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American Threatens Hub Abandonment if Charlotte Fails to Award Tax Breaks


An American representative, speaking before legislative and business leaders, hinted that maintaining the carrier’s hub in Charlotte may prove untenable without substantial tax breaks.

According to a report from the Charlotte Observer, a lobbyist representing American Airlines warned Charlotte officials and business leaders that winning an exemption from state fuel taxes will top the airline’s political agenda in 2015.

“This is the No. 1 public policy priority for the airline this year,” said Tracy Montross, American’s North Carolina-based lobbyist.

Montross made the remarks at a breakfast attended by state and local officials near Charlotte Douglas International Airport (CLT). Montross stopped short of saying the airline would scale back its presence at its second busiest hub if its demands are not met, but told local leaders that if North Carolina State fuel tax exemptions are not made permanent, then CLT will have among the highest fuel taxes of any American hub, with only Chicago O’ Hare International Airport (ORD) and Los international Airport (LAX) having higher jet fuel costs.

“But [ORD and LAX] have the population to justify hubs in those states,” Montross added on a somewhat ominous note, adding: “Texas has no tax on jet fuel; that’s why they have three hubs.”

Under current state law, which is set to expire this year, airlines are refunded any fuel sales tax paid beyond a $2.5 million cap. American is pressuring lawmakers to replace the cap with an outright tax exemption on all jet fuel purchases.

[Photo: American Airlines]

Comments are Closed.
frankmazuca February 27, 2015

SD Search: The lobbyist did not state American has only three hubs, he stated that only ORD & LAX had higher costs than CLT and that those cities size justified additional fuel cost. He mentioned that Texas has three hubs in that state. Presumable the other hubs American Airlines has has LOWER fuel costs than CLT.

JDiver February 24, 2015

Where in the Charlotte Observer is any threat documented? Is a threat to actually leave CLT documented anywhere? I've not seen that other than here, and to me the headline feels somewhat specious, misleading and hyperbolic. Also interesting airline unions strongly oppose the emphasis on waiving fuel taxes. I expect better from FlyerTalk than the tabloids.

ccyao February 24, 2015

If they leave, will EK be allowed to fly there?

JBEagle1000G February 24, 2015

This is why we can't have nice things. Literally.

sdsearch February 24, 2015

This lobbyist does not know AA's hubs, in claiming they have only three hubs (ORD, LAX, and DFW). Pre-merger AA also has MIA and JFK! Has this lobbyist never heard of AA's "cornerstones"? Anyway, in the merger they're also getting some pre-merger US hubs, including CLT. But didn't the merger agreement with the governments (federal & state) require them to maintain all those hubs for a certain number of years? Are they really legally allowed to de-hub CLT next year??? (Yes, they can abandon a hub in the long term, certainly, but I didn't think they were allowed to do it this quickly.)