Carl_Everett said:
General,
Could you please tell me where you are getting your information on Independece Air's revenue situation? They have not been flying for a full month yet, don't have the full route structure, and have not released any revenue information. Unless you have some inside information, I have to assume that you are pulling your ideas about large aircraft out of your arse.
Hey Carl,
Chill out. I think GL is referring to the following article from Aviation Daily. Sure, it's cursory research, but the article makes some good points.
Source: Aviation Daily)
A cursory, unscientific analysis of Independence Air's loads by one investment firm on the Newark-Washington Dulles route suggests the airline has to boost its passenger numbers significantly to reach its breakeven load factors.
Merrill Lynch analyst Michael Linenberg noted in a research report that Merrill employees recently spent a day at Newark to track development of the new service. Independence offers 16 daily flights with 50-seat CRJ-200s from 6:30 a.m. to 9:30 p.m.
The investment firm figured that load factors to Dulles averaged 26.5%, and loads inbound from Dulles ran about 38.5%. "Granted, one day of data does not a trend make," Linenberg said. "It is our estimation that Independence will need to achieve a load factor in excess of 70% to break even. We are nonetheless concerned that the planes are not even half full, given the time of year."
Linenberg allowed that it takes time to build a brand, but Independence's planned 300 departures also warrant significant investment. "We estimate ACAI [Independence Air] will be running its cash levels down by more than 50% over the next six to nine months," he said. Merrill has assigned a sell rating to the carrier's stock.
On the operations side, Independence canceled one flight the day Linenberg was observing the operations. Air traffic control caused delays of four flights. He noted the remaining 12 were on time, with some arriving several minutes early.
Independence started flights June 16, and its year-over-year traffic stats for June fell in every category. Revenue passenger miles were down 24.5%, load factor 1.6 percentage points and block hours 23.1%. "If loads remain depressed into the fall, Independence may have to consider scaling back the scope of its operation," Linenberg said.
Meanwhile, a Maryland-based travel risk management company filed a trademark infringement complaint against Independence for referring to its CRJs as "iJets." The travel company, iJET, filed the complaint in the U.S. District Court for the Eastern District of Virginia. "Litigation was the only recourse that we had to protect our brand from the media blitz being carried out by Independence Air and their very targeted use of our registered trademark," iJET said.
