ACA to go it alone!

[Ualexpress]

Good Luck!!!

I wish ACA and their employees good luck. As a former blueridger myself I know alot of people over there and I hope the best for everyone. Like Skeen said, I think it will be a very risky proposition. One thing ACA will need to do is greatly improve their on-time/completion factor. When I was there (I left in the summer of 2002) the performance of ACA was horrible and it looks like from the DOT stats as of late is hasn't improved too much. Also they will need to definetly add seats (as in a bigger aircraft) to lower their ASMs. You cannot compete with the likes of JetBlue (6.5 cents per ASM), AirTran (8.0 cents per ASM and getting lower with their new 737s coming on line next year), and SWA (?, but I am sure it is between Jetblue and AirTran). Flying around with an ASM of 15-18 cents per ASM will kill them eventually if they do not upgrade. That is the reason no one else has really tried a CRJ type low fare airline. Well I guess Midway kind of tried it, but look what happended to them. Oh yeah and Great Plains is also trying it but from what I understand they have one foot in the grave. Time will tell. Good Luck!

 

[firstthird]

Can someone explain how ACA can make a go of it if their CASM is 15-18 cents?

Atlantic Coast's costs were about 18 cents per available seat mile in the first quarter of this year. Skeen said that should drop to about 15 or 16 cents per available seat mile.

That seemed sort of high so I did a search and found an article putting most majors way under that.
http://www.courier-journal.com/business/news2003/03/04/biz-3-fare04-5705.html

Airlines want to increase RASM and decrease CASM. The majors envy the low-cost carriers' CASMs. ATA, for example, has a CASM of 6.83 cents, while United is at an industry high of 11.27 cents.
A low CASM cannot be explained simply by low wages. Southwest pays middle- to upper-end salaries to its pilots, flight attendants and mechanics. Yet its CASM is 7.41 cents, the lowest of the top eight carriers in the country

I'm just a pilot not a financial guru and I hope it all works out, but I'm just not sure that 15 beats 7.41 or even 11.27 when it comes to being able to compete.

Thoughts?

 

[House_X]

Yeaaaaaaaaaaaaaah Beeeeeoooooooooooootch!!!!

Just got the call from my buddies at ORD......
UAL can kiss my a$$!!!! Even if we fail, at least we went out standing on our own two feet instead of being someone's beootch. Can't wait to see how the stock will do today. I've been waiting for this announcement for a long time.

Cry fury!!! And unleash the dogs of ACA!!!!!

 

[Skull-One]

They may have a higher CASM, but they don't have to fill as many seats to break even. That's what Great Plains is doing. If those guys could get four more RJs they'd be making a profit. If CASM was all that mattered we wouldn't see any RJs around, but alas, we do. More and more every day.

 

[EOpilot]

I hope you shorted ACA, because if you're expecting ACA stock to skyrocket after this announcement, you'll be disappointed.

Good luck to all at ACA. I quit two weeks ago, so I'll be watching this one from the sidelines.

 

[exphojump]

The Washington post article mentioned a cost of 14 CASM(which may be a high estimate). For 2002 we had an average CASM of 15.5 with aircraft utilization of 9 or so hours 30 turboprops and 33 FRJs. The reason our CASM is high is because of UAL. The have slowly strangled us with aircraft utilization so that we show a high CASM.

On our own we could reach a utilization of 11 to 12 hours a day for a CRJ, get rid of J41s, add CRJ900s, and add a aircraft capable of handling higher loads and coast to coast ops, all of which lower CASM.

The range of a 717 is less than a CRJ. The model would be something like Airtran/Southwest. The CRJ seat is not that comfortable, but neither is a LUV seat.

Stage lengths of up to 1000nm. This would reach MIA, DFW, MCI, and eastern Canada.

Lets assume an average trip length of 1000nm.

1000nm x 50 seats x 0.14 is $7000.00 per trip

$7000.00/$150.00 is 47 seats to break even at 14 cents CASM

I think the 14 cent CASM is high. With an all CRJ fleet I believe 12 cents is more accurate, assuming the FRJ Delta connection ops are self contained. With larger aircraft and CRJ 900s we could lower it in a few years to the 8 to 10 cent range.

Ask yourself, would you pay $300.00 roundtrip to go from Shreveport, LA to Portland, ME or Jacksonville, FL to Milwaukee, WI?

ACAI would offer Southwest service and prices to markets not traditionally served by LCCs. This market has not been exploited yet. JBLU is attempting to, but will not get the EMBs on property till the end of 2005.

 

[I.P. Freley]

There sure are a lot of people on this thread going "hahahaha, take THAT UAL!" and/or "UAL has been screwing ACA long enough" etc., etc., etc.

Am I missing something? HOW has United been keeping ACA down? Didn't I just read in that news report what I'd already known/suspected, that the fixed-fee flying that ACA has been doing is what kept them profitable post-9/11?

Why all the animosity towards UAL? Is it just because they wanted a lower-cost deal with ACA?

 

[halfmoon]

So when is ACA supose to be 'on there own'? Do they have a specified date that they will be dropping United?
To me this sounds like another midway. An RJ fleet with a few 737's.

 

[House_X]

I.P. Freley,

Where have you been in the last 9 months?

 

[gramecracker]

They're just going to turn into another Midway if they can't keep their costs in check.