TWA was only based in St. Louis post Icahn, it was on Third Ave and Icahn had it in Mt. Kisco( a suburb of NYC) for a time. ST. Louis was only in teh 1990's long after Icahn had done his damage.
AA did move out in 1979 to be close to its DFW center. This was to be the only airline to leave New York in the 1970's.
cf6ppe From United States of America, joined Mar 2006, 361 posts, RR: 0
Reply 18, posted (4 years 10 months 3 weeks 6 days 6 hours ago) and read 7305 times:
Quoting jfk777 (Reply 16): Eastern was based at Rockefeller center and moved to Miami in the 1960's.
IIRC, by the middle/late '70's. there were approx. 400 EAL personnel remaining in the NYC business location. Since about 90 percent+ of the EAL management and office folks were at the MIA headquarters, it was decided that it would be fruitful to move the rest to MIA hqs. I do remember having a pool of ex NYC folks to fill openings with....
In the above I'm not including those EAL folks based at JFK, EWR or LGA...
No disrespect to NYC or NY intended with above statement; I'm just trying to bring forward what I remember... (from 30-35 years ago)
caljn From United States of America, joined Oct 2007, 225 posts, RR: 0
Reply 20, posted (4 years 10 months 3 weeks 6 days 5 hours ago) and read 6692 times:
I live in Los Angeles in high tax California...and would not have a problem living in NY and paying their taxes.
Like someone said earlier, taxes may be higher but the benefits are worth it IMO.
People throughout the globe come to CA and NY and MA for that matter to be educated. Classic Democratic states offering true quality of life. (not defined as owning a mcmansion in some flat suburban sprawl.)
The most talented and ambitious people are drawn to these places enhancing quality of life overall.
Were do these sunbelt locations stand in the major demographic rankings?
Education, income, literacy, teen pregnancy, divorce. I'd rather pay a few add'l dollars in taxes, thanks.
joeman From United States of America, joined Apr 2005, 796 posts, RR: 0
Reply 23, posted (4 years 10 months 3 weeks 6 days 4 hours ago) and read 6385 times:
So in the never ending a.net tradition of "My place is better than yours", does NYC now qualify as an undoubtedly "sunbelt" people expression as a "rustbelt" city or is that only reserved for a few midwest cities that happened to have a few steel factories close up and are ignorantly touted as "ghost towns" by idiots promoting their self-perceived glory of the place their from?
Everywhere has had gains and losses and the "sunbelt" people have been quite successful in exaggerating their riches and the woes of the so called "rustbelt".
They've done a great job in pretending their local governments don't need tax money in one form or another(s) to function.
max999 From United States of America, joined Dec 2005, 1105 posts, RR: 0
Reply 24, posted (4 years 10 months 3 weeks 6 days 3 hours ago) and read 6080 times:
For all the crap that New York, its politics, its way of life, and its economy has taken in this thread...Let's take a closer look at the stats and we will see the 'sunbelt' economic miracle in some states is an illusion.
South Carolina 12.5%
North Carolina 11.2%
National Average 9.7%
I don't think low taxes are a panacea to help to bring jobs and businesses to these states...other things must be missing from this equation.
New York 8.8%
Quoting dw9115 (Reply 15): All of it just about came back to taxes in some way or another and its not just airlines Citi Bank moved all of their credit card operations to South Dakota in the early 80's because of taxes and re-incorporated it as a separate company within CitiGroup because of taxes.
False...Citibank moved there because of changes in South Dakota usury laws allowed the bank to charge a super high interest rate on their credit cards. New York's laws are more consumer friendly while South Dakota laws allowed banks to gouge customers. And banks are allowed to follow the usury laws depending on what state they are based in...so South Dakota became the natural choice.