New LCC announced from PIT

[Ty Webb]

Could this be the Virgin USA deal?

http://biz.yahoo.com/prnews/031014/cltu022_1.html

You'd think they could have tapped someone other than a "founder of America West", like maybe a "founder of an airline that has made more than ten cents in the past 20 years"!

Also, the timing of the deal is pretty humorous, only days after USAirways agreed not to leave PIT.

 

[bladeusa]

maybe this is where DALs former future 737's are headed to

 

[FDJ2]

Boyd Group

Hot Flash - October 13, 2003

Pittsburgh - Unpleasant Options

The future of Pittsburgh is up in the air.

Eventually, however, gravity will take over. And one thing is certain: under almost any scenario, Pittsburgh is going to have a lot fewer people wearing out the concourse carpets in the future. The days of PIT experiencing nearly 10 million enplanements are not likely to return anytime soon.

Great Airport. But A Shrinking Airline Industry. Pittsburgh International is arguably one of the best facilities in the nation. But it takes an airline, not bricks and mortar, to make an airport a hub. Right now, the nation's a little short on airlines, and it's even shorter on airlines that want to open a major hubsite operation. If US Airways yanks its hub at PIT, the chances of seeing another carrier come in and establish a hub serving 90 to 100 markets nonstop are only slightly higher than Hillary Clinton sending Rush Limbaugh a get-well card.

It's time for the circus to stop and hard realities to be considered. No matter how much huffing and puffing comes from various senators, congressmen, governors and the rest of the political cast of thousands, this is an issue of economics, not civic hubris. It makes no difference how many "extensive analyses" are done, outlining in glorious detail and colorful pictographs the traffic patterns and the great economy of Western Pennsylvania. That won't do diddly to attract another hubbing airline. Nor will it expand the number of target airlines to which the airport will need to see about increasing service - something that's clear without spending tens of thousands on grandiose coffee-table studies. Those things are simply distractions from facing the music: gaining another large hub operation at PIT is a lost cause. Some replacement service to some large markets, yes. A big hub, no. To tell the County anything different, as some are doing, is the intellectual equivalent of telling fairy tales.

No Hub - A Lot Fewer Nonstop Destinations. The structure of the airline industry points without doubt to PIT at best being a smaller US Airways hub. At worst, if one can call it that, Pittsburgh International will settle down to around 4.8 million enplanements.

What needs to be understood is that without a connecting hub operation, Pittsburgh can only support nonstop service to somewhere between 25 and 30 big markets. Beyond that, it gets real dicey.

A simple glance at the US Airways service pattern just in the Northeast gives a pretty good idea of what to expect should Allegheny County and the airline fail to come to terms. Other than hubs at CVG and CLE, service in the Northeast and Mid-Atlantic will pretty much be relegated to the large East Coast cities. Forget service to mid-size commercial centers such as ALB, BUF, BDL, and CMH. Without the cross-feed of a large connecting hub operation, there simply is not enough traffic to support such service at PIT. Not to mention the fact that there likely isn't an airline that would apply assets to such O&D markets.

Then take a look at the smaller communities that depend on US Airways' hub for access to the rest of the air transportation system. If US Airways closes down PIT, these places are in deep yogurt. Airports in places like Parkersburg and Johnstown can look forward to a great future as GA facilities, because other hubbing airlines won't get near them. The economics simply don't work.

Options. The crux of the current matter is airport costs. US Airways wants them down. The County apparently has minimal wiggle room in this regard - they built the right airport in the right place with the right plan in 1992. Unfortunately, the world and the airline industry have changed. Something has to give. This boils down to the following scenarios:

Agreement With US Airways. This is the best outcome. Cutting to the bottom line, if the County has to take a haircut over the cost of PIT, it's better to do it by retaining the US Airways hub than losing it. If the hub goes, so does the connecting traffic that helps keep per-passenger costs down.

US Airways Pulls Down Hub. First, that won't do much for the per-passenger costs of the facility, making replacement service tougher to recruit. Furthermore, the economic impact to the region will be very unpleasant. Here's a simple rule that some folks may be missing: having a hubbing operation is good. Losing it is bad.

Replacement Hub. Not in the cards, particularly one with 100+ nonstop destinations. There isn't an airline with the billions - yes, billions - necessary establish such an operation at Pittsburgh. But bad advice is in full supply in this regard. One silly analyst told the city something to the effect that nobody can predict with certainty that another big hub wouldn't be established at Pittsburgh. Right. That's also true about a meteor strike.

Entry of Low Fare Carriers. Without question, this would happen to some extent to fill the US Airways vacuum. But it isn't a panacea. True, in the absence of US Airways' hub, Southwest could consider PIT. But if the per-passenger costs are $7 bucks or even higher, it's possible that the carrier will take a pass. Other low-fare carriers may well add service, with or without a US Airways hub reduction. But it will be predominantly to large destinations, such as DFW, IAH, MCO, NYC, and PHX, most of which in any case will retain service from other carriers. In short, entry of low fare carriers will tend to depress yields, and could deter additional access to major carrier hubsites. Low fare carriers won't take risks to serve secondary markets from PIT, and they won't materially increase the number of nonstop destinations, either. And don't look for any connecting traffic over PIT generated by these carriers. The large city-pairs they might serve over PIT are mostly already served with a host of other low-fare service, including nonstops. Midway tried that with a hub at RDU. It put the carrier right into the tank.

Bottom Line - It's US Airways, Or It's Less Access To The World. This situation is not the "fault" of anyone. It's simply an outcome of a shrinking airline industry. As unpleasant as it might be, there are not many options open to Pittsburgh at this point. It's clear that US Airways wants to keep its hubbing operations at the airport, albeit a smaller one than seen in the past. In that regard, Pittsburgh is lucky.

 

[Ty Webb]

Bet the author of that article soiled himself when the announcement was made . . . one day after his article proclaimed it an impossibility that anyone would ever hub at PIT.


Too Funny.

 

[fracflyer]

Where do we apply?

 

[General Lee]

The new airline founder is Ed Beauvais, the guys who started America West and then Western Pacific----based in COS. He does know how to start up new airlines, but then runs them into the ground. He was kicked out of America West when they first went into Chap 11, and he ran West PAC into the ground also.....Good luck.

Bye Bye--General Lee

 

[AA717driver]

I think WestPac went awry when they hired ex-TWA CFO Peiser. Yeah, lets move up to DIA. What a good idea. HEY UNITED! PTHHHHH!

Virgin said they will hub from somewhere they already fly. Who knows...?TC

 

[Flying Freddie]

At Little Big Horn General Custer told his troops to not take any prisoners!

 

[mach none]

I think WestPac went awry when they hired ex-TWA CFO Peiser. Yeah, lets move up to DIA. What a good idea. HEY UNITED! PTHHHHH!

Virgin said they will hub from somewhere they already fly. Who knows...?TC

It went like this...hire Peiser, and then lets attempt to buy frontier and move to DIA at the same time. Talk about pi$$ing away money. WestPac was a good place without adequate management. Sounds like a lot of the industry though

 

[FDJ2]

Bet the author of that article soiled himself when the announcement was made . . . one day after his article proclaimed it an impossibility that anyone would ever hub at PIT.

Too Funny.

The author never said it was an impossibility. Reread what the author said with regards to LCCs in PIT.

"Entry of Low Fare Carriers. Without question, this would happen to some extent to fill the US Airways vacuum. But it isn't a panacea. True, in the absence of US Airways' hub, Southwest could consider PIT. But if the per-passenger costs are $7 bucks or even higher, it's possible that the carrier will take a pass. Other low-fare carriers may well add service, with or without a US Airways hub reduction. But it will be predominantly to large destinations, such as DFW, IAH, MCO, NYC, and PHX, most of which in any case will retain service from other carriers. In short, entry of low fare carriers will tend to depress yields, and could deter additional access to major carrier hubsites. Low fare carriers won't take risks to serve secondary markets from PIT, and they won't materially increase the number of nonstop destinations, either. And don't look for any connecting traffic over PIT generated by these carriers. The large city-pairs they might serve over PIT are mostly already served with a host of other low-fare service, including nonstops. Midway tried that with a hub at RDU. It put the carrier right into the tank."

 

[lowecur]

Beauvais

He has been in CNY for the past 5 years trying to start up Northern Airlines. He said he had raised about $40M, but nobody really believed him. It's possible some investors in Pitt were willing to back him, because of the uncertainty of US Airways. He is not mentioning where the money is coming from.

Read the last few paragraphs of this new story, and it sounds just like the Pitt story. I'll believe it when I see it.

http://www.mda-cny.com/content/news.aspx?NewsItemID=70

 

[Ty Webb]

Originally posted by FDJ2 :

The author never said it was an impossibility. Reread what the author said with regards to LCCs in PIT.


The whole premise of his "piece" is basically that it will be a cold day in Honduras, FDJ2.

Read on:


Right now, the nation's a little short on airlines, and it's even shorter on airlines that want to open a major hubsite operation. If US Airways yanks its hub at PIT, the chances of seeing another carrier come in and establish a hub serving 90 to 100 markets nonstop are only slightly higher than Hillary Clinton sending Rush Limbaugh a get-well card.

I guess it's a matter of interpretation, and I still think his pants are at the cleaners. . . . but I guess he and his dry cleaner are the only ones that know for sure.

Welcome back, FDJ.

 

[blzr]

I think that guy is Dave Siegal on here to sway opinion. And, yes, I believe that most of his trousers have been soiled after taking the TIGER, that is U.S. Air, by the tail.

Great read, by the way. Would be a wonderful editorial piece. Heck, It would take two, maybe three trips to the john for most people to finish it.

 

[enigma]

What happened, did Beauvais' kids need another million dollar a year job?



enigma

 

[FDJ2]

[QUOTEThe whole premise of his "piece" is basically that it will be a cold day in Honduras, FDJ2.

Read on:


Right now, the nation's a little short on airlines, and it's even shorter on airlines that want to open a major hubsite operation. If US Airways yanks its hub at PIT, the chances of seeing another carrier come in and establish a hub serving 90 to 100 markets nonstop are only slightly higher than Hillary Clinton sending Rush Limbaugh a get-well card.

Ty, this new Low Fare Airline does not plan on serving 90-100 markets, but rather 39. In which case it would be very consistant with the Boyd Group.

Officials from a new, low-fare airline, presently operating under the working name "Project Roam," today announced the details of a plan that calls for the company to be headquartered in Pittsburgh and within five years serve 39 major destinations

Just as matter of disclosure, I'm not FDJ (FlyDeltaJets), or even related to FDJ. I apologize if my log on of FDJ2 has caused that confusion.

 

[bigsky]

Does Virgin fly to PIT? This airline sounds to be exactly what Branson has been saying- same airplane, entertainment system, same start up date...... however I cant picture Mr Media -Branson , not stealing the spotlight if this was his baby

 

[General Lee]

No. And I don't know if Branson would start a new airline with Beauvais.

Bye Bye--General Lee