January 31, 2014

Higher parking fees coming to Charlotte airport

Get ready to pay more for parking at Charlotte Douglas International Airport. Rates are rising by almost 50 percent to pay for rising costs of construction, improved service and running the parking program, officials said.

Officials noted that Charlotte Douglas’ parking fees have for years been lower than many comparable airports, and that the increases will bring Charlotte closer to the average. But travelers, already paying more for airline tickets and fees, are likely to be unhappy with the higher costs.

“As we invest more in the facility and try to bring the level of service back into line with the standards we have, that all generates additional costs, and those costs need to be reflected in the rates,” said Interim Aviation Director Brent Cagle, who is empowered to set the parking rates at Charlotte Douglas.

Curbside valet rates will go up almost 50 percent under the airport’s proposal. Business valet rates are set to rise 40 percent, daily garage rates will go up 42 percent, and long-term parking rates will go up 40 percent.

The new curbside valet, business valet and daily garage rates take effect Feb. 17. The hourly rate hikes take effect when the new parking deck opens in November, and the long-term lot increases will roll out in February 2015.

Charlotte Douglas splits the profits from parking and concessions in the terminal with the airlines, lowering their costs. By federal law, the city isn’t allowed to spend the airport’s revenue on non-airport uses.

Cagle said the airport examined a sample of 11 similar airports to find average parking rates. Cagle said the airport decided to keep the long-term parking lot rates below the average of $9 a day to provide an economical option.

Rates are comparable at other airports Charlotte used for comparison: $6 a day at Raleigh Durham International, $7 a day at Kansas City International and $8 a day at Cincinnati/Northern Kentucky International.

“Our customers have options, and we’re happy to provide those,” said Cagle.

Keeping costs down at CLT

Charlotte Douglas has long had a reputation in the airport industry for keeping costs down, with among the lowest costs-per-passenger for the airlines of any major hub. That’s one reason US Airways and its predecessors built a major hub in Charlotte. Parking revenue has helped keep those costs down.

Experts say that’s especially important at an airport like Charlotte Douglas, where more than three quarters of passengers are connecting between flights rather than starting or ending their trips in Charlotte.

Edward Shelswell-White, a principal consultant with LexVolo, said airports face a challenge in trying to please both passengers, who want cheap parking, and airlines.

“Trying to keep both your core customers happy – that’s no mean trick,” he said.

The airport brought in $42.5 million worth of parking revenues in fiscal 2013, 18 percent of its total revenue, according to Charlotte’s annual financial report. That’s up from $38.5 million in 2012 and $37.1 million in 2011.

American Airlines, which merged with US Airways in December, is the airport’s biggest tenant, accounting for more than 90 percent of daily flights.

Under the terms of the airport’s lease with the airlines, the airlines get 40 percent of profits from parking and concessions.

In fiscal year 2013, Charlotte Douglas paid the airlines almost $18 million in such revenue-sharing, helping to offset their costs for flying from Charlotte Douglas. The majority of that went to US Airways.

“Any additional parking revenue we can generate will contribute to the airline profit share,” said Cagle.

Charlotte Douglas last raised parking rates in 2012. Daily, long-term and hourly parking rates each increased by $1, while business and curbside valet rates remained unchanged.

Officials said expenses have increased, one reason for needing the higher charges. Cagle said it was difficult to consistently staff the valet operation with the current rates, which have been in place since 2008, and the airport “struggled to maintain our high quality, given the demand.”

The number of local travelers has increased almost 17 percent since 2009, to 5.3 million last fiscal year.

Funding expansion

Charlotte Douglas is in the midst of a billion-dollar building boom. That growth spurt has led to a parking crunch since last year, when the airport tore down the hourly decks in front of the terminal and started building a new hourly deck in its place.

The airport has about 22,000 parking spaces, down from 26,000. The airport plans to have 28,000 spaces when the new deck opens.

The airport has two major parking expansion programs underway. The new hourly deck will have 4,000 public parking spaces and 3,000 parking spaces for a new rental car facility, replacing the current rental car lot. A second, 3,000-space business valet deck on Wilkinson Boulevard is set to open this summer.

Costs total $120 million for the new hourly deck, while the business valet deck is expected to cost $50 million. Both are funded with bonds, and Cagle said the increased parking rates are needed to help cover the bonds.

The airport is also replacing 20 shuttle buses, for a cost of $6.1 million. The parking charges will also help cover that, officials said.

The airport is also looking for a new contractor to staff and run its parking and valet services. Charlotte Douglas is soliciting bids from interested companies and expects to award the contract in the coming weeks. The winning company will be paid a management fee by Charlotte Douglas and will be reimbursed for expenses.

The only off-site parking operator at Charlotte Douglas is Park ’N Go, which operates a 1,850-space lot near Little Rock Road and Interstate 85. For $4.95 a day, the company offers parking and shuttle service to and from the airport terminal.

Owner John Bona said he just learned of the airport’s plan to raise parking rates and hadn’t considered whether Park ’N Go will also raise rates.

He said Charlotte Douglas still has cheaper parking than at many of the other airports where he operates. “I know they’re spending a lot to build those garages,” he said. “The truth is, the Charlotte airport had a very low rate.”

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