U.S. Airlines may shed regional carriers

[gOOfly]

This article surprised me. I wonder how possible this could be?
Click Here

 

[Tim47SIP]

Well Co and AMR have allready announced their plans concerning this issue, so no new news here. Delta is the one that would really surprise me. ASA/Comair are the ones making the money. If they were sold, then Delta would get less of the profit and still not be assured route stability in the event of a strike. Although it is a possibility in 5 years from now, I don't think you will see it in the next year. The article really looks like someone is writing something because they needed something to write about. But who knows. Remember, if you don't like whats going on in the industry, just wait a minute and things will change!

 

[Guest]

Being rather new to the flying aspect of the industry, I have few questions. IF what is said in the article actually happens (at any of the airlines), how would that affect the "regional"? Would there be a change in service/destinations? Changes in aircraft orders, etc.? Would marketing agreements go "out the window"?

Just curious,

NoOneReally

 

[skydiverdriver]

I think you are correct, that it's just something to write about. Financial analysts always need to say something, even if it has no facts to back it up. The first paragraph says that the airlines listed were not available for comment. In other words, the writer made it up.

I think it's funny that they always say that the Comair strike maked them re-think the owning of their regionals. Well it should, but not that this will make them sell. It should tell the majors that own regionls that they need to treat them better, and be a part of the negotiations, rather than say they are not involved and pretend that they have no part in the process. Comair pilots were not speaking to the people who had the real power, and probably would not have struck if Delta would have been streight with us.

I think Delta learned a lot from the strike, but not the fact that they shouldnt' own their most profitable division, but that they should treat them better, for everyone's benefit.

 

[Slim]

This article isn't surprising nor is the reaction.

When DAL puchased Comair, many of us questioned why DAL management wanted to incur the same headaches AMR management had with AA and AE crews. Just about all agreed that Leo Mullin purchased ASA and Comair to boost shareholder value. In addition, I believe DAL purchased Comair because there would be too much competition in CVG if Comair became an independent carrier. Personally, I wish Comair hadn't been purchased.

Now, the grievances DALPA has filed about scope violations and force majeur (sp?) and the RJDC issue(s) may be showing DAL management how complicated all this is. They may not want any part of it any more.

We see what AMR is doing to comply with/circumvent the APA scope by attempting to sell the assets of Executive Airlines. CAL may try to spin CALEX off once the market stabilizes post Sept. 11 and as the economy emerges from recession. DAL's most marketable assets may be ASA and Comair.

My question is what happens to the delivery positions ASA and Comair held prior to their purchase? Will those be retained by DAL in the event of a sale? Will a potential buyer demand those delivery positions be part of a sale? Time will tell!

Fly safe!

 

[publisher]

point

This is what I had been saying in many posts about one list and all that type of thinking.

Comair was but one recent event that impacted the decision. The tail was wagging the dog so to speak.

The situation at Eagle another. Scope diminishing the carriers ability to do what it needs to do.

The value of these subs is diminished in the business marketplace if there are a bunch of scope and union provisions in there makeup. If you are unsaleable, you have no value.

Who is going to buy a company that has a pile of restricitions on what it can do.

 

[CaptRob]

Re: point

"The situation at Eagle another. Scope diminishing the carriers ability to do what it needs to do."

Is scope diminishing Eagle or American? Who is damaged more and who came first? I work at Eagle, but I support APA's decision regarding the ASM cap limitations. Eagle flies many routes that are also flown by American aircraft, DFW-DAY is only one example. Is American holding Eagle down or is Eagle taking ASM's from American at a reduced rate? Eagle also flies from DFW to MKE, over STL and ORD, both American hubs, over 1,000 miles. Also, look at the flying in California that Reno used to do. That has been given to Eagle-LAX to OAK, PHX, ABQ. Those were all American flights.

If Eagle was still only flying "feed" to AA, the ASM cap would be fine. We are not anymore, we have become the low price airline within an airline. Who would you like to see survive? American or Eagle? Which pay scale would you rather work under?

 

[DIAMONDDD]

My goodness, CaptRob!! That was well put. You can see the light, I believe.

 

[publisher]

Nice

Nice but misses the original question....

The question is the business worth or value as an independant entity

 

[CaptRob]

Original question...

Nice but misses the original question....

The question is the business worth or value as an independant entity

Answer: Virtually none without the code-share agreements and revenue plan with American Airlines. To make money, Eagle would have to charge more than SWA for the same route. One reason why Eagle dropped RDU-Nashville. Plus having to buy the ticket separate from your AA (or Delta, Continental, Hawaiian, Northwest, Alaska or Qantas in LAX) on-line e-ticket site. Imagine Eagle having to pay retail for the gate space at those major hubs. It ain't cheap operating in the big leagues.

 

[rjcap]

Let me guess, isn't this the same analyst who endorsed Enron as a good buy ?? Analyst are a dime a dozen.

I don't know about AA or Continenetal, but Delta will not be selling ASA or Comair. Once the ASA contract is in place both ASA and Comair will grow at an unprecedented rate.

What about scope ??

Its dead dead dead dead .

 

[publisher]

q

Let me see if I can give an example that makes the correct correlation.

An airline that has contracts with American and is not restricted from flying for others is worth considerably more than one which is

A closed ended airline restricted from growth depending on what is going on at American and has contract provisions that can send people from American to it at will.

In the first, the value is marketable to others, in the second only as a valued part of American.

We will get some idea fron the sale to the public of COEX and JetBlue

 

[ifly4food]

I think Delta learned a lot from the strike, but not the fact that they shouldnt' own their most profitable division, but that they should treat them better, for everyone's benefit.

Delta learned a lot, but it wasn't to treat us better. They learned to CYA when it comes to union busting. They learned to be sure to not put all your eggs in one basket. They learned not to call a bluff if they weren't prepared for it to be real. They learned that whipsaw is the most valuable tool in union busting. They learned that a regional really CAN inflict pain on them.

They won't make the same mistakes with ASA. They will stonewall us in negotiations, move Skywest, ACA, and Comair onto our routes (already happening), and set us up for "checkmate" if we don't take concessions.

 

[publisher]

nwa

for more info, see Northwest announcement. It is starting now

 

[gOOfly]

Just noticed a more recent article at AviationNow.com

 

[darling pretty]

Since I didn't get any replies to my own thread about this disaster in the wings, anyone on this thread care to give their opinion?


What happens to the CAL guys who have displaced CALEX pilots ? Are we now talking about pilots who work for an entirely different company then leapfrogging back into CAL ?? Do the displaced CALEX guys get first crack at the new airline or are they in the mix with everyone else?

 

[CaptRob]

Re: q

An airline that has contracts with American and is not restricted from flying for others is worth considerably more than one which is

A closed ended airline restricted from growth depending on what is going on at American and has contract provisions that can send people from American to it at will.

In the first, the value is marketable to others, in the second only as a valued part of American.

This assumes Eagle, or any other wholly owned regional, has the management to stand alone. Don Carty, CEO of AMR, runs the show at Eagle. AMR provides the financial backing in terms of being able to negotiate fuel prices, gate space and aircraft leases, just to name a few of the big ticket items. Not to mention cash. I just don't think our management could do it alone.

That said, I don't believe Eagle would be spun off as long term problems would over-ride any short term benefit. Today is the last day we have 34 seats in the Saab. Starting March 1, anyone that sits in row 14 is to be considered "unruly" and will be removed from the aircraft. These kinds of "band-aids" will be used untill AA/TWA finishes recalling their pilots. Unless, of course, AE was merged into AA. <sigh>