ACA to go it alone!

[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.

 

[Beechnut]

I have to say, this is the most fascinating thing to happen to the airlines in the past two years. I hope you guys do alright, but I also hope this means more growth for the other UAX guys out east. (Mesa excluded)

S.

 

[tittyjet]

Webcast at 10:00, eastern

WEBCAST ADVISORY: Atlantic Coast Airlines This Morning, Monday, July 28th, at 10:00am Eastern
July 28, 2003 05:06:00 AM ET


DULLES, Va., July 28 /PRNewswire/ -- As a follow-up to this morning's Atlantic Coast Airlines ACAI press release announcing the company's plan to begin a new operation as an independent low-fare carrier operating from Washington Dulles, the company will conduct a live webcast this morning (Monday, July 28, 2003) at 10:00am Eastern to discuss the details. You are invited to listen.

The webcast will be hosted by:
-- Kerry Skeen, Chairman and Chief Executive Officer
-- Richard Surratt, Executive Vice President and Chief Financial Officer
Instructions to hear the webcast:

The live webcast can be accessed directly through the ACA website at www.atlanticcoast.com (go to the "For Investors" section).

NOTE: Replays of the webcast will be available for five business days following the live event.



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[I.P. Freley]

Where have I been?

Not worrying particularly much about the relations between United and ACA, that's where.

Seems like a simple enough question if someone would be so kind as to answer it...

 

[exphojump]

UAL has abused us for a while. The amount of gate space they have given us in ORD is an insult. The employees have consistently treated us as unwanted partners and a threat. Pull up to PHL, LGA, JFK, EWR, CLE, DTW, CMH and see how badly the UAL ramp/ramps/csrs have treated us over the years or sit in the penalty box in ORD for 2+ years. The bad blood builds up.

Then after Chapter 11 they kill our CASM by under utilizing us.

The final slap was hiring Bain consulting. UAL held a gun to the pilots heads and demanded we take Mesa rates or disappear, except they used a third party to do it. None of our previous efforts were factored in, no loyalty.

Long Live ACAI!!!!

 

[I.P. Freley]

Okay, thanks for your reply exphojump.

As for the ORD gate space, wasn't that part of the country AWAC's playground? I was under the impression that the Chicago hub was primarily "theirs" and the IAD hub was primarily "yours".

 

[Humblepilot]

Re: United went too far!

Give em hell boys! I am sick too death of watching United use and abuse it feeders. United's pilots and managers screw themselves over with poor decision making and then want to slash prices with what is already the most underpaid positions in the industry (the regionals)! I would love to see United get burned big time on all the routes ACA will fly! If only the other regionals had said enough is enough (like ACA) United would have had to honor their current contracts because replacing all regional flying would have been too much for Mesa to accomplish overnight.

If I read this correct, ACA pilots will now no longer be taking pay cuts either since the proposed cuts were based soley on a renewed contract with United. I would call this (directly or indirectly) a victory for Regionals and Pilots in general. Someone needed to take a stand. I hope it works out for ACA. Good luck to you all!

Sedona,

First I will always support my former brothers at ACA but do you even understand how ACA got to the size it has? UNITED!!! Second of all while the mechanics and the pilots had positions on the board, what decisions did the pilots make you didn't like? I don't like the bottom feeding done my UAL management either, but if you were running a business and you were coming out of BK what would you do?

What made me die laughing is when you stated the pilots will no longer have a pay cut. You crack me up. Talk to some pilots who have been in the airline industry more than a few years. And if you know Kerry Skeen, you will know where the money is coming for the new and bigger airplanes. Out of the EMPLOYEES WALLETS!!!! Ask the older Blue Ridgers about the dangling of the RJs and the wage issues before the growth. And I am betting the salaries for the larger equipment will be well below scale in the industry.

I would love to see ACA be a success as long as the success is share with the employees. But knowing the history, I seriously doubt it.

Frats,
Humble

 

[Beechnut]

That's the old thinking I.P. Around 2000 that's how it was. ACA in the east, AWAC in Chicago and Denver and SkyWest on the west. Since then we've been bleeding into each other's biggest bases. SkyWest in Denver, AWAC in LAX (for awhile) and Dulles and ACA into Chicago. Then ACA outgrew AWAC around the time AWAC pilots were about to strike in Chicago. So.... the short of it is, NO ONE has rights to any one base other than the fact that ACA owns their own gates in Dulles.

S.

 

[I.P. Freley]

Well, "around 2000" is the last time I had talked to any ACA pilots in depth, so that was the basis of my assumptions.

I used to jumpseat back-and-forth from IAD to BTV on a regular basis in late 2000 and early 2001, often in the cockpit, and with one exception the crews were always pleasant and happy to help a brutha out going to and from the girlfriend's place. I wish all of you well and hope this new business plan works out for you. I was just trying to figure out where all the animosity was coming from.

 

[smellthejeta]

Okay, thanks for your reply exphojump.

As for the ORD gate space, wasn't that part of the country AWAC's playground? I was under the impression that the Chicago hub was primarily "theirs" and the IAD hub was primarily "yours".

No matter whose "turf" it is, when I was there awhile back, we were supporting 120 daily flights with 14 parking spaces. IAD, OTOH, has close to 44. Make no mistake, UNITED does the master scheduling.

 

[fracflyer]

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.

Looks like fuzzy math to me. Let's take a look. First, selling 47 out of 50 seats is a 94% load factor. No airline comes close to that. According to the SWA 10Q they've had an average load of 70.1% so far in 2003. Second, in order for ACA to "bring home" $300 on your theoretical round trip, you'd have to charge aprox. $400 for the ticket to account for the taxes and airport feee's. So, let's look at the numbers again based on these assumptions:

1. I'll assume you CASM stays at 15.5 and doesn't go up. (there are going to be significant costs associated with stand-alone marketing, a reservation system, new fleet type, etc.)

2. You'll get the same load factor as SWA 70.1% (Not going to be easy)

3. Taxes and Fee's, on average, increase ticket prices by 25%

Lets assume an average trip length of 1000nm.

1000nm x 50 seats x 0.155 is $7750.00 per trip


$7750.00/35 seats (70.1 load factor) = $221 each way or $442 round trip before taxes. That's $552 per pax just to break even.

Getting the CASM down is going to be key. Good luck!