FLYI management geniuses, no really

[MONKEY]

From the beginning, it was obvious that the CASMs were too high to operate under the initial plan. Where I give them credit, is that I don’t believe that the plan that was given to the employees of ACA was really the true plan. They new that they would have to dump a bunch of CRJ’s in order to get their CASM down, but there is no way to sell that to the pilot group. Unless you do it under the guise of the evil UAL is killing us, we have to go out on our own to survive. Once they convinced the employee groups, the plan was set in motion. The pilots agreed to lower than industry average wages to fly the BUS. They will most likely file chap 11, dump some debt, and then come out a lean airline with the possibility of making it. A success for the airline, a major coupe to the pilots group. The group gets the BUS, but loses half of their brothers. The best part for management, the pilots are ok with it.



Was it possible for ACA to take the cuts and still make money? I don’t know, but I do know that there are other airlines making a lot of cash at those rates. Management now gets to live out their dreams of trying to be a major, and all it cost was half the employee group.



NOTE - I don’t know that this is the case, but it is an idea that has not been explored on this board.

 

[doh]

I do love a conspiracy theory! I think we give management too much credit for being too clever! I think they knee jerk most of what they do. Their bus. models are too optomistic because they THINK they are infallable. Then, when the excrement hits the fan, they just look to do what ever puts the most cash in their pockets in the short term and devil take the investors and other employees!

 

[j41driver]

The group gets the BUS, but loses half of their brothers. The best part for management, the pilots are ok with it.

I certainly wouldn't say the pilots are OK with it.

 

[dispatchguy]

The Transport Workers Union (Dispatchers union) creates a quarterly regional airline review, and the CASM for Indy air (from DOT Forms filed) was near 20 cents per mile.

20 cents per mile.....

Way too costly...

You can get it at their website at http://www.twuatd.org somewhere...

 

[tuna pimp]

Dispatch Guy,

how does Indy's CASM shake out vs. other RJ operators on a leg adjusted pure-play basis?

The direct costs must be pretty close to the others; I'm wondering how much additional allocated costs (debt/overhead etc...) might be affecting Indy. If that's the main cost driver then a trip through the courts might be the best/only salvation (as much as I'd hate to see it happen).

You will also see the CASM come down quite a bit as the A319s start to come on line and more flying to the west coast starts to happen.

 

[General Lee]

TED will put up twice as many flights to those West Coast cities and make it immediately unprofitable for Indy.



Bye Bye--General Lee

 

[tuna pimp]

That may well happen with Ted; though there's usually no shortage of folks willing to go to LAS if the fare is cheap enough.

Competition will have little impact on CASM beyond the marginal costs associated with one more/less passenger actually boarding the aircraft.

 

[DetoXJ]

I'll take Bluestar anyday over Indy. At least those guys knew the difference between preferred stock and livestock. Plan was failed from the beginning. I feel for the old ACA guys who once were at a good place.

 

[jjetpilot]

But with those slashed pay rates and the fact they are bidding on Air Wis routes.......

Another round of slashing pay/benefits for the entire regional industry?

dunno....

 

[Cappy]

From the beginning, it was obvious that the CASMs were too high to operate under the initial plan. Where I give them credit, is that I don’t believe that the plan that was given to the employees of ACA was really the true plan. They new that they would have to dump a bunch of CRJ’s in order to get their CASM down, but there is no way to sell that to the pilot group. Unless you do it under the guise of the evil UAL is killing us, we have to go out on our own to survive. Once they convinced the employee groups, the plan was set in motion. The pilots agreed to lower than industry average wages to fly the BUS. They will most likely file chap 11, dump some debt, and then come out a lean airline with the possibility of making it. A success for the airline, a major coupe to the pilots group. The group gets the BUS, but loses half of their brothers. The best part for management, the pilots are ok with it.



Was it possible for ACA to take the cuts and still make money? I don’t know, but I do know that there are other airlines making a lot of cash at those rates. Management now gets to live out their dreams of trying to be a major, and all it cost was half the employee group.



NOTE - I don’t know that this is the case, but it is an idea that has not been explored on this board.

This was the original plan...

The company, then ACA, was to obtain a certificate to fly charter operations using either the Airbus or Boeing. After a year doing charter ops and taking delivery of the third narrowbody, the company would anounce that it was going to break away from UAL over a two year period.

Once the initial flights began with the Airbus (or Boeing) the CRJ's were to slowly be removed from UAX flying to support the increasing narrowbody schedule. I do not know the exact ratio but I think 1.65 narrowbodies to one CRJ equates to 33 narrowbodies and 56 CRJ's.

This slow pull-out from UAX flying would have been controlled and not as financially burdensome as IDE finds itself now. What caused this, you ask? The bankruptcy at UAL changed the timeline and forced a decision on the part of management. Do they quit the dreams of Independence Air and participate in the re-bidding process for UAX flying with it's inherent risks or take a different kind of risk to do our own thing now?

I am glad that they chose to try and go it alone. Flying the Airbus is nice and I am making more money for fewer hours than I ever have. Sure, I might could do better somewhere else, but where? And when? Looking at the new UAL TA rates they are lower than ours at every year of seniority in comparison. Yes, I know it's only temporary for them. However, it shows that IDE rates are not so far off from industry standard.

Critisize our hourly rates all you want but don't forget the per diem and soft time.

What I have posted is as accurate to the truth as I can make it. I can't tell you my source so please don't ask.

I do not know if IDE will make it but I am not at all sad that we have tried. No regrets!

Mike