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.