ACA Its Airbus

[grinder]

Whaa.

I'm trying to understand what is going on here. No United pax and no Delta pax. The plan is that ACA will become an entirely new LCC based out of Dulles using RJ's to feed the new Airbus's? Is this correct? What routes are planned for the busses? Thanks.

 

[House_X]

Re: too bad

Too bad they chose the Airbus. Ask any mechanic who works on them and they will tell you they are junk, a throwaway plane. Boeing builds a much better product for the long term. This seems to be the attitude today in management, save a lot of money up front rather than look down the road.

If Boeing would get their head out of their a$$es and stop wasting profits on joint strike fighters that look like $#it, laying off workers and shutting down production lines, maybe they would be building RJ's, Jumbos and mid range aircraft that could compete with Airbus.

Airbus is a good airplane and now it's going to be even better with Independence Air painted on the side.

 

[AirBoard]

Re: Whaa.

I'm trying to understand what is going on here. No United pax and no Delta pax. The plan is that ACA will become an entirely new LCC based out of Dulles using RJ's to feed the new Airbus's? Is this correct? What routes are planned for the busses? Thanks.

You already seem to understand it. Except we plan to keep the Delta flying until it's scoped out. Routes are pretty much RJ's up and down the East coast (FL to MA). Airbus transcon.

www.flyi.com

 

[Boeingman]

How much feed did ACA give to UAL in Dulles? Reason being, that airline a while back Presidential failed because Dulle's O&D traffic couldn't support an operation on it's own without a mainline partner. And they were using ratty old 737's (i.e. el cheapo) for it.

This seems like an extrememly risky venture considering the capitol costs involved.

 

[46Driver]

The numbers I saw said that 60% of the traffic in Dulles flew in on ACA and connected to another ACA flight outbound. Another 20% were in and outs to Dulles on ACA. Thus only 20% of our flights fed mainline United.

 

[Boeingman]

The numbers I saw said that 60% of the traffic in Dulles flew in on ACA and connected to another ACA flight outbound. Another 20% were in and outs to Dulles on ACA. Thus only 20% of our flights fed mainline United.

20% of the traffic on your flights? Either way, it sure seems like a stretch to make the numbers work with a Airbus operation.

This seems like it is going to be a tough economic issue to overcome.

 

[exphojump]

Independence will offer.

1. Frequency with RJs on the east coast. On average hour flights out of IAD to destinations like BOS, JFK, EWR are customers on the west side of DC willing to pay a $30 - 50 premium to not have to drive around the beltway? The west side of DC is were all the money is, plus if you are going to drive all the way to BWI you might as well drive the rest of the way to New York. IMO the CRJs with no middle seats are more comfortable than a LUV 737 with the knee nocking seat pitch.

2. We will offer wholesale CRJ rates to customers in non LCC markets. Places that do not have the traffic levels to support a 100-150 seat LCC NB can now have an alternative to the 500 - 1000 fare of the major's express carriers.

3. Our Airbus will offer the same or lower costs than JBLU and LUV.

Customer A can buy a ticket from RDU IAD SEA and back spending 45 minutes on a CRJ and 5 hours on comfortable Airbus with inflight entertainment each way. The main competition would be a LUV 737 connecting through MDW or another minihub with cattle call boarding. The price would be about the same.

Customer B can buy a ticket from CAE IAD CMH and back without spending more than 1.0 hours on a CRJ at a time.

Customer C can buy a ticket from IAD JFK IAD leave in the morning conduct business in the city and return in the evening. With hourly flights and low fares it offers a great alternative to driving 6-8 hours each way. DCA? Have you tried to get there during rush hour from Ashburn, Reston, Leesburg, or Chantilly?

Customer D can buy a ticket from IAD to MIA, AUS, or DEN out of IAD for an average of 6 CASM + profit.

Northern VA and the Raliegh Durham area are not comparable. Midway did not have critical mass, enough cash, or low fares.

 

[General Lee]

How long will it take you to get all of the airbusses? Yes, you will get 4 from Ryan initially, but it will take awhile. In the mean time, do you think that the other airlines will not try to squeeze you? Of course they will. Fares will drop at IAD. Southwest and Airtran will do their best to win, and they have lots of money too.

Bye Bye--General Lee

 

[House_X]

How long will it take you to get all of the airbusses? Yes, you will get 4 from Ryan initially, but it will take awhile. In the mean time, do you think that the other airlines will not try to squeeze you? Of course they will. Fares will drop at IAD. Southwest and Airtran will do their best to win, and they have lots of money too.

Bye Bye--General Lee

AirTran, jetBlue and SWA can't compete us on the RJ's. I doubt SWA will fly a 737 into ROA, CHO or CAE and then go to IAD. You can't get cheap fares in various small cities. AirTran is too busy gunning for you guys (Delta). We didn't think of this thing ourselve, jetBlue has been thinking about this as well, that's why they ordered Embrears. Independence is going to be in this market before any other carrier.

 

[Sniper@YourFeet]

You can't get cheap fares in various small cities.

B/c there's not a large enough market to support them (ie, 1 million+ metropolitan area)

We didn't think of this thing ourselve, jetBlue has been thinking about this as well, that's why they ordered Embrears.

If B6 wanted to do what ACA plans on doing, they would have ordered ERJ's or CRJ's - but they didn't. They ordered EMB-170's (or was it 190's?). Not the same kind of aircraft at all - their's are 717 and 318 killers, yours are still just regional jets. No matter how you slice it, CASM's can only go so low on an RJ, and will never approach the lows achieved by WN.

Lucy looks awesome, House!

 

[46Driver]

B/c there's not a large enough market to support them (ie, 1 million+ metropolitan area)

Actually, that's changing now. Many of the small cities being held hostage by a single carrier are paying for a/any LCC to come into their town. It promotes business and growth for the city and eliminates risk for the carrier. My town did it with AirTran and business at the airport has picked up by 30% while the 3 surrounding airports have seen their usage drop by double digits. Having a LCC is very important to the chamber of commerce of a city.

 

[canyonblue]

IMO the CRJs with no middle seats are more comfortable than a LUV 737 with the knee nocking seat pitch.

The main competition would be a LUV 737 connecting through MDW or another minihub with cattle call boarding.

LUV 737 33" seat pitch, RJ? Please I flew the thing, don't try to compare.

Has ACA Streamlined the boarding process? I worked there and a cattle call always beats out a goat rope.

 

[exphojump]

Canyon,

The times I've been on LUV it has not been on the -700 but on the 200 or 300 with 32" seat pitch. The CRJ seats are a bit thinner and depending on the seat I have more knee room on the CRJ and the boarding is less chaotic.

As to the goat rope of the UAX operation. Do you think we have a chance in hell of surviving if we do that as independence air? Many parts of our operation are experiencing major changes, including boarding and ramp operations. We have hired several outside managers to shake up middle management. Provided we dodge the Mesa bullet I believe we will do well.

Have fun at LUV,

 

[AirBoard]

How long will it take you to get all of the airbusses? Yes, you will get 4 from Ryan initially, but it will take awhile. In the mean time, do you think that the other airlines will not try to squeeze you? Of course they will. Fares will drop at IAD. Southwest and Airtran will do their best to win, and they have lots of money too.

Bye Bye--General Lee

C'mon General, you're smarter than that. You should no that NO airline was born overnight - even the mighty Delta. Your strong prejudices against a sucessful Indy air is beginning to cloud your judgement.

Of course you leave yourself open to competition while you grow, but that's the chance you take. No airline was born out of a sure thing and many continue to exist on a hope and a prayer.

How many planes did jetblue start out with, gosh, how did they survive with so few aircraft in the beginning?

Ironically, Indy will be starting with over 80 ac. I think we'll be able to make our presence felt from day ONE, for better or for worse!

 

[canyonblue]

As to the goat rope of the UAX operation. Do you think we have a chance in hell of surviving if we do that as independence air? Many parts of our operation are experiencing major changes, including boarding and ramp operations

I hope it works because the pilot group there was awsome when I was there. You just have to get the other groups to play ball. The only way to get the ramp in shape is to let it be run by Lt. Dan, if he still works there. Good luck Guys

 

[DCitrus9]

AirBoard said "C'mon General, you're smarter than that. You should no that NO airline was born overnight"
You are exactly right, but unfortuneately ACA is trying to defy those statistics. Starting a new airline with 75 RJs, all operating on day one, will burn through that 300 million in about 3 months. Hopefully you'll get some pax on before the cash is gone, but I have my doubts. I don't think you'll be empty, but it takes time to build up enough momentum(passengers) to pay for those planes.

 

[Intruder One]

I think you guys are counting your chickens way before they hatch.............If you think J.O. is going to give up that easy your dreaming!

 

[KingAirKiddo]

I think you guys are counting your chickens way before they hatch.............If you think J.O. is going to give up that easy your dreaming!

And JO has over 4,000 highly pissed off super-motivated employees at ACA to deal with who want nothing to do with him or his second rate company. Johnny O. is way out of his league this time.

Show your support for ACA by visiting www.aero2003.org and becoming informed.

 

[AirBoard]

but unfortuneately ACA is trying to defy those statistics. Starting a new airline with 75 RJs, all operating on day one, will burn through that 300 million in about 3 months.

The General says we won't have enough planes to start an operation and you say we'll have too many.

Does anyone have any idea what the right number of aircraft is to start a LCC???

BTW, ACA will definitely burn through cash and post a projected loss for some quarters, but I don't believe they projected 300M. Who knows I don't feel like crunching the numbers. If the economy turns the corner the timing could be right.

 

[Andy]

And JO has over 4,000 highly pissed off super-motivated employees at ACA to deal with who want nothing to do with him or his second rate company. Johnny O. is way out of his league this time.

Show your support for ACA by visiting www.aero2003.org and becoming informed.

Problem is, it's the ACAI shareholders who decide whether or not to accept JO's offer. If I were a betting man, I'd be willing to bet that if less than 50% of current shareholders are in favor of JO's tender offer, JO will be buying up shares of ACAI. Does ACAI have a poison pill? What happens if JO buys >15% of ACAI stock?

 

[Andy]

ACA will definitely burn through cash and post a projected loss for some quarters, but I don't believe they projected 300M. Who knows I don't feel like crunching the numbers. If the economy turns the corner the timing could be right.

Problem is, UAL isn't going to sit back and let Independence Air operate with impugnity. Read a bit about how AMR took down Legend Air out of DAL (that's Dallas Love Field). Independence Air can expect the exact same fate.
In October, UAL was cash flow positive by $7 million/day. UAL could do a LOT of damage to Independence Air with an extra $7 mil/day burning a hole in their pockets. ... Independence, meet Ted. I'll wager that, should ACAI ever fly as Independence, Ted will put them out of business.

 

[KingAirKiddo]

Problem is, it's the ACAI shareholders who decide whether or not to accept JO's offer. If I were a betting man, I'd be willing to bet that if less than 50% of current shareholders are in favor of JO's tender offer, JO will be buying up shares of ACAI. Does ACAI have a poison pill? What happens if JO buys >15% of ACAI stock?

Let the deal go through....I guarantee you that airplanes will start flying very slowly, checklists will take a long time to run, airplanes will be flown in strict accordance with all MEL's and CDL's, Captains will start exercising extremely conservative discretion, etc.

Bottom line is that this deal is not good for ACAI, Mesa, OR UAL. This is a case of Jonathan Ornstein's ego run amuck and nothing more.

 

[w4mch]

Andy,

I'm not worried about Ted. If ted wants to fly busses to all the cities we go to in the CRJs, fine, let'em come. After renting out half the terminal to support 1 to 2 flights a day out of SYR or GSP, plus flying a bird that is way too big to support those markets they will wonder where that whopping $7M went. If they put UAX in those cities to compete with us it will be even better. They will have to pay the UAX carrier it's margin, find a place to park them at IAD and bleed even more.

As for the independence bus cities, if they want to price themselves to match us, fine again. All they will be doing is giving away seats and bleeding more red ink. UAL needs to figure out how to turn a profit AND pay back some of their debt.

I'm sure they will compete with us. We're banking on it. Competing with uniTED will be easy, and we would hope they stay around long enough to keep anyone else from growing at IAD.

 

[Marko Ramius]

Let the deal go through....I guarantee you that airplanes will start flying very slowly, checklists will take a long time to run, airplanes will be flown in strict accordance with all MEL's and CDL's, Captains will start exercising extremely conservative discretion, etc.

Bottom line is that this deal is not good for ACAI, Mesa, OR UAL. This is a case of Jonathan Ornstein's ego run amuck and nothing more.

Do you think JO cares one bit? No website, fist shaking, or sabre-rattling threats by his would be employees is going to make him stop his attempts to buy you. Plus I'll do you one better, if it does go down the majority of employees will do their jobs largely the same over the long run. A cursory glance of merger/acquisition history over time will tell you that.

 

[w4mch]

Marco,
You may be right about our www.aero2003.org site affecting JO, but forcing a full seniority intergration and bump & flush bid will make him bleed some.

Having to wait for the court case to slowly come up on the federal docket and face sherman & clayton act charges will put a stick in his spokes as well.

Does UAL really want to this dingy tied to them while they are trying to get an ATSB loan? Oops, they are named in the suit as well! Imagine that...

Waiting for the next act to start, the popcorn is just about ready and the beer is cold...

 

[RJPilott]

God i love being part of the largest carrier in the Washington DC area.... especially when we are about to offer low fares...

 

[AirBoard]

Problem is, it's the ACAI shareholders who decide whether or not to accept JO's offer. If I were a betting man, I'd be willing to bet that if less than 50% of current shareholders are in favor of JO's tender offer, JO will be buying up shares of ACAI. Does ACAI have a poison pill? What happens if JO buys >15% of ACAI stock?

Andy,

It's not that easy. If JO could go out and buy stock in ACAI now to solidify his chance of a hostile takeover this thing would be over. Unfortunately, when the takeover was announced a set date for shareholders of record was announced of Oct 23. Meaning, if you owned shares on that date you get to vote for ACA's future. Now JO could have ammased some shares prior to the record but not enoughto make a diffrence. He needs to get to the institutional investors.

BTW, your comment about how UAL can use it's positive cash flow to essentially crush INDY AIR reminds me what AA's Pres said recently. Word to the wise.....'you can't fix a 700 plane operation by changing the way you fly 40 planes' Ouch, that makes sense.

As far as a poison pill, I believe in this case it's called shark repellant and it is a commitmment to purchase 25 Airbusses. Deal worth over $1B. And I'm sure our company structured it so our tidy little cash reserve will be gone should JO get his grubby hands on us. Sorry JO.

 

[AirBoard]

Do you think JO cares one bit? No website, fist shaking, or sabre-rattling threats by his would be employees is going to make him stop his attempts to buy you. Plus I'll do you one better, if it does go down the majority of employees will do their jobs largely the same over the long run. A cursory glance of merger/acquisition history over time will tell you that.

I'd rather fight than give in to this pilot morale basher, wouldn't you?!?!