Frontier Airlines becomes Wholly Owned subsidary of Republic

[~~~^~~~]

Where are they going to fly them to? Does Republic know anything about marketing an airline? What about selling tickets?

It just bought that ability.

 

[flynryan15]

Perhaps but they have no market share. They have no stand alone route structure. They have no infrastructure to support a massive successful "start up" National airline. It takes a lot more than equipment to sustain a major stand alone airline operation. In order to do this, RAH would need to cut itself off from it's only revenue stream which is contract feed. Are you suggesting they will simply cease providing contract feed and over night start this "big" new airline. I just don't see it. Even if they did, the track record for such operations is hardly something to lose sleep over.

Like I said I am probably thinking crazy talk here.

 

[Lampshade]

Wonder if this might violate one of the mainline carriers' scope clauses. I seem to remember that was one of the ways UAL worked to kill Indy Air. Indy could not operate the 320's because they violated UAL scope, but UAL would not release ACA (parent of Indy Air) from their obligations for express service, unless ACA paid very high penalties to get out. This effectively bled ACA dry. Does this look like a possibility? 'Cause RP needs to be stopped.uke:

Peace.

Rekks

I was thinking the same thing but most major contracts have been gutted from the glory days of 2003. It would be interesting to see all the majors take umbrage to this move.

 

[~~~^~~~]

I'm not in the least bit concerned that RAH is going to become some kind of powerhouse in the industry. We're talking about an RJ operator latching on to a very small and hardly profitable National airline. The new airline will face tremendous competition and if RAH were to in fact lose code share contracts they would be hard pressed to finance their new "Major" airline for long.

This is positioning, nothing else. A small Bus operator in DEN is hardly going to produce a "game changer" if you will.

I see several airlines now positioning like vultures watching the carcass of United Airlines. The only reason Virgin America exists is to try to push United over the edge so Branson can increase the viability of Virgin Blue across the Pacific.

If United fails, this is a game changer for Republic, which is the only game Bedford is playing. Also, if United fails, SkyWest is in a perilous situation. They would lose 40% of their revenue overnight and it would cost them more than a billion to build what Republic just got for a debt exchange and a little cash. Regardless, we can see that the US domestic market is going to remain extremely competitive and if any profits are to be made on the loss of United's lift, it will be on transoceanic routes where Delta, Virgin and others already have networks in place to enjoy the marginal revenue increase.

Ironically, I do not see this as the end for Frontier. Because Republic is about the only airline where the pilots have fought for good scope, Frontier is unlikely to be whipsawed against Republic. This is actually a lot better scenario for the pilots than if Frontier had bought Republic and ALPA's scope applied to the transaction.

Another point. ALPA argues that these RJ's can't be flown by majors because they simply are not profitable. Yet, we see an RJ operator buy up two distressed "majors" with their profits.

This could still be shot down at the Courthouse. The Bankruptcy Court has to sign off on this. WORST CASE SCENARIO would be a non union carrier like SkyWest comes knocking with a plant to operate Frontier as an alter ego (even if only to greenmail Republic). SECOND WORST CASE an ALPA carrier jumps into the fray and their crappy ALPA scope allows for Frontier to operate as an alter ego. We will see what happens.

United has great people and for them, I hate what I see in these tea leaves.

HEATHROW, England, June 22 (Reuters) - Virgin Atlantic [VA.UL] will take delivery of 10 new Airbus A330-300 aircraft between now and 2012, allowing it to expand while awaiting delivery of Boeing Co's (BA.N) troubled 787 Dreamliner.
The 25-year old airline, controlled by Richard Branson's Virgin Group, told Reuters ahead of an official announcement at Heathrow airport that the aircraft were worth $2.1 billion.
"This will help us with future growth, taking us to new destinations such as Beijing and Vancouver," Branson told a news conference on Monday. "We have had some good years and have accumulated some cash."....
Branson said conditions were so bad one or two big carriers may go bust and pleaded with governments worldwide not to bail them out and to allow younger airlines to take their place.
"Carriers with older planes, with a cost base out of control, should not necessarily last forever," he said. "As old trees come down, new saplings start growing."

 

[Lear70]

In order to do this, RAH would need to cut itself off from it's only revenue stream which is contract feed. Are you suggesting they will simply cease providing contract feed and over night start this "big" new airline. I just don't see it. Even if they did, the track record for such operations is hardly something to lose sleep over.

Why, EXACTLY, would RAH have to do this?

Explain to me WHY any other airline can cancel their ASA with RAH because RAH owns the controlling share of another, competing airline?

These regionals already provide feed to competing airlines within their own organization. Why would they suddenly have to STOP now? Unless you know something I don't about non-compete clauses in their ASA, I don't see anything that would require them to cease providing contract feed while simultaneously managing an already-existing major airline.

 

[Superpilot92]

Perhaps but they have no market share. They have no stand alone route structure. They have no infrastructure to support a massive successful "start up" National airline. It takes a lot more than equipment to sustain a major stand alone airline operation. In order to do this, RAH would need to cut itself off from it's only revenue stream which is contract feed. Are you suggesting they will simply cease providing contract feed and over night start this "big" new airline. I just don't see it. Even if they did, the track record for such operations is hardly something to lose sleep over.

The operation is nothing to worry about, its what they will do to pay scales and the effects that will have on the rest of us when it comes to future contract negotiations.

 

[~~~^~~~]

True - it isn't in the scope sections. All that language that forced ACA out when they started Indy Air was removed when the Majors decided to try to spin off their wholly owned's. The scope language limited potential buyers, so they got rid of it.

 

[~~~^~~~]

The operation is nothing to worry about, its what they will do to pay scales and the effects that will have on the rest of us when it comes to future contract negotiations.

I believe they will have one list and be negotiating with an airline with reasonable cash reserves. Why do we assume Frontier's coming down?

As long as they come together in a unified fashion, they may have pretty good results.

After all, did Delta come down to NWA rates or did both sides get something based on their UNITY?

 

[ATRCA]

Why, EXACTLY, would RAH have to do this?

Explain to me WHY any other airline can cancel their ASA with RAH because RAH owns the controlling share of another, competing airline?

These regionals already provide feed to competing airlines within their own organization. Why would they suddenly have to STOP now? Unless you know something I don't about non-compete clauses in their ASA, I don't see anything that would require them to cease providing contract feed while simultaneously managing an already-existing major airline.

Ok, uuummm....... read my post again. You've lost me. I never said they were going to cancel anything. I'm just wondering how they could operate the same airframe for UAL for example and Frontier. I doubt they could use the same airframes to cover all contract and company lift. The assumption was that they would use their current fleet in combination with the Busses from F9 to create a new stand alone company. That's a stretch. I think F9 will operate solo for a while and contract lift will continue. Even if I'm wrong, I could care less. I don't care what happens to RAH. They're not on my radar and I don't see them being serious competitors any time soon.

They're buying Frontier not American.

 

[CitationLover]

It just bought that ability.

For markets in the Western US and Mexico. Perhaps we (Midwest) are the east coast plan, but we need to be in bankruptcy to make his plan work. I somehow do not see delta selling their share to this emerging competitor.

 

[Newf Dog]

The bankruptcy court will absolutely approve this deal if nobody else steps up. The court has a responsibility to the creditors and that's it. If F9 management can make the case (and they will) that they need this deal or they will fold the deal will be approved easily. This will be the easiest part of the whole thing.

F9 pilots can negotiate whatever they want with Republic. The F9 pilot group is still susceptable to 1113 proceedings to make this happen (see above paragraph). The company will absolutely go that route if need be and it's still a tool in their arsenal thanks to the F9 pilots voting in a concessionary deal instead of forcing managements hand.

Once Republic has F9 in the bag the shell games will begin. Anybody who thinks this is good for any pilot at F9 has their head in the sand. It's a simple matter of whipsaw and moving planes and certificates. No way any pilot group can stop it.

The only hope for F9 pilots is a bigger player like jetBlue or SWA. I would put my money on a late bid by SWA. They have the cash, they have the operation in Denver, they'll get the A concourse while knocking out a major competitor on price, and they will really press UAUA, and even if they have to spend a few hundred million it's chump change for what they will get.

Having said that I don't know how the current contract situation at LUV fits in here but I'm sure it would be no problem to dump Lynx. The Airbus versus B-737 situation is a non-issue. Think outside the box. LUV could easily outbid Republic and it would be a major score. Now, that would be the only good news for F9 pilots and that's where Allegheny-Mohawk would come into play.

Any F9 pilots or anybody else thinks being 'rescued' by republic is a good deal should remain in their fantasyland as long as they can because the cold cruel hand of reality is about to slap them upside the head.

 

[~~~^~~~]

Unfortunately due to MidWest's scope and operation of MidWest as an alter ego, I don't see this as good for MidWest. I'm not sure how it impacts MidWest.

 

[Lear70]

I thought what you wrote was pretty apparent.

Originally Posted by ATRCA
In order to do this, RAH would need to cut itself off from it's only revenue stream which is contract feed.

Again, WHY???

 

[ATRCA]

I thought what you wrote was pretty apparent.


Again, WHY???
[/I]

Whatever man, have it your way. RAH to rule the world. You heard it here first. Feel better?? I'm sure they'll just use their RJ's to cover the entire system while maintaining their contract obligations.

 

[Lear70]

Whatever man, have it your way. RAH to rule the world. You heard it here first. Feel better?? I'm sure they'll just use their RJ's to cover the entire system while maintaining their contract obligations.

No, just trying to figure out why you posted what you did?

 

[~~~^~~~]

ALPA has set such a bad precedent that many ALPA represented pilots simply do not believe scope that unifies pilots can work.

Once Republic has F9 in the bag the shell games will begin. Anybody who thinks this is good for any pilot at F9 has their head in the sand. It's a simple matter of whipsaw and moving planes and certificates. No way any pilot group can stop it.

Here's the contract language:

3. In the event of a merger of airline operations between the Company and another air carrier the Company will require, as a condition of any such operational merger that provisions be included requiring that the surviving carrier shall provide for fair and equitable integration of the pre-merger pilots’ seniority lists in accordance with Articles 3 and 13 of the Allegheny Mohawk LPPs.

 

[Newf Dog]

OK FIN have it your way. I'm content to let time prove me correct.

You put your faith in a contract. I'll put my faith in Bedford's lawyers and accountants. Contracts don't much matter anymore anyway or haven't you been following the news lately.

Either way I'm out so it doesn't matter for me anymore. I feel bad for all the friends that will be getting hammered by this. This is a lose-lose for pilots everywhere. Best of luck to you if you think otherwise.

I will be stunned, however, if SWA does not find a way to purchase F9.

 

[jetflier]

Regional airline buying a LCC/Major airline. This will be the next big threat to our profession. It will be increasingly difficult to hold the line on pay/benefits at the airline being purchased. Now more than ever before, pilot groups have to draw a line in the sand, then stick to it. Pilot wages continue to be reduced to the level of non skilled labor. A long time ago, I was told that a senior captain could buy a new Cadillac on a months takehome wages, today about $50,000.00. Gross pay had to be about $65,000-$70,000 PER MONTH, in order to take home 50,000. Remember, as ALPA said, "we're taking it back".

 

[~~~^~~~]

Newf: You are right SWA, or SkyWest, might play spoiler. It isn't a stock deal, so the greenmail would actually have to be done on the Courthouse steps.

Maybe the Teamsters will get rolled over. I don't think so. I have to hope the pilots do the right thing and their contract is honored. I'm always pulling for our profession.

 

[ATRCA]

OK FIN have it your way. I'm content to let time prove me correct.

You put your faith in a contract. I'll put my faith in Bedford's lawyers and accountants. Contracts don't much matter anymore anyway or haven't you been following the news lately.

Either way I'm out so it doesn't matter for me anymore. I feel bad for all the friends that will be getting hammered by this. This is a lose-lose for pilots everywhere. Best of luck to you if you think otherwise.

I will be stunned, however, if SWA does not find a way to purchase F9.

Prepare to be stunned!! I don't think any other bidders will emerge. There is nothing there worth buying. A small operation in DEN?? SWA will have it's way with Frontier regardless of ownership. They will comfortably win that battle and will be a few 100 million richer by the end. If buying F9 was a good deal, than there would be others calling. In the end, RAH is picking low hanging fruit.