Good news for Lakes

[azpilot]

I hope you can call some people back and add a few...
- AZ Pilot

Dow Jones Business News

UAL And Great Lakes Aviation Reach Code-Share Deal

Friday July 18, 1:59 pm ET
By Michael McHugh, Of DOW JONES NEWSWIRES


CHICAGO (Dow Jones)--UAL Corp. , parent of United Airlines, and Great Lakes Aviation Ltd. have amended their code-sharing agreement to allow UAL's regional subsidiary more access to locations currently serviced by Great Lakes.

motion to terminate the code-sharing agreement between UAL and Great Lakes was removed from the agenda of Friday's hearing of the Bankruptcy Court for the Northern District of Illinois after the parties reached an agreement. UAL had been seeking to terminate its arrangement with Great Lakes for cost-saving reasons after it filed for bankruptcy protection in December.

A UAL spokesman said Friday the agreement allows UAL to introduce United Express service into some additional markets that were previously serviced by Great Lakes under the code share agreement.

Meanwhile, UAL Chief Financial Officer Jake Brace said during a break in the proceedings that the company continues to explore avenues for exit financing to cover UAL when it emerges from under Chapter 11 protection, including private equity.

"A lot of people have expressed an interest in investing in us and we'll look at that when the time comes," he said.

Brace reiterated UAL expects to exit from bankruptcy in either the fourth quarter of 2003 or the first quarter of 2004.

He also said the airline is still in talks with the Air Transportation Stabilization Board for roughly $2 billion in financing. Failure to secure a loan guarantee from the ATSB last year was one of the contributors to its filing for bankruptcy protection.

By Michael McHugh, Dow Jones Newswires; 312-750-4142; [email protected]

 

[flying4food]

Once again, Lakes survives!! I'm glad to hear that!!! Good look guys!!

 

[Frank Abagnale]

Maybe

The way it reads to me is that they keep the code share, but lose the exclusivity of thier routes. Good today, but if they are not given new routes it could be very bad later.

 

[stillaboo]

Re: Maybe

The way it reads to me is that they keep the code share, but lose the exclusivity of thier routes.

I read it that way too. Good to hear Lakes is alive, but watch where UAL adds Mesa. They operate 1900's, they hub for UAL out of DEN with the Dash, and will soon have some RJ's there for UAL as well (likely). Just watch closely if you end up sharing those routes with Mesa, b/c UAL might just be using you as a temporary measure.

I hope I'm wrong. Congrats, Lakes!

-Boo!

 

[eaglefly]

Right. UAL does not want to "ax" and then restart. They want to "add" (Mesa) and then "cancel" (Great Shakes).

Same kinda deal they want with ACA - The ability to "gradually replace", insuring a seamless change.

The writing's on the wall.

 

[Mayday911]

Great Lakes is simply a codeshare for UAL...meaning they share the risk for flying the route. Unlike the Express carriers that will always make a profit provided they operate the flights.

Mayday.

 

[Cardinal]

In fact everybody has been recalled now. The difficulty that I see is that any genuinely profitable route will get cherry picked by a UAL Express carrier. It seems that couldl make it difficult to achieve any long term success/growth. Lakes just announced an F9 codeshare to Grand Junction and Rapid City, that will directly compete with UAX. DEN-GJT is operated by ZW, OO, YV. DEN-RAP ZW, OO. Now us too. It will be nothing if not interesting.

 

[flythere]

A UAL spokesman said Friday the agreement allows UAL to introduce United Express service into some additional markets that were previously serviced by Great Lakes under the code share agreement.

I read that to say Lakes will get paid for routes that they were previously not paid for by UAL, and maybe more!! That should be good right??

 

[stillaboo]

I think you read it wrong (I hope you didn't though). Not only is Lakes not a UAX carrier (but rather a codeshare), I think all you need to do is read this one part to see the problem:

"allow UAL's regional subsidiary more access to locations currently serviced by Great Lakes"

Lakes is not a regional subsidiary, and the agreement will allow those who are (Mesa, Skywest, TSA, Air Wiskey, and ACA -for now) more access to "locations currently serviced by Great Lakes".
I don't know the terms of the agreement, but if UAL gets to control the 'Lakes flight schedule, I forsee a situation where if Lakes has 4 flights a day to XYZ, but only 2 of them are running full, guess which 2 UAL will put one of their 'subsidiaries' on? Even if 'Lakes controls their schedule, can 'Lakes run in direct competion to a UAX flight (ie. Lakes and UAX both run a flight from XYZ to DEN at the same time)? And, if 'Lakes can, how long do you think it will take for the UAX flight be be changed to an RJ; very few passengers would choose to fly a 1900 over an RJ . As soon as 'Lakes is run out of the market, the UAX flight reverts back to a TP to reflect the traffic on the route, or the service is cut so that an RJ will run full. Remember, if a UAX flight doesn't run full, it only hurts UA, not the UAX carrier. I doubt UA would let 'Lakes cut into their bottom line for long.

Does anyone have details on this agreement b/t 'Lakes and UA that can adress how much control UA has over 'Lake's flight schedule?

Good luck, 'Lakes!

-Boo!

 

[DoubleDown]

When the world ends, the only thing left will be cochroaches and Great Lakes. I love this airline! They really found a niche with those EAS routes.