Independence Air Seeks UAL Affiliation AGAIN... Not good.

[Heavy Set]

I just read on the USA Today website (not most reputable I admit - I tried to copy and paste the article but it won't work) that Independence Air has "quietly" bid to resume flying as a UAL regional partner.

Can you believe that? I know that Indy Air is hurting financially but give me a break... I thought they were hating each other - Indy Air alone has cost UAL a lot of money in the IAD market... It's true that Indy Air will only bid for the partner role and it still might not win (especially if Mesa and TSA lowballs everyone else). This can't be good for any of the Indy pilots because it would likely mean lower wages (to be competitive in the bid).

Makes you wonder about the status of the Indy A319s. I have heard that Skywest might actually be considering A318/A319s operations as well. Who knows - maybe UAL would outsource A319 flying to Indy on the East Coast and A318/A319 flying to Skywest on the West Coast as they continue to focus on higher-margin international flying... I am sure the battered UAL pilots wouldn't care for that too much (more outsourcing to cheaper pilots).

Can someone else copy and paste the article? My computer won't let me...

 

[GuppyPuppy]

Here ya go!

Independence seeks United affiliation By Marilyn Adams, USA TODAY
Six months after launching as a discount carrier, struggling Independence Air has quietly bid to resume flying as United Airlines' regional partner.
http://images.usatoday.com/_common/_images/clear.gifhttp://images.usatoday.com/travel/_photos/2004/12/23/flyi-inside.jpghttp://images.usatoday.com/_common/_images/clear.gifHappier day: Employees cheered when Independence launched way back in July of this year.http://images.usatoday.com/_common/_images/clear.gifBy Alex Wong, Getty ImagesReflecting the brutal airline environment, Independence Air would cease selling tickets directly to travelers and instead make its money from contract payments with United as part of the No. 2 carrier's United Express network.

Independence corporate parent Flyi is among 10 bidders for the pending contract with United. Flyi, previously called Atlantic Coast Airlines, launched Independence as the USA's first all small-jet discount carrier in June, flying from Washington Dulles. But for 14 years before that, its regional jets fed United flights from Dulles as a member of the United Express network. After United filed for bankruptcy protection two years ago, it sought to pay Atlantic Coast less. They parted ways.

Independence Air this year has faltered amid high jet fuelprices and fare wars. Independence's planes have been flying half empty, and it posted an $83 million loss in the third quarter. Its shares closed Wednesday at $1.77, down from a recent high of $10.25 last January.

The carrier faces a possible bankruptcy protection filing next month when $83 million in aircraft lease payments come due. Airline spokesman Rick DeLisi said the carrier is in talks with the aircraft owners about the lease payments.

When United recently sought bids on United Express service at Dulles, Independence Air submitted one, according to two people with direct knowledge of the process. Independence and United declined comment about the bid.

Washington-based consultant Mo Garfinkle said "it makes commercial sense" for United and Independence to become partners again. But for Independence, he said, "It would be admitting defeat. And both sides would have to get past their egos."

Independence's largest shareholder, Boston-based PAR Capital Management, has been urging Independence CEO Kerry Skeen to give up the low-fare experiment and go back to the regional feeder business.

PAR, which owns a 10% stake, would also welcome a suitable buyer for the airline, Vice President Ed Shapiro said. A year ago, Mesa Air Group, a Phoenix-based regional jet airline, tried unsuccessfully to buy Atlantic Coast in a hostile takeover. The settlement agreement that halted Mesa's shareholder solicitations will expire in January.

Independence spokesman DeLisi said he knows of no acquisition talks with Mesa or any other carrier. Mesa declined comment. DeLisi said the airline has hired consultants to explore all options.

Independence Air flies 300 non-stop flights a day from Dulles to about 40 large and midsize cities in the Northeast, Southeast and Midwest with a fleet of 80 regional jets.

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[dojetdriver]

It's amazing to watch how USA Today, CNN, FOX, ect, can put a spin on anything. What's worse is that some people actually read so much crap into the story. This whole process happened TWO minths ago

This is hardly anything new, or newsworthy for that matter. The management at Independence Air was obligated, by the shareholders, to submit a bid on the UAX flying, one of ten or so other airlines that also submitted bids. Just like when Mesa tried a hostile takeover, the management was obligated to consider the offer, by the shareholders.

Wether or not IA was serious or not is a whole different matter. With our high operating costs, I seriously doubt that United would consider IA an economical option for them. Besides, with scum like Johnny Orenstein running his s#$tbag cheap operation and paying his labor WAY to low, as well as some other bottom feeders out there (TSA, Chatauqua, ect) there's plenty for them to chhose from that probably tell United that they can do it for less than IA.

 

[jukebox]

SkyWest will make an offer for IA

SkyWest will probably make an offer to buy IA as it would save face for everyone. They have been looking for the right buyout opportunity and the price is probably right at this time to suck up these guys. We have classes going non stop right now with up to 50 pilots a class, should pass 2000 pilots on the seniority list in the next month, and only talk of more pilots and FA's needed. Something is definitely up.

 

[Twotter76]

If you read that article carefully you will notice that nowhere in there do they say anything other than "yes we bid on it". My info (usually wrong) was that the bid they in was the old rates +30% or so. Nothing about we really want the flying, it was just yes we bid on it. You can't really draw anything from the useless A Today article other than the fact a bid was indeed submitted as was being required by the companies stockholders. I just can't see Skeen going to being UAL's b!tch. I can't really see SKYW buing Indy either but certainly stranger things have happened in this industry.

 

[79%N1]

How sad is it that after the UAL bid is announced, 2 regionals may be gone!!! If Air Wisconsin loses the bid, what would become of them? They would have nobody to fly for! And If Indy/ACA loses the bid, it seems bankrupcy looms ---- and we know how well that worked out for Midway.

 

[Heavy Set]

Air Whiskey Could Be a Big LOSER in this Situation...

It makes sense that UAL would look to potentially outsource some of its A319-sized flying given recent statements to the press about focusing on more profitable routes. The fact that Indy has the capability to provide this lift is important - and the fact that Skywest is already talking about that sized aircraft is interesting.

I am not sure that UAL would want Indy and Skywest to merge because it would reduce its bargaining leverage with the two airlines. One thing is for certain however, UAL wants Indy OUT OF THE WAY so it would be likely that it would award feed to Indy - to reduce IAD competition and restore its pricing monopoly...

The big loser in this situation could be Air Whiskey if Indy wins the feed at IAD. At the same time, Air Whisky and Skywest are both courting Northwest to be the third Airlink - this could be very interesting and not a good situation at all for Air Whiskey drivers...

 

[FlyComAirJets]

What makes me curious is what in the world did Air Wisconsin do to deserve this? For years they were THE premier regional airline for pay, work rules, and equipment operated. First Persian Gulf comes along and BOOM, they are broken up and pilliaged by UAL (before AA could whack them).

Then the Second Persian Gulf comes along and once again UAL has it in for them. Why, they didn't do an Indy Air on them?

 

[dojetdriver]

What makes me curious is what in the world did Air Wisconsin do to deserve this?QUOTE

I don't think AW did anything to deserve this kind of treament. The reason for their situaition can be summed up in two words, Untied Airlines.

 

[Heavy Set]

That should provide a lot of security to Indy drivers if Indy Air supports UAL in the future - Air Whiskey's situation proves that no amount of loyalty or good performance guarantees you'll be around in a few years - it comes down to money alone...

If you were an Indy pilot, would you even want to tie your professional future to UAL? I don't think I would...

 

[Rez O. Lewshun]

That should provide a lot of security to Indy drivers if Indy Air supports UAL in the future - Air Whiskey's situation proves that no amount of loyalty or good performance guarantees you'll be around in a few years - it comes down to money alone...

If you were an Indy pilot, would you even want to tie your professional future to UAL? I don't think I would...

Loyalty? Any one care to discuss UFS?

 

[FDJ2]

Independence Air Weighs Offer From United
Thursday December 23, 3:41 pm ET
By Matthew Barakat, AP Business Writer Low-Fare Carrier Independence Air Considers Bid on United Airlines Feeder Routes



McLEAN, Va. (AP) -- Independence Air, which has struggled since its launch six months ago as an independent low-fare carrier, has been asked by bankrupt United Airlines to return as a feeder carrier, a company spokesman said on Thursday.

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Rick DeLisi, a spokesman for Independence Air's Dulles, Va.-based corporate parent, Flyi, Inc., said the company received an unsolicited request from UAL Corp.'s United to bid on the regional feeder routes.

He said that the company has discussed the issue with United, but declined to confirm that the company actually submitted a bid.

"We have always said that we would be open to listening to any idea," DeLisi said.

Flyi executives had previously stated they would consider a return to flying as a regional carrier.

United spokesman Jeff Green confirmed that Flyi was one of 12 companies from which United solicited bids, but he declined to comment on whether Flyi responded.

Independence Air launched in June as a low-cost carrier based out of Dulles International Airport, near Washington, D.C. The airline used a fleet of 50-seat regional jets to offer service to a variety of Eastern cities, including many smaller cities that never had a low-fare carrier.

Despite round-trip fares as low as $58 and an aggressive marketing campaign, the planes have been only half full. The industry average is about 70 percent.

The company reported losses of $83 million in the third quarter, as high fuel prices also hurt the company's bottom line. It has warned that bankruptcy is a possibility as soon as January, when it faces a series of aircraft lease payments.

If Flyi were to resume as a United regional carrier, it is unclear whether it would totally abandon the Independence Air brand, or continue operations in a hybrid role.

Independence Air has altered its business model in recent months by tweaking its route network and making its tickets available through traditional travel booking networks.

The airline had hoped to keep costs down by selling tickets exclusively through its Web site, but found that business travelers often still rely on traditional distribution networks to purchase tickets. Many of Independence Air's routes cater more to business travelers.

Independence Air has also been under pressure from its largest shareholder, Boston-based PAR Capital Management, to end its experiment as a low-fare carrier and resume its role as an express carrier for United.

PAR, which has acquired a 10 percent stake in the company over the last two months, wrote a letter to the Flyi board of directors Nov. 15, stating that "you no longer have the luxury of blindly pursuing a strategy that will clearly require more financial resources than you have at your disposal, thereby inevitably leading to the complete destruction of shareholder value and the substantial impairment of your creditor liabilities."

Flyi, formerly known as Atlantic Coast Airlines, embarked on the Independence Air experiment after United Airlines filed for bankruptcy and sought to sharply curtail the profit margins of its regional carriers.

Though some analysts questioned the wisdom of trying to run a low-fare airline with regional jets, which generally have higher unit costs, Flyi executives said the potential rewards of establishing a successful independent carrier outweighed the risks.

Flyi shares increased 1 cent to $1.78 in afternoon trading Thursday on the Nasdaq Stock Market.

 

[GogglesPisano]

Talk about getting back together with your ex-wife after a messy divorce. Anyone have any statistics on that?

 

[Rottweiller]

Loyalty? Any one care to discuss UFS?

I don't think we have that amount of time!! UFS though lets be fair, although a great bunch of guy's left very little to be desired carrier wise as far as UA were concerned.

 

[Pukindog]

If Skywest started flying 319/320s, wouldn't they lose their Delta flying?

 

[lowecur]

If Skywest started flying 319/320s, wouldn't they lose their Delta flying?

I believe so.

If Skywest was in the market, they could p/u either ASA or Comair for next to nothing, as long as the contract with DL is not included. They could use those planes for the UAX flying that they are bidding on. I think DL would like nothing better than to unload either one of these carriers, and the contract. This would free up more work for RJET & their 170's.

 

[AirBoard]

SkyWest will probably make an offer to buy IA as it would save face for everyone. They have been looking for the right buyout opportunity and the price is probably right at this time to suck up these guys. We have classes going non stop right now with up to 50 pilots a class, should pass 2000 pilots on the seniority list in the next month, and only talk of more pilots and FA's needed. Something is definitely up.

So let me get this straight - you guys are hiring like crazy in order to fill the seats of the IA aircrafts that you'll get if you buy us out???? You might want to allow us to fill those seats rather than throw us on the street.

 

[CRJ Driver]

It makes sense that UAL would look to potentially outsource some of its A319-sized flying given recent statements to the press about focusing on more profitable routes. The fact that Indy has the capability to provide this lift is important - and the fact that Skywest is already talking about that sized aircraft is interesting.

I am not sure that UAL would want Indy and Skywest to merge because it would reduce its bargaining leverage with the two airlines. One thing is for certain however, UAL wants Indy OUT OF THE WAY so it would be likely that it would award feed to Indy - to reduce IAD competition and restore its pricing monopoly...

The big loser in this situation could be Air Whiskey if Indy wins the feed at IAD. At the same time, Air Whisky and Skywest are both courting Northwest to be the third Airlink - this could be very interesting and not a good situation at all for Air Whiskey drivers...

Outsource A319 flying? LOL......... Never happen... heavy set from your statment you are NOT a pilot, why do you pretend to be one?

 

[KingAirKiddo]

I believe so.

If Skywest was in the market, they could p/u either ASA or Comair for next to nothing, as long as the contract with DL is not included. They could use those planes for the UAX flying that they are bidding on. I think DL would like nothing better than to unload either one of these carriers, and the contract. This would free up more work for RJET & their 170's.

That's fine...as long as we come with the airplanes. Oh wait, I forgot...your company buys only assets, NOT airlines.

 

[Heavy Set]

Outsource A319 flying? LOL......... Never happen... heavy set from your statment you are NOT a pilot, why do you pretend to be one?

Ha Ha - I'm just insightful you jacka$$. Why don't you use your brain every once and awhile... Do you think all pilots are idiots like yourself?

The UAL situation is not "normal" and competing with LCCs is not working on many routes. I was just speculating about what could happen - I don't think all A319 routes would be outsourced - but some could on low-margin routes where feed is still important to the hubs (feeding the higher-margin international traffic). Everyone knows your CRJ is not popular with passengers and its economics are not favorable in a low-fare environment. It's called thinking outside of the box - something you don't do.