Frontier officials: Mesa may stop region

[big dog1]

http://www.rockymountainnews.com/dr...2083402,00.html

Frontier officials: Mesa may stop regional flights
By David Kesmodel, Rocky Mountain News
July 2, 2003

Mesa Airlines probably will stop flying regional jets for Denver-based Frontier Airlines in January, Frontier officials said today.

An expanded partnership between Frontier rival United Airlines and Mesa - announced Tuesday - puts restrictions on Mesa's ability to have partnerships with other carriers in United's hub cities, Mesa Chief Executive Jonathan Ornstein said in an interview. He declined to provide details.

Denver-based Frontier has been in talks with Mesa about renewing their 17-month-old Frontier JetExpress partnership - and ratcheting it up - before the current contract expires Aug. 31. They will extend the current arrangement until Jan. 1, 2004, Sean Menke, Frontier's vice president of marketing and planning, said in an interview.

"We probably won't go any further," he said.

Frontier has been talking to other potential regional-jet partners and will continue to be able to do so through Jan. 1, he said.

Restrictions like those place by United "are very common, particularly with United," said Tony Christello, an analyst with BB&T Capital Markets. "They are not going to want to have another major competitor's codeshare partner having the opportunity to take revenue away from them in the same marketplace."

United spokesman Jeff McAndrews declined to comment on the matter.

Under a new 10-year deal, Phoenix-based Mesa will start flying 35 regional jets under the flag of United Express in August, in addition to the 10 turboprop planes it will begin flying for United from Denver International Airport on Sunday.

"I'm sure we will work things out (with Frontier) so it is amicable, whatever the result is," Ornstein said. "We really do like those guys, but it's hard to turn down a deal for 60 aircraft. Business becomes business."

For Frontier, Mesa today flies to eight cities from Frontier's DIA hub with five aircraft. Talks on an expansion of that deal had included the possibility of adding five to 10 jets.

Mesa lost $1.5 million on Frontier JetExpress in the January-March quarter, even after the companies revised the deal.
Frontier on March 1 began paying Mesa set fees for flying Frontier JetExpress routes and keeping all the revenue. Previously, the companies incurred their own costs and divided the revenue on a prorated basis.

Mesa is "now break even or a little bit better" on the alliance, Ornstein said.

Serving fliers with regional jets has become more popular in recent years as carriers look for ways to fly shorter routes that lack enough demand to fill larger, costlier planes.

 

[Wiskey Driver]

http://www.rockymountainnews.com/dr...2083402,00.html


Mesa lost $1.5 million on Frontier JetExpress in the January-March quarter, even after the companies revised the deal.
Frontier on March 1 began paying Mesa set fees for flying Frontier JetExpress routes and keeping all the revenue. Previously, the companies incurred their own costs and divided the revenue on a prorated basis.

Mesa is "now break even or a little bit better" on the alliance, Ornstein said.

With a below 50% completion ratio what do you expect!!

WD.

 

[crashpad]

Subcontracting to commuters never seems to yield the riches each party hopes for. Maybe companies like Jet Blue, that purchase their own regional jets, are setting a precedence.

 

[OOramperpilot]

Doesn't yeild riches.

crashpad,

I'm a little confused by your post and think you might be painting with a pretty broad brush.

To use UA and OO as an example, I've seen powerpoint slides from UA that showed the UAX operation contributed almost $300 million to their bottom line each year (hopefully that info wasn't developed using Enron accounting methods) and OO has been more than moderately profitable for the last several years to the tune of $20 to $50 million per year. Not amazing, but definately solid performance. Now, admittadly, I don't know what UA has spent on the UAX program so I don't know if it's worked out in their favor but I can't imagine that it hasn't and also granted that OO's DL operation contributed just more than half to that performance. I'm sure you'll agree that it's pretty tough to find a single major/single regional relationship to compare that against what with majors and regionals alike double dipping to one extent or another.

Ornstein himself has recently said (not a reliable source in my opinion but a matter of public record anyway) in news releases that the F9 operation only recently became marginally profitable for YV and this is just one example and a small part of their overall operation. I'm fairly certain that most regionals have made a profit in the last several years, and again, admittadly, I'll have to do some homework online on their past financials to back that up but I think it's fairly accurate so to sum it up, in most cases, at least one party has made a dime on these type of relationships so it's yielded riches for somebody.

Just my two cents.

 

[WileE]

Re: Re: Frontier officials: Mesa may stop region

With a below 50% completion ratio what do you expect!!

WD.

Hey WD, do you have a reference for claims like this or are you just blowing smoke again?

 

[Wiskey Driver]

I am in Denver friend!! I ride with and speak with frontier crews and gate agents all the time. I don't think you really want to pull my bullSh it card on this subject do ya?!!!

WD.

 

[Skank]

1. I don't consider an airplane (re: Jetblue bought their own RJ's)with 2300 nm range and rvsm capability to be an RJ. But that's just me. Call it what you like.

2. An airline with a 50% completion factor would likely be out of business. I am pulling your B.S. card. Attribute some numbers to a source we can all trust. Not the old anecdotal "my friends told me." I'm not siding with Mesa, but please.....

 

[crashpad]

1). I call them RJ's because that's the customer perception.

2).Skank is correct. 50 % is a bogus number.
My company ID beats WDs' BS card.
Sorry, WD. I really like your avatar, though.

 

[Wiskey Driver]

CP, you lost me on number 2 about the company ID. 50% is the number that was floating around a few months ago I don't know what the new number is if there is one.

WD.

 

[wscrj]

Really WD, I expect MUCH better from you. 50%?, was that for a day, a week, an hour...the month? It all makes a big difference doesn't it.

The actual number from our SOC manager for last month was around 95%. While not great, it is certainly not as low as your "guess."

The low number is partly due to the fact that there is NO spare available. It was put on line to satisfy US's ranting and raving for more a/c.

Reading your posts is becoming more and more like watching CNN...never let the truth get in the way of a good story.

Enjoy your 4th...

 

[Wiskey Driver]

WS,

I really don't remember a time line on this issue, sorry. The employees of Frontier don't hold mesa in high regard at all and comment that they wish F9 would change to another carrier for their express service. Sorry to have disappointed you, you have a great holiday as well...

WD.

 

[wscrj]

Well, it would seem both parties will get their wish come JAN04.

Still waiting for that Virgin gouge....

 

[Wiskey Driver]

All in do time young jedi!!

WD.

 

[Anaconda]

1). I call them RJ's because that's the customer perception.

no, that's the perception created by the press and people on this board. go to the embrear website and take a look. there is nothing on there to indicate they are marketed as an rj, they just happen to be made by a company with a long history of building rj's. the acft will have more pax room than jb's own airbus. i doubt they will be perceived by the customers as rj's (e.g., crj) when the sit in them.

 

[Wiskey Driver]

Hmmmmmm Big snake who back losing football team

If mainline airlines don't fly them and regionals do they will always be known as a regional jet...

Look at NWA the true original RJ is the DC9 but it flys for a major with major pay I might add so it will never be called a regional jet...

WD.

 

[Jetscream32]

Funny thing regarding "RJ's" In all the USairways ALPA code-a-phone updates which are usually posted on usaviation, they call them "SJ's" small jets. It's one of those things that can be debated forever. The way I see it, they should just be called what they are.

 

[stillaboo]

If it pays likea n RJ, it's an RJ!

Well, whatever they are, they're superior to some mainline equipment. I think I read on this board somewhere that pay for them will be more than JB FO's, but less than JB Cpts. I'd assume this is refering to pay for the EMB Cpts, and the FO's would be paid less than 'Blue FO's (yes, I know they will ALL be JB pilots, but you get what I'm trying to say)

Point being, with so much mud-slinging going on regarding who can lower the bar flying RJ's (is it Mesa b/c their improvements weren't good enough, or is it SKYW, ACA, and Wiskey b/c they voted in concessions), I think we're all missing the big point here:

If all these pilots will be 'Blue pilots, then they all should be paid like mainliners, not like Express pilots. If 'Blue pilots are paid less if they fly EMB, then that is establishing a new standard, one where 130 passenger+ jets are on a lower payscale, one based on the pay of a large regional rather than the small mainliners. Some might even call it B-scale.

JB pilots, you run your own show, and that is fine. But know that you alone are responsible for setting 'the bar' for whether these planes are RJ's or jets. If they're jets, than the pilots should be paid like jet pilots.

Are they jets or RJ's? It is up to JB to tell us. The entire industry eagerly awaits.

-Boo!

removed ASA from the 'concessions' list. Typo on my part. Sorry ASA and Tim47SIP.

 

[Skank]

OK, let's try again. Does a 777 captain at AA make the same as a 757 captain at AA? No! Is the 757 captain earning "B" Scale wages? I'd say no, but you can say whatever you like. So, by introducing an aircraft with 56 fewer seats at a lower pay scale have we created a "B" scale? Again, have it how you want, but I'd say no. Do you even know what the "B" scale at AA was like? You could have started as a 767 FO and been payed about 24k a year your first year. That is a "B" scale.

Suffice it to say, it will beat the pay in any seat of any aircraft at a regional airline. I won't go into detail, but the other forms of pay, such as profit sharing, stock option, stock purchase, etc should make it clear to you that everyone here will be afforded the same benefits and career opportunities. Can upgrade to an Airbus 320 in a couple of years at a regional?

One more item. We don't get involved in ALPA style pattern bargaining. If we did, we already would have taken a pay cut, right?

 

[Tim47SIP]

Boo

(is it Mesa b/c their improvements weren't good enough, or is it SKYW, ACA, ASA, and Wiskey b/c they voted in concessions),

Are you sure about ASA voting in concessions??? If so, when? Thanks.

 

[avrodriver]

So....getting back to the Subject of the thread.........do you think Fontier will totally drop JetExpress flying or go at it with someone else and if that's the case with who? Even the original press release made it sound like they were interested in expanding the concept.