DCI - 100, 50-Seaters and All Turboprops To Go.

[USCtrojan]

And yet Pinnacle always seems to go unscathed. No reductions, no 2 for 1 swaps. I wonder how they became the golden child on DCI so quickly?

ASA took the 2 for 1 swap because Inc. knew they could place those aircraft. Pinnacle won't do it unless they know they can place the aircraft. As of present, I'm betting they can't.

Trojan

 

[USCtrojan]

There has been no such comment except on these message boards. Delta, United, US Airways, American, and Continental have made ZERO public announcements regarding RAH's acquisitions, and what implications those acquisitions will have on future contracts.

What we have here is a case of believing a story only because it has been told so many times. Lots of people on FI are jumping up and down wishing for the end of RAH. And it would make sense that RAH could lose contracts down the road for competitive reasons. But everyone forgets that RAH has been taking money for years from competing airlines. American has paid RAH, who has in turn helped US Airways survive its financial woes for years. Delta has paid RAH, and in turn financed the acquisition of 70 seat aircraft for United. The single difference now is that RAH can set its own airfares on certain flights. Has this offended Delta? The truth is that Delta entered into a limited code-sharing agreement with Midwest, a direct-price-set-by-RAH competing airline. RAH has actually found some reward, not punishment from the major airlines. US AIrways will not pull any flying (nearly a quarter of RAH's total flying, pre-YX/F9) because of US Airway's need for cash, which RAH provides. Delta could choose not to renew the CHQ contract, but that is still years away, and there has been no word from Delta to indicate an early termintaion of that agreement.

The truth is that RAH meets the quality parameters of the major carriers they serve. I don't set those standards, so lets leave the lid on that can of worms. RAH performs well, and they do it at a cost that makes them attractive to the mainline carriers. You can say that RAH undercuts, and perhaps Bedford does, but I will agree that we are likely one of the least expensive DEPENDABLE regional lift providers. All I know is that whatever RAH gets paid, they are still able to pay the employees without concessions, and they are able to amass enough cash to purchase new aircraft and purchase other airlines, and still invest in side ventures. My point is that RAH has some wiggle room to keep the interest of the mainline carriers who contract with them, and RAH currently provides a reliable product to the contracting majors, and has not stopped meeting their needs.

Like him or not (I think the concensus is not), Bedford is good at GROWING his business. He does not take steps that would cause it to shrink. If the choice before him was either lose up to 2 dozen E170's and keep the profits coming, or keep 2 dozen planes and lose 85% of his revenue, I think it is pretty obvious what he would chose. If the flight intructors posing as regional captains on this board can see a potential pitfall, I am sure the CEO who has increased the size of his company ten fold while maintaining a profitable business can see it, too. Bedford keeps his job at the will of the Board of Directors. The Board of Directors reward well thought out business moves, not erratic decisions that endanger the entire revenue stream of that business.

ACA/Independence and ExpressJet entered into stand alone operations because they had to protect revenue. RAH was in no danger of losing significant revenue. THis was a willful decision that was well researched and well orchestrated. It may work or it may not, but the worst that will honestly happen is that RAH will have to sell off Frontier and Midwest. Frontier especially is a viable brand that has market interest, especially now that it is out of bankruptcy. Bedford would sell off these airlines before he gave up the meat and potatoes of the RAH revenue stream. Just think about it a little, guys.

RAH is a standalone competitor. Never were before. Never competed head to head for United or Delta or US Airways passengers. Now they are. However way you want to spin it, Major Partners are not happy about money coming out of their pocket to support Frontier or Midwest or whatever.

You may say RAH Holding is separate. However way you want to spin it, they money flows to the Holding Company. Perhaps Bedford knew what he was gonna do months ago and has specific cancellation triggers in the Connection contracts. Who knows. My guess you haven't heard anything from Mainline Partners because they don't want to damage their own Brand while advertising RAH's. That would be my thinking. I'm sure the legal departments are working overtime, however.

Trojan

 

[General Lee]

A friend in St Cloud, MN said Delta just announced no more MSP-STC service as of Dec 31st. Slowly those routes are going away, just like our old Montana mainline service from SLC. Trying to see my sister in BIL has gotten a lot tougher since the RJ explosion of the early 2000s. It's time for that to stop and reverse course.



Bye Bye---General Lee

 

[General Lee]

A friend told me that as of January 1 they will be 1300+ over staffed...maybe they will offer early outs for some.

That is becuase our schedule has been reduced for the past few months. Later in the Spring our schedule grows a lot (see recent announcement about new routes), and that number shrinks dramatically. If DL needed to furlough by now, they would have done it already. And, along with any furloughs comes the downgrades and other furloughs at Compass, along with 6 seats coming out of every 76 seater. A bad economy is not included in Force Mejuer.


Bye Bye---General Lee

 

[mynameisjim]

Do you suggest flying the 53nm between MSP and STC in a mainline airplane?

 

[Minimaniac]

RAH is a standalone competitor. Never were before. Never competed head to head for United or Delta or US Airways passengers. Now they are. However way you want to spin it, Major Partners are not happy about money coming out of their pocket to support Frontier or Midwest or whatever.

You may say RAH Holding is separate. However way you want to spin it, they money flows to the Holding Company. Perhaps Bedford knew what he was gonna do months ago and has specific cancellation triggers in the Connection contracts. Who knows. My guess you haven't heard anything from Mainline Partners because they don't want to damage their own Brand while advertising RAH's. That would be my thinking. I'm sure the legal departments are working overtime, however.

Trojan

I was not using the argument of separate certificates. I was showing that no instead of punitive action, RAH has actually seen some reward from mainline partners like Delta. Frontier does compete head to head with United in a number of markets. Frontier and Midwest have nearly no overlap with Delta, US Airways, Continental, or American. The expansion plans for MIdwest and Frontier do not directly compete with Delta, US Airways, Continental, or American. The networks served by Frontier and Midwest are limited, and really only rub against United. If anyone were to make a fuss, it would be United. UNited and RAH agreed to terminate the CHQ 50 seat contract well before the acquisitions were announced, so that collateral damage is gone. The real risky flying now is the UNited 70 seat flying. If United were to pull that years from now when the contract expires, RAH can just throw those planes into Frontier colors and bleed United in Denver. Do you think United would rather increase their competition in Denver, or keep reliable and inexpensive regional lift in Chicago and Dulles?

 

[General Lee]

Do you suggest flying the 53nm between MSP and STC in a mainline airplane?

No, but some routes are money losers, and need to be cut. That wasn't the case with the Montana stuff in Mainline equipment, since those flights were always full in the Summer, and we and NWA cornered the market. Then Fred Greed got in there and added RJs, and we haven't recovered yet. We are finally now getting rid of these 50 seaters that have brought this industry to it's knees. We need to continue. With this STC case, it seems even the Saabs can't make a profit sometimes. And, nobody else is going to challenge us on the 53nm route.


Bye Bye--General Lee

 

[79%N1]

Waaa Waaaa!!! It's all the fault of the RJ's and their wannabe pilots!!!!

Waaaaaaaaaa!!!!!!

 

[lookin4better]

Park em!

 

[DoinTime]

Then Fred Greed got in there and added RJs, and we haven't recovered yet.

Who is Fred Greed? Was he on the DAL MEC?