USA 3000 fold too?

[NEDude]

No news here. We are downsizing for the summer and closing EWR officially at the end of April - the last scheduled EWR flights are Sunday 4/6 - this was all planned last fall. Also "Shenequa" is leaving the fleet permanently on 4/6 and being shipped to Siberia - literally.

Being owned by Apple Vacations, and having a bunch of people booked on Apple packages, and Apple currently growing, makes me think if we do go ever go out of business, it will not happen overnight, that it will be planned at least a few months in advance.

But I have have been wrong before...once.

 

[jmreii]

Even in a recession/depression people still take vacations. Now they tend to be a little more price sensitive. Instead of going to UA/AA for the vacation now they seek out the tour wholeseller (such a Apple Vacations) and the package pricing.
I was in that segment of this biz for several yrs and that is how it tends to operate.

people have a tendency to stay close to home

 

[Max Powers]

Even in a recession/depression people still take vacations. Now they tend to be a little more price sensitive. Instead of going to UA/AA for the vacation now they seek out the tour wholeseller (such a Apple Vacations) and the package pricing.
I was in that segment of this biz for several yrs and that is how it tends to operate.

Yea thats why Sun Country and Champion are doing so well..

 

[NEDude]

USA 3000 did most of its growth during the travel downturn on '01-'03. Apple Vacations did a lot of growing during that timeframe as well.

The other thing is USA 3000 was born out high ticket prices and a desire to "control" the product.

With Apple's current massive growth (a lot of hotels coming on line in the next year or two) coupled with a loss of charter lift, and increased ticket prices, this may in the long run benefit USA 3000.

According to the 'experts' who supposedly know about this stuff, when the economy turns down, people tend to look more at stuff like a four day all-inclusive package as opposed to a weeklong trip to Florida and some of the other more traditional types of vacations.

I don't have a crystal ball or any inside information. But I do get the feeling, as I said before, that if USA 3000 were to end up going out of business, that it would be a planned phase out, not an un-announced shutdown. Apple certainly would not want to strand their customers suddenly.

 

[Thedude]

Yea thats why Sun Country and Champion are doing so well..

That just shows me you know nothing.

Sun Country was doing very well until the decided to go as a sked carrier. NWA did not like that and decided to drop the hammer on them with the purchase of Champion. NWA started to sick MG on Spirit until MLT Vacations screwed the pooch outta DTW. By flying to 8 different markets that Spirit flew to, but forgot to advertise and didn't tell the traveling public. I heard an entire dept was fired over that one. Kinda hard to make money when flying empty airplanes but of course the loads started to pick up right as the season was over.

Sun Country has a history of seasonal furloughs. They just haven't done it in about 3 years.

Champion is going away because NWA is done with them. I said that almost 3 yrs ago. The NBA contract is up for renewal and NWA has the VIP-Airbuses ready. Not to mention MG was turing away all flying except for MLT. Makes that an easy flying transfer back to NWA. It was all planned more than two years ago.

 

[Bavarian Chef]

Sun Country has a history of seasonal furloughs. They just haven't done it in about 3 years.

And that makes it a) a rational business model and 2) defensible?

Seasonal pilots kinda like holiday box throwers at FedEx or Christmas belt cinchers at the Gap? We are talking about a profession responsible for the safe passage of gajillions of people each year, right?

Who in their right mind would want to work at an "airline" that has "seasonal furloughs", much less fly on one?

Wait a minute, I get it -- my child's summer vacation is just the result of a "seasonal furlough". It all makes perfect sense now.

 

[Thedude]

And that makes it a) a rational business model and 2) defensible?

I am not defending the practice. I am just telling you what they do and they aren't the only carrier that does that either.

Who in their right mind would want to work at an "airline" that has "seasonal furloughs", much less fly on one?

That is part of the reason I didn't accept a job there back in '99. Alot of people in the MSP area fly Sun Country every year.

 

[Wino]

The economic case for USA3000 simply doesn't exist anymore, nor does it for MOST of the charter carriers now, and that is what we are seeing in the market place.

In 2000 When USA3000 was dreamed up, Apple had a lot of trouble getting its pax to places like La Romana and Punta Cana and various places in Mexico.

They used to hire a lot of contract carriers to do that flying for them (think Ryan and Transmeridian) The large network carriers basically shunned that sort of flying.

When I was based in NY for USA3000 I thought we were losing the flying to North American, but I was quite wrong. The flying out of Kennedy was lost to American Airlines, and Newark was lost to continental airlines.

American sends 267 seat A300s to punta Cana and cancun at 900 am on Sat and Sun (switiching to 757s and 737s for the summer when the demand slows down). Everyone was getting off the plane with Apple bag tags. (I just flew that trip 2 weeks ago)

Continental does similar things out of Newark now.

Those services did not exist before about 2004 when the domestic carriers started redeploying their fleets into the carribean.

And I hate to admit it, but the passengers prefer flying on American. 3 simple reasons. first it leaves at a more "civilized" time of day (later show on first day of vacation, leave hotel at more reasonable hour on last day). 2nd (and this is actually much more important thanf anyone realizes) frequent flyer miles. It doesn't matter if the actual service on the aircraft is crap, that is actually the least important part of the travel experience. 3rd And Last, Apple has a wide range of resorts including "Upscale". If you can afford to stay at the Riu Palace at retail prices you would probably be able to afford first class and would infact WANT to pay for it. AA has first class, USA3000 doesn't.

Back in my Ryan days one contract we had went from Cincinati to Brussles with an A320 with 56 seats in it for proctor and gamble and GE. You know what? We lost that service back to delta. The execs would rather fly coach with a "chance" of upgrade from Cincinati to Atlanta to Amsterdamn to brussles at inconvienient times so that they could collect the frequent flier miles than have a personally scheduled private jet with all first class service that had no frequent flier miles. It boggled the mind.

And Apple has the same problem when they charter pax aircraft. Instead they can just block buy seats on AA, UA, CO, NW etc, at what is now a competitive rate AND the pax get frequent flier miles (or in somecases use credit card miles to partially offset the price of the vacation).

BTW I was saying this all the way back in 2004 as soon as I saw how the majors were realigning their fleets. The age of the charter carrier was now in decline. Sadly I was right.

USA3000 could never afford to fly their aircraft in a pax friendly scheduling manner. They HAVE to get 2 turns a day out of them to pay the mortgage which runs whether the plane flies or not. So the early trip will be too early and the late trip will be 2 late.

The Majors on the other hand fly their fleets hard on the weekdays and not so much on the weekend and can use their spare aircraft for 1 turn on Sat and 1 turn on Sunday that will leave at a better hour.

USA3000 Might do better with OLDER less fuel efficient aircraft that had no mortgage, because then you could afford to fly them each only a couple of turns per week, and they wouldn't cost you any money while they are sitting on the ground (think allegiant)

Cheers
Wino

PS my prediction for the next base to close is Philly as more flying is shifted to USAir. Angus built that airline on the basis that USAir was going out of business and that aint happening anytime soon

 

[BlueSurfer]

I sure hope no one else fails...

But that was very informative and insightful info that you just provided Wino concerning charter flying... it's nice to be able to read thoughtful stuff like this on FI...

Thanks

 

[brokedash]

Does anyone remember Trans Mediterrian or Meridian Airways. There business model was doing contract work for vacation companies, and they just folded in the middle of the night a couple of years back.