FAQ City: Why Do Flights Out of Charlotte Cost So Much?

Jan 14, 2020

When was the last time you booked a flight out of Charlotte Douglas International Airport? How much did you pay? It's great to have a busy airport, where you can get a direct flight to just about anywhere. But sometimes it can be tough on your pocketbook.

In fact, the average CLT airfare ranks second among the nation's top 50 airports. Charlotte looks a little better if you consider other costs — like the price of parking, luggage carts, or a cup of coffee, though it's still in the top 10.  Today, we take a look at why Charlotte Douglas International Airport is so expensive and get a few tips on saving money from experts who know all about airfares and airports.

Basil Badir
Credit David Boraks / WFAE

Our question this week was submitted by Basil Badir, a mechanical engineer who lives in Charlotte. He also wanted to know why 90% of flights from Charlotte are on American Airlines. He travels around the country, to Europe and to Egypt, where he was born.   

"My family and I, we travel frequently," he said. "We have to see family domestically and internationally. We like to also just take trips. And whenever we look for flights, we're always looking for the best deals, and it's usually not out of Charlotte. So, sometimes we have to drive to take a flight out of another airport, or connect through multiple airports to get better deals."   

So, yeah, it's true that Charlotte ranks No. 2 in the U.S. for airfares. The latest figures from the U.S. Bureau of Transportation Statistics show Charlotte airfares are more expensive than the rest of the top 50, behind only Dulles Airport outside Washington.

The average air fare at Dulles in mid-2019 was $462. At Charlotte, it was $425. Newark (New Jersey), Houston, Dallas, San Francisco and JFK (New York) all topped 400 bucks.  

And by the way, Las Vegas was the cheapest of the top 50, along with Orlando and Fort Lauderdale, Florida, and Oakland, California — all averaging under $300. (Just as an aside,Las Vegas subsidizes its costs with slot machines.)

Well, no slot machines here.  But why does  Charlotte cost so much? 

Scott Mayerowitz
Credit ThePointsGuy.com

The answer is pretty simple: We're basically a one-airline town. There's little competition for American Airlines, says Scott Mayerowitz , the executive news director thepointsguy.com, a website that tracks the cost of flying. 

"It is pure supply and demand. I mean, the airline industry is kind of crazy like this, and I've been covering the industry for more than a decade. And, uh, you know, I'll give you an example from New York, for instance. If I were fly to Tulsa, Oklahoma, and connect in Dallas, it might only be a $200 round-trip flight. But if I want to just get off that plane in Dallas and end the flight there, it might be $500," Mayerowitz said.

But that makes no sense.  

"Yeah, it's irrational because the airlines actually save on fuel and handling," he siad. "But the whole point is supply and demand, and they know what each market wants."

And what Charlotte wants, at Charlotte businesses, is the ability to book flights on short notice. 

"You've got the banking sector and a lot of last-minute executives flying around on expensive tickets," Mayerowitz said. "And American Airlines controls a lot of that nonstop travel. I see it, you know, out of New York. If I wanted to connect somewhere through Charlotte, it can be really cheap.

"But if I want to go nonstop to Charlotte, it really depends on the week. I can be paying a really cheap fare or I can be paying hundreds of dollars. And for the most part American gets to set the prices there because they control so much of the traffic." 

So, you're probably wondering, why does American control most of the flights here? It's because Charlotte Douglas International Airport is an American hub. The airline has 90% percent of the nearly 700 daily flights here. That lets it set whatever price it wants, says Ted Reed of Charlotte, who covers airlines for Forbes

Ted Reed, airline writer for Forbes.
Credit Forbes.com

"Well, I don't want to minimize the fact that this is a monopoly carrier … basically a monopoly company providing service," says Reed. "So of course, they're going to charge more. But a lot of people think the the trade-off is worth it and you know, and that's why you see the companies move here, a lot of companies move here because of the service."

"People always say to me: Fares are too high and the airlines are horrible. But yet the parking lot at the airport is always full. So people say things they don't mean," Reed adds.  

Reed also co-wrote the book "American Airlines, US Airways and the Creation of the World's Largest Airline." He says airlines use hubs — or hub-and-spoke systems — for efficiency.  Passenger traffic from around the region is consolidated at a hub, then passengers transfer for flights out to the spokes, mostly non-hub airports. Reed says some small airports around the Southeast only have flights to American's hub here or the Delta hub in Atlanta.   

So how did Charlotte come to be one of the nation's most important hub airports? Three reasons, says Reed.

"So the first thing is that Piedmont Airlines established a hub here in 1982," he said. "That was when all the hubs were being started in Atlanta, Dallas, not with a lot of flights, but, you know, the concept of making connections. And Piedmont, of course, started in Winston-Salem, which wasn't big enough, and they looked at Greensboro and Charlotte for to start a hub and they selected Charlotte. So that's the first thing."

The second thing, says Reed, has everything to do with the airport's longtime manager, Jerry Orr, who ran CLT until he lost his job in 2013 in a dispute over control of the airport. Orr kept the airport growing along with Charlotte and kept costs low. 

"Piedmont had become US Air and then US Airways, and they wanted to grow and this was a low-cost airport," Reed says. "And then we get to the third reason why this airport grew: because this is the Southeast. Atlanta is a major hub here. And there needed to be more hubs in the Southeast, and Charlotte is located geographically, it's not Atlanta, but it's in the Southeast."

American Airlines has 90 percent of the flights at Charlotte Douglas International Airport.
Credit David Boraks / WFAE

Right now, Charlotte Douglas airport is in the middle of a multi-year, multi-billion-dollar upgrade called "Destination CLT." How much are all of these improvements contributing to costs at the airport that might be affecting fares?

"Well, the airlines, principally American, absorb the cost over time," says Reed. "A lot of the cost of airport improvements typically come from the airlines (which) pay a price per passenger (called an "embarkation fee"). And also a lot of it's parking revenues. So, I'm not sure that contributes much to higher fares. They're absorbed by all the airlines, generally … and especially at Charlotte." 

"This is by far the cheapest hub airport in the United States. I think the cost per per passenger is between $1 and $2. It's the lowest of any major airport," Reed says. "At airports like Kennedy, that same cost per passenger is 30 bucks. But it's not really a big factor because the cost of using this airport per passenger for the airline is so ridiculously low." 

There is some good news about flying out of CLT. It turns out Charlotte drops a few notches in the rankings if you add other costs associated with visiting an airport, which are cheaper here.  A recent ranking by thepointsguy.com put Charlotte ninth among the top 50 for overall costs.  

"We looked at everything from a cup of coffee to how much it would cost to drive to a city center in a like Uber-Lyft situation," says Mayerowitz. "We looked at the cost of baggage cart rental and, of course, parking at the airport. So the good news: Charlotte actually comes out ahead in some categories like baggage cart rental.

"I think it's about $4.75 to rent a bag cart, if you're carrying a lot of luggage around. Parking at the airport is actually very affordable, especially compared to a city like Chicago or L.A. where it's like $40 a day. So Charlotte wins out in those areas. The problem is it's a hub city, where American Airlines controls a lot of the flights and because of that controls a lot of the cost for those who live in the area."

So, back to our question-asker this week, Basil Badir. He says with all the flying he's done, he's learned a few tricks along the way.  

"You can do some homework and probably get good prices, but it takes a lot longer, and sometimes you have to drive, sometimes you have to inconvenience yourself by, you know, flying to different destinations as well," Badir says.

Do you have a question about the Charlotte region you'd like us to look into? Send it our way! Submit your question in the box below, and we may be in touch.

_

Keep up with future episodes by subscribing to the podcast on Apple PodcastsNPR One, or Google Play.