Delta and all pay RAH to compete

[FBN0223]

Anyone find it absurd that Delta soon will be paying RAH to operate Shuttle America only so that they can compete directly against Delta with Frontier? This obviously just one example as most the major airlines will do the same(paying RAH as RAH competes against them with Frontier).

Our lack of scope protections have come full circle to where it's now bad business.

 

[FlyinPiker]

I think...or am at least hoping there are still more cards to be played in regards to Delta + Republic.

While what you stated might be true for other carriers, I can't help but think there is a lot more to our relationship with them than is being seen from the surface.

 

[ACL65PILOT]

There is still a lot in play. More to come, some of it good some of it annoying.

 

[Noserider76]

I hope the annoying part doesn't deal with more RJ contracts to fly the new LGA stuff. I think I'll go postal.

 

[General Lee]

I hope the annoying part doesn't deal with more RJ contracts to fly the new LGA stuff. I think I'll go postal.

Some of that LGA stuff probably couldn't support a mainline plane, and it may be iffy with a CRJ too. Most of those cities had Dash-8s on them. The key is that those planes from those cities may connect in LGA more people flying down to FLA, and our current Md88 or A319s will be upgraded to larger planes. Those MD88s and smaller, like DC9s will hopefully go to ATL and compete again with Airtran 717s, that now compete and win against RJs.


Bye Bye--General Lee

 

[FlyinPiker]

I hope the annoying part doesn't deal with more RJ contracts to fly the new LGA stuff. I think I'll go postal.

I wouldn't think we'd sign up for more 50 seaters. We have enough of those as it is. But I think you might be on the right track.

Maybe an extension on their ERJ contract?

Everyone's desperate to find long term homes for their 50 seaters right now.

 

[SpauldingSmails]

Anyone find it absurd that Delta soon will be paying RAH to operate Shuttle America only so that they can compete directly against Delta with Frontier? This obviously just one example as most the major airlines will do the same(paying RAH as RAH competes against them with Frontier).

Our lack of scope protections have come full circle to where it's now bad business.

ACA - Independence Air anyone?

 

[Noserider76]

I hear you guys. We used to fly -9s, -88s, 727s to many of the cities now served by connection. I hope they take the opportunity to upguage some of those even at the cost of reduced frequency. I know where they can find some DC-9-30s. It's in our interest to see LGA operate efficiently if we're one of the largest carriers there. I know management looks at delays as a non-issue but, come on, that place is a mess.

 

[JoeMerchant]

There is still a lot in play. More to come, some of it good some of it annoying.

So am I going to like the "annoying" part?

 

[Minimaniac]

ACA - Independence Air anyone?

The conditions that led to the failure of Indy Air do not exist at RAH. RAH is not guaranteed success, but they are not following the same path that ACA did. Your comparison is too general, and incorrect.

Indy Air had its contract with UAL terminated during UAL's bankruptcy period over the inability of the two companies to agree on reimbursement rates. UAL wanted to cut those reimbursement rates by an unreasonable amount, and ACA said they could not work for such low rates. UAL said goodbye, and ACA was left with 85 CRJ's and some J41's that had no home in a very short time. The only option seemed to be to operate those planes independantly. By doing that, ACA voided its contract with Delta, and lost the revenue it was generating from the 30 or so Do-328 Jets. Those were sold/parked, as were the J41's. ACA branded itself Independance, and tried to start an airline with ZERO customer recognition or loyalty. It also began by operating as many as five round trips a day between cities and IAD. IAD does not have a lot of originating traffic, high landing fees, and no easy connection to Washington, DC by land. ACA also thought it could save money by not advertising initially on major internet websites like Expedia, et al. With no brand recognition, and no major distribution outlets, ACA could not fill seats on its overly ambitious fleet of 85 CRJs. Eventually the brand caught a loyal following, paid to dstribute on the national websites, and bought more economical Airbus types to operate on popular markets, but it just wasn't enough. There still was not alot of originating traffic out of IAD, and they just did not connect a diverse range of cities. They kept too many planes flying from day one, and did not cut back to meet demand. The rest is history.

RAH is currently in a position where it has not acted in a way that would endanger it's feeder contracts in the immediate future. There is a large amount of income from those operations, and those operations have not declined in a rapid, unmanagable way (15-20 planes per year vs. 100+ airplanes in six months). RAH has made concessions to its mainline partners in their times of need (reduced compensation from AA, removal of 15 smaller ERJs for Detla, Cash to US Airways), and still found a way to be profitable in the process. RAH "standalone" operations via Midwest and Frontier come ready with brand recognition, customer base, reservations staff, gate space, and established ticket distribution networks. Also, RAH has had some recent practice with expanding customer outreach in it's successful attempts to grow Mokulele. RAH has also successfully negotiated codeshare agreements for its stand alone carriers, helping to fill seats and spread the brand names to new customers. Alaska, United, Delta, Frontier, and Midwest have all signed some form of codeshare agreement in the past few months, and more are being pursued.

ACA/Indepedance was an attempt to go it alone following the rapid an relatively unexpected cancellation of their main revenue stream. They did not have the time to calculate an apporpriate entry into the marketplace, and did not have a way to estalish their name fast enough.

RAH has not lost any of it's current revenue stream. It has purchased one complete, turn key airline (F9), and another airline that brings customers and has staff, but has no airframes left at this time next year (YX). It also bought Mokulele, which was really nothing more than a name known to locals in very concentrated market. Mokulele brings potential (via codeshare with mainline carriers that don't want to invest in mulitple Hawaiian destinations), Frontier brings proven steady profit (an established airline with a functioning business model), and Midwest brings a platform from which to make a new airline from existing components and customers). RAH still has revenue diversity, and that diversity will not go away in the next few years. Six major airlines contract with RAH, and RAH will have three independant sources of revenue, one of which is currently profitable, another of which is expected to be profitable within a year. There really are no significant similarites between Indepedance and RAH, except for everyone else's desire to see them fail. But then again, none of us enjoy watching the success of others.