A dispute between US Airways and Charlotte’s former city manager over choosing the next airport director – and how much influence the airline would have – apparently fueled the fight for control of the airport.
“I never thought it would take the form it has taken,” says former city manager Curt Walton. “But I knew there would be a power struggle.”
The dispute in early 2012 has mushroomed into a drama that could cost the city its most prized asset. Behind the scenes, a former City Council member – backed by a small group of influential businessmen – has emerged as an unlikely broker in the effort.
It was former Republican councilman Stan Campbell who first approached state Sen. Bob Rucho about the airport. Rucho introduced a bill in mid-February that would create a regional, 13-member board to oversee Charlotte Douglas International Airport.
Last week Campbell gave Rucho information that helped persuade the N.C. Senate to pass the bill. Now the measure goes to the N.C. House.
“Every major airport in the state of North Carolina is an authority,” says Campbell, 62, a former chairman of the city’s Airport Advisory Committee who is now a retired businessman. “People act like this just fell off the turnip truck.”
Supporters say an authority would ensure the continued success of the world’s sixth busiest airport and not only protect it from city politics but from interference that could make it less competitive by raising costs.
Critics say the city has managed the airport as it has grown and prospered for nearly 80 years. If it isn’t broken, they say, don’t fix it.
The move comes as US Airways and American Airlines are preparing a merger that could determine the future of Charlotte’s status as a hub, as well as the money, jobs and travel benefits that come with it. It also comes as work continues on a so-called intermodal facility that will make the airport an even bigger economic hub for the Southeast.
Controversy over Orr
Under Jerry Orr, Charlotte’s aviation director since 1989, the airport has grown and prospered. It now has 700 flights a day and serves 41 million passengers a year.
One reason for Charlotte’s success is its distinction as one of the nation’s lowest-cost airports. Its “cost per enplanement,” an industry measure of the cost to put a person on a plane, is less than $1. The median for hubs is nearly $10.
Low costs keep airlines’ fees low. In Charlotte the main beneficiary is US Airways, which operates 90 percent of daily flights.
For years, the 72-year-old Orr ran the airport with virtual autonomy.
“He’s one of a kind and we treated him as such, because he got such positive results,” says former council member Edwin Peacock, a Republican.
But Orr often chafed at city management.
Last month the Observer reported that the conflict came to a head in 2010. Documents outlined an Internal Revenue Service audit and a later city report that found the airport violated federal tax law in the allocation of millions in bond money to pay for airport improvements.
In April, 2011, the city placed tight controls on airport finances.
“I was in favor of firing him,” says Republican council member Andy Dulin. “There was always a reason we couldn’t let him go. So here we are in a place nobody’s comfortable.”
Dulin, a council member since 2005, says Orr “has never been very receptive to answering questions about what he’s been up to.”
Orr could not be reached for this story. Earlier, he declined to discuss his relationship with city officials.
But according to Campbell, it was the prospect of Orr’s continued service and eventual retirement that led to the move for an authority.
A tense meeting
As US Airways’ Charlotte-based managing director of government and community relations, Chuck Allen often met with city officials. It was at a meeting early last year involving Allen, a colleague, and then-city manager Curt Walton where the issue of airport management flared.
What exactly happened is unclear. Allen declines to discuss it.
According to Walton, it was the third meeting over six weeks about choosing Orr’s successor.
But Campbell says Allen told him he went in to lobby for Orr and to warn that rumored additions of city employees at the airport would add to the airline’s costs. He said the conversation also involved the selection of Orr’s eventual successor.
“(Allen) said he went in and gave them sort of the party line, that US Airways was (in Charlotte) in a big way and we’d like you to keep (Orr) on at least until the merger is finalized,” Campbell says.
“And he said they basically said, ‘Thanks for sharing, don’t let the door hit you on the way out. That’s not your business, that’s our business.’”
Walton, who retired in December, said the meeting involved the process for replacing Orr.
“What I told them was that they were a major stakeholder and would be heavily involved in the process,” Walton said. “But ultimately, I was in control of the process. We differed on whose decision the choice of the next aviation director would be.”
Campbell says it was Michael Gallis, a Charlotte urban planner and transportation consultant, who raised concerns to him about the airport’s future management.
Gallis, who has consulted for Charlotte Douglas and other airports around the country, says while he’s seen many airport directors, few are as good as Orr. “Nobody was anywhere close to Jerry.”
“I heard there were contentious discussions,” Gallis says. “I was more concerned with, if Jerry’s going to leave, who’s going to come in?”
Gallis recalls raising the issue of airport governance with Campbell.
“I said it’s probably worth taking a look at how it’s governed and who would govern (it) best,” he says.
The role of US Airways
Last summer, says Campbell, Allen called his attention to House Bill 552. The measure, passed in June, transferred control of Asheville’s airport to a new authority. It would eventually serve as a template for the Charlotte bill.
The following months saw increasing friction between the airport and the city.
Last fall, citing security concerns, the city broached the idea of taking control of the airport police. It made the move in December. In one email, Orr described the switch as a “debacle.”
By that time, Campbell had begun talking with his friend Bob Rucho about the airport. Rucho acknowledges that it was a conversation with Campbell that led him to introduce his bill.
When Rucho’s bill passed its first Senate panel in Raleigh last month, Allen was one of the first people Rucho huddled with as he left the committee room.
Allen has said he has no opinion about an authority. That’s US Airway’s official position too.
“Our position on this is neutral, neutral, neutral,” says airline spokeswoman Michelle Mohr.
“We feel strongly that the model for success that has built (Charlotte Douglas) into the powerhouse it is today should continue under whichever form of ownership is chosen,” she says.
Businessmen weigh in
Campbell directs the Alliance for a Better Charlotte, a group formed during a time of civic tension in 1997 as a voice of moderate business leaders. The group has been largely dormant ever since. At its annual holiday luncheon, it fills just a single table at The Palm, a restaurant whose walls include the caricatures of at least one of its members, developer Johnny Harris.
Last week the Alliance arranged for and, Campbell says, will pay for a report from a Louisiana-based bond counsel on the fate of over $800 million in airport debt. The counsel’s memo helped bill supporters argue that an authority would have no adverse effect on bondholders.
The group is a nonprofit registered with the N.C. Secretary of State’s Office, but no recent spending reports are available.
Alliance member Ed McMahan, an informal adviser to Gov. Pat McCrory, has said he and others have grown increasingly wary of what they see as efforts by the city to exercise more control over the airport.
And Harris, a former member of the Airport Advisory Committee, told a Charlotte business group last spring that he worried about the City Council trying to exert more direct control over it. It would be bad, he said, if the airport became a political football.
Last month GOP Rep. Bill Brawley of Matthews, the House sponsor of the authority bill, alluded to such concerns.
“Charlotte has done a good job of managing an economic engine that drives prosperity for the (region),” he said. “But many business leaders are concerned that Charlotte is about to stop managing the airport wisely, which would harm the whole region.”
Staff writers Steve Harrison and Ely Portillo and researcher Marion Paynter contributed.