spitfire1500
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Northwest to launch regional carrier in June
By Doug Cameron in Chicago
http://media.msnbc.msn.com/i/msnbc/Components/Sources/sourceFiTimes.gif Updated: 3:12 a.m. ET March 31, 2006
Northwest Airlines confirmed on Thursday that it planned to launch a new standalone subsidiary in June using regional jets flown by pilots currently on furlough.
The new unit, dubbed Compass Airlines, is a scaled-down version of Northwest's original plan to outsource much of its short-haul domestic flying, a move dropped after fierce opposition from pilots.
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The disclosure comes amid a series of beauty contests by US carriers seeking new contracts from the independent regional airlines which handle much of their shorthaul routes.
Northwest has asked its regional partners, Mesaba Airlines and Pinnacle Airlines, to rebid for their business. Continental Airlines could announce a replacement for the operator it plans to withdraw from ExpressJet as soon as next week, according to people close to the discussions.
The Houston-based carrier said in January that it would withdraw 69 of the 274 Embraer aircraft which it subleases to ExpressJet after the two failed to agree on new contract terms.
Continental and other major carriers have enjoyed a relatively harmonious relationship with the regional carriers in recent years, but the pressure to cut costs has created strains.
The large carriers typically control the aircraft and cover fuel costs, but subcontract the flying to take advantage of the lower labour costs available at the regionals, who have remained profitable through the industry downturn.
Mesa Airlines, one of the largest regional carriers, is viewed as the frontrunner to take on the additional Continental business, according to people close to the talks. Mesa, which recently expanded its flying for Delta Air Lines, declined to comment though confirmed it had bid for the Continental and Northwest contracts.
Phoenix-based Mesa's rapid expansion also saw it make abortive bids for Independence Air, a Washington-based low-cost carrier which folded in January.
Northwest has acquired the failed airline's operating licence in an effort to speed up the regulatory approval of Compass. Northwest said in a regulatory filing that it would make a decision next month on the Compass fleet between the Bombardier CRJ-900 and the Embraer EMB-175.
The inaugural service in June will be with a single aircraft.
"The expansion of Northwest's regional flying through the proposed Compass Airlines operation is an essential part of Northwest's restructuring plan," it said in a statement.
Mesa has since turned its attention to the fast-growing Hawaiian market with the launch in June of intra-island services through a new unit called go!, sparking a fare war with the two incumbents, Hawaiian Airlines and Aloha Airlines, which have both emerged as from bankruptcy protection.
Curiously, both Mesa and Northwest have chosen failed or discontinued brands for their new units. EasyJet, the UK-based low-cost carrier, acquired the British Airways-offshoot Go in 2002. Compass Airlines was a twice-failed new entrant in the Australian market which finally liquidated in 1993.
Northwest to launch regional carrier in June
By Doug Cameron in Chicago
http://media.msnbc.msn.com/i/msnbc/Components/Sources/sourceFiTimes.gif Updated: 3:12 a.m. ET March 31, 2006
Northwest Airlines confirmed on Thursday that it planned to launch a new standalone subsidiary in June using regional jets flown by pilots currently on furlough.
The new unit, dubbed Compass Airlines, is a scaled-down version of Northwest's original plan to outsource much of its short-haul domestic flying, a move dropped after fierce opposition from pilots.
Story continues below ↓ advertisement ad_dap(250,300,'&PG=NBCMSB&AP=1089');
The disclosure comes amid a series of beauty contests by US carriers seeking new contracts from the independent regional airlines which handle much of their shorthaul routes.
Northwest has asked its regional partners, Mesaba Airlines and Pinnacle Airlines, to rebid for their business. Continental Airlines could announce a replacement for the operator it plans to withdraw from ExpressJet as soon as next week, according to people close to the discussions.
The Houston-based carrier said in January that it would withdraw 69 of the 274 Embraer aircraft which it subleases to ExpressJet after the two failed to agree on new contract terms.
Continental and other major carriers have enjoyed a relatively harmonious relationship with the regional carriers in recent years, but the pressure to cut costs has created strains.
The large carriers typically control the aircraft and cover fuel costs, but subcontract the flying to take advantage of the lower labour costs available at the regionals, who have remained profitable through the industry downturn.
Mesa Airlines, one of the largest regional carriers, is viewed as the frontrunner to take on the additional Continental business, according to people close to the talks. Mesa, which recently expanded its flying for Delta Air Lines, declined to comment though confirmed it had bid for the Continental and Northwest contracts.
Phoenix-based Mesa's rapid expansion also saw it make abortive bids for Independence Air, a Washington-based low-cost carrier which folded in January.
Northwest has acquired the failed airline's operating licence in an effort to speed up the regulatory approval of Compass. Northwest said in a regulatory filing that it would make a decision next month on the Compass fleet between the Bombardier CRJ-900 and the Embraer EMB-175.
The inaugural service in June will be with a single aircraft.
"The expansion of Northwest's regional flying through the proposed Compass Airlines operation is an essential part of Northwest's restructuring plan," it said in a statement.
Mesa has since turned its attention to the fast-growing Hawaiian market with the launch in June of intra-island services through a new unit called go!, sparking a fare war with the two incumbents, Hawaiian Airlines and Aloha Airlines, which have both emerged as from bankruptcy protection.
Curiously, both Mesa and Northwest have chosen failed or discontinued brands for their new units. EasyJet, the UK-based low-cost carrier, acquired the British Airways-offshoot Go in 2002. Compass Airlines was a twice-failed new entrant in the Australian market which finally liquidated in 1993.
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