Dav8tor
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United Formally Drops Atlantic Coast
By DAVE CARPENTER
.c The Associated Press
CHICAGO (AP) - United Airlines is switching regional carriers for its United Express flights out of Washington's Dulles International Airport, announcing Monday it has settled a dispute with longtime partner Atlantic Coast Airlines and is replacing it with three other small airlines.
The agreement clears the way for a summer launch of the nation's newest low-fare carrier. Atlantic Coast plans to operate out of Dulles as a low-fare carrier named Independence Air, flying to still-unidentified destinations in Florida, the Midwest and West Coast.
For United, the agreement removes another obstacle to its planned exit from Chapter 11 bankruptcy protection later this year and resolves uncertainty about flights out of Dulles, one of its five U.S. hubs.
Its new partners at Dulles will be Chautauqua Airlines, Republic Airlines and Shuttle America, which also will operate some United Express flights out of United's largest hub at O'Hare International Airport, near Chicago.
Shuttle America is part of the US Airways Express system. Chautauqua and Republic, which are owned by Indianapolis-based Republic Airways Holdings, operate partnerships with American Airlines, Delta Air Lines and US Airways.
Existing partners Air Wisconsin, Trans States and Mesa also will fly United Express flights from O'Hare and Dulles, with SkyWest serving O'Hare as well.
``United is committed to its full schedule of flights at Dulles - a key hub for the company - and to offering customers competitive fares and superior service,'' said United executive vice president Doug Hacker.
The transition, which is expected to get final approval at an April 16 bankruptcy-court hearing, is scheduled to begin in June and continue through Aug. 5.
Dulles, Va.-based Atlantic Coast - the nation's 17th-biggest in terms of passengers - had balked at the more austere terms United tried to impose on it last year while negotiating the regional partnership as part of its cost-cutting.
It ultimately accused the much bigger airline in a lawsuit last fall of being a silent partner in a hostile takeover bid by Phoenix-based Mesa Air Group, another of United's regional carriers.
Now, a little-known airline that currently operates as Delta Connection and United Express in the East and Midwest as well as Canada will be going it alone against both the majors like United and other discount carriers such as Southwest Airlines and JetBlue.
Standard & Poor's analyst Betsy Snyder said in a note to investors that Atlantic Coast's planned transition to an independent carrier entails significant risks.
``While the company does benefit from its large-market presence at Dulles, where there is presently no significant low-fare competition, it could find itself competing against other low-fare carriers at relatively nearby airports (e.g., Southwest Airlines Co. at Baltimore), as well as United's low-fare Ted operation at Dulles,'' Snyder said.
``In addition, there will be less stability in the company's revenues and cash flow than it enjoyed under the fee-per-departure agreement it had with United.''
The company has a fleet of 142 aircraft, most of them 50-seat regional jets. It has indicated it also expects to end its partnership with Delta.
Shares in Atlantic Coast Airlines Holdings Inc. rose 21 cents to close at $7.45 Monday on the Nasdaq Stock Market.
By DAVE CARPENTER
.c The Associated Press
CHICAGO (AP) - United Airlines is switching regional carriers for its United Express flights out of Washington's Dulles International Airport, announcing Monday it has settled a dispute with longtime partner Atlantic Coast Airlines and is replacing it with three other small airlines.
The agreement clears the way for a summer launch of the nation's newest low-fare carrier. Atlantic Coast plans to operate out of Dulles as a low-fare carrier named Independence Air, flying to still-unidentified destinations in Florida, the Midwest and West Coast.
For United, the agreement removes another obstacle to its planned exit from Chapter 11 bankruptcy protection later this year and resolves uncertainty about flights out of Dulles, one of its five U.S. hubs.
Its new partners at Dulles will be Chautauqua Airlines, Republic Airlines and Shuttle America, which also will operate some United Express flights out of United's largest hub at O'Hare International Airport, near Chicago.
Shuttle America is part of the US Airways Express system. Chautauqua and Republic, which are owned by Indianapolis-based Republic Airways Holdings, operate partnerships with American Airlines, Delta Air Lines and US Airways.
Existing partners Air Wisconsin, Trans States and Mesa also will fly United Express flights from O'Hare and Dulles, with SkyWest serving O'Hare as well.
``United is committed to its full schedule of flights at Dulles - a key hub for the company - and to offering customers competitive fares and superior service,'' said United executive vice president Doug Hacker.
The transition, which is expected to get final approval at an April 16 bankruptcy-court hearing, is scheduled to begin in June and continue through Aug. 5.
Dulles, Va.-based Atlantic Coast - the nation's 17th-biggest in terms of passengers - had balked at the more austere terms United tried to impose on it last year while negotiating the regional partnership as part of its cost-cutting.
It ultimately accused the much bigger airline in a lawsuit last fall of being a silent partner in a hostile takeover bid by Phoenix-based Mesa Air Group, another of United's regional carriers.
Now, a little-known airline that currently operates as Delta Connection and United Express in the East and Midwest as well as Canada will be going it alone against both the majors like United and other discount carriers such as Southwest Airlines and JetBlue.
Standard & Poor's analyst Betsy Snyder said in a note to investors that Atlantic Coast's planned transition to an independent carrier entails significant risks.
``While the company does benefit from its large-market presence at Dulles, where there is presently no significant low-fare competition, it could find itself competing against other low-fare carriers at relatively nearby airports (e.g., Southwest Airlines Co. at Baltimore), as well as United's low-fare Ted operation at Dulles,'' Snyder said.
``In addition, there will be less stability in the company's revenues and cash flow than it enjoyed under the fee-per-departure agreement it had with United.''
The company has a fleet of 142 aircraft, most of them 50-seat regional jets. It has indicated it also expects to end its partnership with Delta.
Shares in Atlantic Coast Airlines Holdings Inc. rose 21 cents to close at $7.45 Monday on the Nasdaq Stock Market.
