Delta and all pay RAH to compete

[wms]

BB needs the cash flow from the regional ops to support Midwest and Frontier. If he loses DAL and United the rest of the operation won't survive. IMHO

 

[quinnlake]

'Non-compete"

Do none of the airlines the Republic serve have a 'non-compete" clause? If not, how is that possible?

 

[ACL65PILOT]

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 think it will. It looks like SKW and XJ are bidding up Mesa! Buyout for LGA flying maybe. Look at the calls on those companies.

 

[ACL65PILOT]

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

Not if you are looking for week day flying for EV!

 

[Monster Buck]

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.

Obviously the story has yet to end but now RAH has entered into new territory. Some would say similar to ACA. RAH is no longer just a feed for Delta, United....with Midwest and Frontier they are now competitors to Delta United, SWA...You can plainly see what United and NWA did to ACA after they changed to a competitor instead of a feed out east. I watched NWA drop its fairs on ACA(Independence Air) routes to $50 bucks like many others did until they went out of business. RAH can operate them "separately" all they want, I don't think the majors out there will look away since they are "operated separately" when it comes to how they treat RAH in the future. No matter what the results are in the competition with the majors with RAH's new control of Midwest and Frontier, 100 percent of all their other flying is paid for by Delta, United....that all will cease to exist soon enough now that they are competitor. So BB will have his new airline and the subordinates(Republic, Chautauqua and Shuttle), who are completely dependant on the majors giving them their money and business, will be left to die.

YOU are now entering the same place(breaking out of the regionals and entering into the new LCC phase). The same strong "take over the world" and "show them" attitude that the ACA-Ind. Air guys had.

Good luck.

 

[JoeMerchant]

Obviously the story has yet to end but now RAH has entered into new territory. Some would say similar to ACA. RAH is no longer just a feed for Delta, United....with Midwest and Frontier they are now competitors to Delta United, SWA...You can plainly see what United and NWA did to ACA after they changed to a competitor instead of a feed out east. I watched NWA drop its fairs on ACA(Independence Air) routes to $50 bucks like many others did until they went out of business. RAH can operate them "separately" all they want, I don't think the majors out there will look away since they are "operated separately" when it comes to how they treat RAH in the future. No matter what the results are in the competition with the majors with RAH's new control of Midwest and Frontier, 100 percent of all their other flying is paid for by Delta, United....that all will cease to exist soon enough now that they are competitor. So BB will have his new airline and the subordinates(Republic, Chautauqua and Shuttle), who are completely dependant on the majors giving them their money and business, will be left to die.

YOU are now entering the same place(breaking out of the regionals and entering into the new LCC phase). The same strong "take over the world" and "show them" attitude that the ACA-Ind. Air guys had.

Good luck.

The same one Delta had?

http://www.airtimes.com/cgat/usb/delta/detail/insidecover-dl420323.jpg

Hard to believe such a little airline is now the world's largest....

 

[FBN0223]

I fail to see how we(DAL) can compete against Frontier Airlines when we pay RAH, the parent company of Frontier Airlines, beaucoup bucks to operate Shuttle America. It's a lose lose for Delta Airlines and a win win for RAH.

 

[JoeMerchant]

I fail to see how we(DAL) can compete against Frontier Airlines when we pay RAH, the parent company of Frontier Airlines, beaucoup bucks to operate Shuttle America. It's a lose lose for Delta Airlines.

You've been paying RAH to compete with you for years....I see them all the time next me boarding passengers for CAL, USAir, American, and United....Have been for years...This is nothing new, except everyone now has their panties in a wad because they crossed that mythical line between "regional" and "mainline"....

 

[Stifler's Mom]

What does DAL Management think about this?

 

[UnstableAviator]

I'm a simple pilot, but come on people, CEO's aren't mouth-breathing knuckle draggers. They are all on cordial terms with each other and its not like Bedford woke up a few months ago and though "I think I'll bet the entire company today". He knows something we don't, be it UAL's fincancial ill-health, TPG, Delta, future merger with JetBlue, any number of possibilities.

No doubt these exact issues were discussed with DL/CO/US/UA/AMR before anything was ever made public. BB and Co don't take CHQ from being a dirtball jetstream/Saab operator to buying two majors in 10 years by being idiots.