AirTran and Air Wisconsin Divorce

[FL717]

I heard that AirTran is ending the Air Wisconsin RJ agreement on August 9th.

Any supporting information out there regarding this?

 

[~~~^~~~]

Any chance that my dream of being ValuProp might come true? After all, if ASA is such an independent company, we should be able to fly for you and fill your 717's, right?

Better connections for your Pax too.

 

[General Lee]

Fins,

Can the Airtran guys get your rampers too? That will help our cause at Delta.....

Bye Bye--General Lee

 

[mad691]

heres the press release.

Press Release Source: AirTran Airways


AirTran Airways Returns to All Full-Size Boeing Jets with Business Class
Friday March 5, 4:44 pm ET


ORLANDO, Fla.--(BUSINESS WIRE)--March 5, 2004--AirTran Airways, a subsidiary of AirTran Holdings, Inc. (NYSE:AAI - News), today announced that the airline has reached an agreement with Air Wisconsin Airline Corporation (NASDAQ:AWAC - News) to end the regional jet service known as AirTran Airways JetConnect. The move to end JetConnect service comes after the airline performed an economic analysis and determined it could operate the Boeing 717 more efficiently than the Canadair regional jets in short-haul markets. Air Wisconsin Airline Corp. currently operates ten Canadair regional jets under the AirTran JetConnect brand and flies to 14 cities - five of them exclusively.
AirTran JetConnect service will begin phasing out of AirTran Airways' system in July 2004, with all JetConnect service ending by August 2004. Passenger demand in the JetConnect cities will be met with the airline's popular Boeing 717 jets - all of which have Business Class and extra large overhead storage bins. The airline operates the youngest all-Boeing fleet in the nation. In addition, the airline has 100 Boeing 737-700 aircraft on order with deliveries scheduled to begin this summer.

"AirTran Airways viewed AirTran JetConnect as a trial which included a pre-planned review period at the end of 2003. We launched the regional jet product after September 11th when short-haul traffic initially evaporated. Since that time, the combination of improved short-haul revenue and eleven consecutive quarterly reductions in our unit costs now permit us to better serve these routes with full-size jets. Every jet in our fleet will have a Business Class cabin and extra large overhead storage bins, and passengers will continue to enjoy the same low fares they have come to expect with AirTran Airways," said Joe Leonard, chairman and chief executive officer. "Air Wisconsin lived up to their operational and financial promises, and we appreciate the partnership with Air Wisconsin and wish them well in their new endeavors."

"Air Wisconsin has enjoyed the relationship with AirTran Airways. There are growth opportunities for Air Wisconsin with another airline partner, and we are looking forward to re-deploying these regional jets," said Pat Thompson, executive vice president of Air Wisconsin Airline Corp.

AirTran Airways is one of America's largest low-fare airlines - employing more than 5,600 professional Crew Members and operating 508 flights a day to 45 destinations. The airline's hub is at Hartsfield-Jackson Atlanta International Airport, the world's busiest airport by passenger volume, where it is the second largest carrier operating 188 flights per day. AirTran Airways, a subsidiary of AirTran Holdings (NYSE:AAI - News), is the world's largest operator of the Boeing 717 and has the youngest all-Boeing fleet of any airline. In 2004, the airline will begin taking delivery of new Boeing 737-700s. For reservations or more information, visit airtran.com (America Online Keyword: AirTran).

Editor's note: Statements regarding the Company's operational and financial success, business model, expectation about future success, improved operational performance and our ability to maintain or improve our low costs are forward-looking statements and are not historical facts. Instead, they are estimates or projections involving numerous risks or uncertainties, including but not limited to, consumer demand and acceptance of services offered by the Company, the Company's ability to maintain current cost levels, fare levels and actions by competitors, regulatory matters and general economic conditions. Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained from time to time in the Company's SEC filings, including but not limited to the Company's annual report on Form 10-K for the year ended December 31, 2002. The Company disclaims any obligation or duty to update or correct any of its forward-looking statements.



--------------------------------------------------------------------------------
Contact:
AirTran Airways, Orlando
Tad Hutcheson, 407-251-5578
[email protected]
or
Judy Graham-Weaver, 770-907-5054
[email protected]
or
Air Wisconsin Airline Corp.
Kelly Lanpheer, 920-749-7638
[email protected]



--------------------------------------------------------------------------------
Source: AirTran Airways

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[FDJ2]

The move to end JetConnect service comes after the airline performed an economic analysis and determined it could operate the Boeing 717 more efficiently than the Canadair regional jets in short-haul markets.

My guess is that DAL will soon come to the same conclusion with its RJs. The RJ glut is here and mainline carriers are beginning to reevaluate the economics of high CASM RJ list.

 

[General Lee]

FDJ2,

But wait, we just bought ASA 25 more, and Chataqua and Skywest get another 20 total between them too. What are our guys in management doing? They want us to take huge pay cuts, when at the same they buy 25 RJs that add to our long term debt. (But they are self-financing......Does that mean we get them for free????Nope) Ridiculous. We do need larger aircraft to compete with the lower fares the LCCs are putting out. Spread the costs out over a larger number of seats......I don't see Southwest or Jetblue with 50 seaters, and now Airtran is ditching them.......While we are getting more. Hmmmmm. I should have gotten a Wharton MBA.....

Bye Bye--General Lee

 

[FDJ2]

FDJ2,

But wait, we just bought ASA 25 more, and Chataqua and Skywest get another 20 total between them too. What are our guys in management doing?

General, my guess is that we will soon see a few more of the DAL brain trust quietly asked to find other more exciting challenges and move on. I believe that part of GG's "strategic review" will be a reassessment of the RJ and its tight economics. The RJ, with its high CASM, is just not an economical aircraft to feed crowded hubs in large numbers or compete head to head with aircraft like B717s, E170/190s, A319s, or other small mainline jets.

 

[General Lee]

FDJ2,

True dat.

Bye Bye--General Lee

 

[BuckO]

Wait til you DAL folk hear whats around the corner with the ACA 328 jets???

 

[General Lee]

BuckO,

Can you fill us in now? The anticipation is KILLING me--literally.

Bye Bye--General Lee

 

[FLB717]

GL,
You forgot to mention your furloughed pilots and the IFE of Song and your International routes,..

All kidding aside, I was VERY surprised to see AWA leaving.

 

[General Lee]

FLB717,

Sometimes I have to be very redundant to get it into their heads....


But, in reality, this might help us a little. If you do not replace AW, then you will have to put some of your 717s or 737 on the same routes, and that might delay some extra competition for us for awhile to other cities.....Thanks a bunch!

Bye Bye--General Lee

 

[Ty Webb]

I commute from a "JetConnect" city, so I read the relaease with mixed emotions.

The AWAC guys have been great. I end up in the cockpit most if the time, and they have a great bunch of guys. I hope this does not result in any reductions for their crews.

From a commuting/non-revving viewpoint, my guess is my city will go from 5 flights a day with 317 seats to 4 flights with 468 seats available, or worst case, 3 flights with a total of 351 seats available.

Either way, it will be more seats/less frequency. More likely to get to work, but more time in the Blue leather Barcoloungers in the pilot lounge.

 

[~~~^~~~]

General :

There are differences between Delta and Airtran.

(1) AirTran operates their 717 at a significant profit. Delta can not operate the airplane on mainline at a profit.

(2) Delta is a route carrier. AirTran is not. AirTran, Southwest and Jet Blue are limited to cherry picking point to point, but their model does not allow HPN to CDG.

There are also similarities in the way that DL and AAI uses RJ's. AirTran used the RJ's as "place holders" to create and preserve a market to be filled with 717's. This happens all the time and you should be thankful that RJ's are what keep your 757's making a marginal profit and what pulled your 737's out of the desert.

Gas is expensive and I agree that more RJ's might not be the best move for Delta, but right now, they are the only money makers on the property (aside from the ATR's which are the most profitable aircraft Delta operates by a huge margin - shame nobodly likes them).

~~~^~~~

 

[~~~^~~~]

Wait til you DAL folk hear whats around the corner with the ACA 328 jets???

Yep, the fuel burn of an E145, the speed of a E145 with the gear deferred down and pinned and the reliability of a beta version of Windows 95. Brought to Delta's bottom line at (contracted) way more than market prices as a result of scope in Contract 2000.

Conjecture at this point, but the contracts indicate this is the case.

 

[General Lee]

Fins,

Obviously some of our planes make money---especially the widebodies when full--and they are right now with Spring Break going in FLA and will be again the Summer--especially to ---you guessed it---Europe. But, there are other routes that we have to work on, and there are some planes that are put on the wrong routes---like MD-88s with no IFE to PHX from ATL. Yes, some routes on the RJ are good for Delta, and some are not. Look at the DFW base---I can think of many RJ routes that used to be mainline routes that should be AGAIN. DFW--SNA, ONT, DEN, PHX, MSY, ABQ, TUS, OAK, and DCA come to mind. There are others that were never really exploited by Delta that could prove fruitful by DCI--like DFW---ORD, DTW, and MSP. I think those are good uses of RJs--to develop the routes and hopefully mainline will take them over eventually. But the others are ridiculous---and all are large cities and should have more passengers than 100-150 a day. Marketing has to get their act together----advertise or something!!!

Also, you say that Airtran operates their 717 at a profit and we could not. Since it is a new airplane that would be put into our contract--it would have to be negotiated compared to other airlines operating them. I bet the rates would be lower than our current ones--and there isn't anything we could do about it. Put a 100 seater in there, and they would have to compare it to Jetblue's rates.... As far as any other rates for other employees---they can do anything they want with the stews--no contract there, and same with the mechanics.

I am very greatful that we had RJs during and after 9-11 to keep market share for us when passengers were limited, but now they are coming back--in droves. Yes, the fares are lower too---but that could be helped by actually negotiating with us--we could give them close to 20% tomorrow. The reality in all of this seems to be that LCCs are going to grow and use more mainline sized planes to compete with us--at lower fares. To compete effectively, we need to use mainline sized planes to spread out the costs, and we also need lower costs ourselves--and we hopefully will be working on that soon.

Bye Bye--General Lee

 

[FDJ2]

General :

There are differences between Delta and Airtran.

(1) AirTran operates their 717 at a significant profit. Delta can not operate the airplane on mainline at a profit.

Why not? They're much more economical on a seat mile basis than an ASA RJ 50 or 70.

 

[wms]

The move to end JetConnect service comes after the airline performed an economic analysis and determined it could operate the Boeing 717 more efficiently than the Canadair regional jets in short-haul markets.

Maybe they should just put the RJs on the long- haul routes like the rest of the industry. note: that was sarcasm.

General, my guess is that we will soon see a few more of the DAL brain trust quietly asked to find other more exciting challenges and move on. I believe that part of GG's "strategic review" will be a reassessment of the RJ and its tight economics. The RJ, with its high CASM, is just not an economical aircraft to feed crowded hubs in large numbers or compete head to head with aircraft like B717s, E170/190s, A319s, or other small mainline jets.

Except that in Q4-03 analysts said the bright star at DAL was DFW because of the high usage of RJs. It escapes me how using an airplane that costs more per seat-mile is more profitable. DAL obviously sees the benefit of the 100 seater with the recall of the 732s.

 

[~~~^~~~]

To answer the question why DAL can not make money with 717's, the answer is mainly infastructure. RJ's put 170 seats at a gate, and make rolling 40 minute turns. Crew costs are certainly another factor, with 100 seat 737 Captains making a quarter million a year....

Delta probably will buy some sort of 100 seat aircraft. Airtran's 717's made the company 10 to 15% more efficient than the DC-9 operation used to be. The 737-200 is a little more cost effective than the DC-9, but no doubt a savings could be realized with a more efficient airplane.

The E170 is significantly more efficient than the 717 (10 to 15%) due to the more modern wing design. Delta may go that route, but expect a battle since C2K scope language is going to be resolved in Court and the previous CY96 language had 100 seat jets operated at Connection carriers.

 

[CarjCapt]

The move to end JetConnect service comes after the airline performed an economic analysis and determined it could operate the Boeing 717 more efficiently than the Canadair regional jets in short-haul markets.

My guess is that DAL will soon come to the same conclusion with its RJs. The RJ glut is here and mainline carriers are beginning to reevaluate the economics of high CASM RJ list.

If the above is true, then why did CMR make 42 million the last quarter?