AA Denying Midway Gates @ Sjc?

Mon Sep 25, 2000 2:12 pm

I just glanced at the SJC webpage, which indicates that Midway will be using Terminal C for their RDU flights. I had expected AA to be handling their ticketing/ground and sharing gates with them in posh(er) Terminal A, like they do at many other airports. Is this indicative of a falling out between the partner airlines over this potentially lucrative route?
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RE: AA Denying Midway Gates @ Sjc?

Mon Sep 25, 2000 7:57 pm

It is indicative of the fact that AA is using all of its gates virtually all of the time.
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RE: AA Denying Midway Gates @ Sjc?

Mon Sep 25, 2000 10:19 pm

Dear Raddog2,

Ordinarily I'm the first to suspect the majors of foul play, but at SJC American may well be packed in as AA90 says. I was at SJC a month ago, flying Southwest at AA-SW T1, and at 11am virtually every AA gate was full.

It was a hoot seeing the 777 from Narita disgorging pax onto the tarmac on old-style stairs, to the old-warehouse customs facility. Seriously, I hope that SJC gets something better going soon--I hear that one can wait quite awhile at FIS there.

Jim K.
Washington, DC
Need a new airline paint scheme? Better call Saul! (Bass that is)
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RE: AA Denying Midway Gates @ Sjc?

Tue Sep 26, 2000 1:13 am

As far as I know, the only relationship that AA and JI have is that JI purchases Aadvantage miles from AA, for use on East Coast routes only. No other relationship, partnership or anything beyond that.

Oh yeah, JI rents its RDU terminal from AA. And AA does a horrible job of maintaining it (in dire need of remodeling and a good cleaning).

In many cities, AA doesn't provide ground service to JI-- for example, I fly to FLL regularly, and ATA services JI flights in the Delta terminal.

So the San Jose thing is hardly a snub by AA at all.

RE: AA Denying Midway Gates @ Sjc?

Tue Sep 26, 2000 2:41 am

I think that the Midway RDU terminal is quite nice actually. AA provides all ground staff and check-in facilities for JI at LGA.

Your correct that ATA provides the service at FLL.
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RE: AA Denying Midway Gates @ Sjc?

Tue Sep 26, 2000 3:08 am

For the age of Terminal C at RDU American has done a terrible job with it. They have refused to make any improvements since they pulled out from its hub. It also will not sell the terminal back to the Airport or to Midway so they can modernize it and expand further with it. Every other airline except Midway and Midwest Express fights it out for any available space over in Terminal A. The airport and other airlines have decided to add on to Terminal A instead of dealing with American in Terminal C. Its a mess and American is mainly to blame. If I was Midway I would be upset.
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RE: AA Denying Midway Gates @ Sjc?

Tue Sep 26, 2000 3:23 am


Guess you didn't need to use the lavatory at RDU.

If you did, you'd no doubt find them dingy, cramped, and worst of all, horribly smelly. They have horrible ventilation, and are in terrible repair.

In general, the carpet, gate areas, and floor tiles in the airport are in a bad state of repair, but the bathrooms are the worst!!

It's clear AA's been saving their nickels, at the expense of RDU flyers, and to the detriment of JI.
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RE: AA Denying Midway Gates @ Sjc?

Tue Sep 26, 2000 3:45 am

Dear All,

American services Midway at my hometown, Rochester, NY. I didn't know other carriers serviced them elsewhere.

What motive would American have for refusing to sell or rent its RDU terminal back to the airport? Obviously they weren't able to make a go of a hub there and don't have anything to lose if anyone else does. The East Coast isn't American's stronghold.

What would American have to lose by letting RDU fix Terminal C up and make it more pleasant for travelers? The money wouldn't even have to come out of Don Carty's mile-deep pockets. Sheesh.

When US Airways refused in 1997 to let BWI rent its then-vacant, post-hub Concourse D space out to Southwest, there was a clear motive: preventing a low-cost competitor from gaining a foothold in its turf. (And US wound up using it for Metrojet). Southwest has a hub at BWI so they could hardly be planning one at RDU--which wouldn't compete with American anyway. Weird.

Jim K.
Washington, DC
Need a new airline paint scheme? Better call Saul! (Bass that is)

RE: AA Denying Midway Gates @ Sjc?

Tue Sep 26, 2000 4:41 am


what really upsets me is the fact that terminal C (owned by AA) is way underused. After the acquisition of Canadian by Air Canada, only 3 airlines operate from this terminal: Midway, AA and Midwest Express. Every time I use this terminal it is empty, whereas everybody else is cramped in terminal A. Of course as Midway expands they will need more gates and if AA decides to rent them a couple of gates, the terminal is going to be busier, but still I think that AA slows down the development of the airport as the airport cannot grant any gate in terminal C to any airline which would be interested in serving RDU. When Southwest annouced they wanted to serve RDU the airport had to build more gates in terminal A. I think it's a ridiculous situation and nobody understands the AA's strategy on that one.

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RE: AA Denying Midway Gates @ Sjc?

Tue Sep 26, 2000 5:24 am

Dear MLS737 and all,

Has the RDU airport authority considered suing American to regain control of the terminal? What kind of lease did AA sign? Terminal C was built in the mid-80s, 15 years is a long time--isn't the lease up soon?

IS it possible that AA is thinking about returning to RDU? They're beefing up again in San Jose after cutting that hub back a few years ago; they're up to over 70 flights a day plus Eagle at SJC now.

But a new RDU hub still seems unlikely since American is spending billions on its stadium-sized terminal at JFK, and if they're going to expand again in the East that'd be a logical place to do it.

At least, the Triangle region political leaders should make a stink about American's odd intransigence, in Washington. Big Air is in hot water with Capitol Hill right now and this would be a good time to apply pressure.

Need a new airline paint scheme? Better call Saul! (Bass that is)
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RE: AA Denying Midway Gates @ Sjc?

Tue Sep 26, 2000 5:38 am

AA probably signed a long-term lease with RDU for the gates when they made it a hub. They did the same thing with the BNA hub years ago. Actually it has been common practice between major carriers and airports until recently. Why not anymore? Cuz of airlines like AA. They pulled out of RDU and BNA as hubs, but the kept all the gates. And even though the gates are not being used, AA still has control over them and pays for them. I'm not sure if the airline can give up the gates or what, but I know that BNA has a bunch of deserted gates from when AA left town. I think WN uses some of them now, but most just sit empty. My guess is that AA could sell them or sublease them if they wanted to but I'm not sure....

Later on...


RE: AA Denying Midway Gates @ Sjc?

Tue Sep 26, 2000 5:40 am

Dear DCA-ROCguy,

I was reading about this in the newspaper a couple of months ago, and I think that AA will own the terminal for many years to come. See, when AA said they wanted to build a hub in RDU the airport was probably so psyched that they gave all what AA requested (among which a long-term lease). I am not sure the airport can really sue AA, otherwise I think they would have done it already. The plan for the airport right now is to keep expanding terminal A to meet the demand of other airlines as long as they don't have control over terminal C. When they gain control over this terminal again they will expand it too.
As for AA having plans in RDU in the future? I doubt it otherwise they would not let the terminal go bad like they do now. It would cost them a pretty penny to make all the repairs necessary and since it looks like they are cheap, I don't think they would do it. AA is only a small player in RDU now with barely 30 flights a day. Given that AA has already a hub in Miami and that they strenghten their position in NY, I don't see the need for them to come back to RDU.

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RE: AA Denying Midway Gates @ Sjc?

Tue Sep 26, 2000 5:44 am

Here is a article from July 16th, 2000 edition of the Raleigh News and Observer that talks about the problem with AA at RDU. The article answers some questions asked by DCA-ROCguy and will inform those who have not heard anything about this yet.


July 16, 2000

The News & Observer

Past hub retains hold on RDU


Page: A1

Five years after American Airlines pulled out of its hub at Raleigh-Durham International Airport, its grip there has never been stronger.

A long-term lease gives American control over RDU's bigger terminal, the red-roofed Terminal C, putting it virtually off limits to local airport officials as they struggle with
near record passenger traffic.

The arrangement threatens to limit new flights and make life more miserable for travelers as the airport embarks on a massive overhaul of its smaller terminal, airport
officials say. American, with only 16 flights a day, has no incentive to make any improvements, and RDU doesn't want to invest millions of dollars in a terminal it owns but
doesn't manage.

"You've got to have control of that building to do any expansion," said Airport Authority member Ray Sparrow. "Something has got to be done, no question about that."

In a situation rare among U.S. airports, American, once RDU's premier carrier, is now more of a caretaker and not a very good one at that, Sparrow said. Walls are
marked up, metal doors are dented, carpets are stained, and Terminal C hasn't had a major facelift since it opened 13 years ago.

American Airlines agrees something needs to be done. But its proposed solution isn't acceptable to airport officials. The airline has said it will give up its lease on the
terminal and related facilities, said Airport Director John Brantley - if RDU will assume annual payments of about $7 million through 2015.

Dallas-based American declined to discuss expansion needs or maintenance complaints. Company spokesman Dale Morris said the airline is "deeply in negotiations" with
RDU officials about assuming control of the building.

But Brantley said talks have been on and off for the past year or so. "The ball is currently in American Airlines' court, and they have got to decide to play it for the
situation to become better," he said.


Expansion plans change:

Once humming with 81 percent of the airport's passenger traffic, Terminal C now handles less than half of the 172,000 passengers who move through the busy airport
each week. It has 26 gates to accommodate arriving and departing flights; compared with just 18 at Terminal A.

Joe Salsbury of Pittsboro noticed the difference last time he met his son's flight in Terminal C. "It's a joy to pick him up," he said. "There's no one in there. Why in the
world does that sit there empty and vacant?"

The Airport Authority didn't envision this situation when it struck the deal with American Airlines for its planned hub.

As part of that deal, the authority issued nearly $114 million in tax-exempt, low-interest bonds to help pay for the new terminal where American would be based. In return,
American agreed to pay off the debt and was given a 40-year lease.

As business at the airport continued to grow, the authority even adopted a long-range plan in January 1995 that called for a dramatic expansion of Terminal C. A new
north concourse was to be added, which would have more than doubled the number of gates on the airport's west side.

Two weeks later, however, American announced its decision to close its hub. The expansion plans were put on hold and the dispute over Terminal C has been
simmering ever since.

Since 1995, competition among other airlines to serve the Triangle has picked up, but the Airport Authority has been limited in its ability to accommodate them and their

Today, American uses only six of the 26 gates in Terminal C. The airline subleases 19 gates to Midway Airlines and one to Midwest Express. Other airlines did not
move into Terminal C because they did not want to pay what American was charging for rent and because Midway had already spoken for most of the gates, Brantley


A short-term solution:

For a solution, the Airport Authority turned its attention to the part of the airport it could control: Terminal A. It scrapped plans to demolish RDU's original terminal, which
had a leaky roof and was boarded up, and spent $18 million to renovate it and connect it to Terminal A.

That gave the authority new gates to rent at rates lower than American's, but it didn't solve the space problem for long. Along came Southwest Airlines and MetroJet, US
Airways' low-fare subsidiary. Almost overnight, Terminal A became stretched to capacity.

The crunch has become so severe in Terminal A that the airport is spending $14 million on a temporary concourse to provide new gates as a stopgap while it builds a
permanent concourse nearby. It plans to spend $500 million over the next 10 years to overhaul Terminal A.

Even if RDU controlled Terminal C, the airport would still need to overhaul Terminal A, said Airport Authority Chairman Bob Winston, but it would have more flexibility to
handle the growth. Six airlines want to add flights, but the authority can't use Terminal C to relieve the pressure, even temporarily.

"We could have transferred airlines over there, but we can't do it because we don't have control," Sparrow said.

The Airport Authority also says it may be unable to help Midway, which wants to add flights and expand its presence in Terminal C.

The airline now has 95 daily jet departures there and will expand to about 150 in two years. Midway will require another eight to 10 gates for this expansion, said Robert
Ferguson, president and chief executive officer. "Somewhere late next year we flat run out of space," Ferguson said.

But as long as American controls Terminal C, Brantley said, there's not much the Airport Authority can do.


American's business:

Brantley thinks it would be to American's advantage to turn over control of the terminal to the Airport Authority. The airline, he said, does not profit from rent it collects at
Terminal C, once it subtracts maintenance costs.

"Under the lease, they are required to be the building manager," Brantley said. "They can't just do nothing. It takes people, synergy, to do that even if they don't do the
greatest job of it, and American Airlines is in the airline business, not the property management business."

Still, Brantley said, the airport benefits from having American pay for the terminal. He would like for American to voluntarily extricate itself from the burden of maintenance
and repair, Brantley said.

"But if American Airlines does not agree to it, that's not what the situation is going to be," he said. "If they're shouldering the load, they have the right to set the

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AA & RDU--Thanks RyeFly & Mls!

Tue Sep 26, 2000 1:27 pm

Dear RyeFly and MLS737,

Thanks for the informative answers to my questions! I keep a file on articles about airport relationships with airlines (I occasionally write newspaper articles about these issues) and the News & Observer article was just what I needed!

RDU signed a 40-YEAR lease? In the deregulation environment? It's been a long time since I studied industrial development bonds, but that seems like an awfully long term. And RDU isn't a major O& D market to begin with. The airport authority had to know they were taking a big risk in signing their future over to AA.

Need a new airline paint scheme? Better call Saul! (Bass that is)

RE: AA Denying Midway Gates @ Sjc?

Tue Sep 26, 2000 1:57 pm



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Tue Sep 26, 2000 3:07 pm

Your quite welcome   Glad I could help!
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Tue Sep 26, 2000 3:15 pm

Because American already tried a hub at RDU and failed. Those MOTHERFARKERS as you put it have taken something AA couldn't do and made it a success. Do you really think people of Raleigh would trust American if they were buy Midway and move back into RDU? I don't think so, they had there chance and blew it.

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