American Airlines & Republic Airlines Swap

Discussion in 'American Airlines' started by Ronin, Oct 30, 2012.

  1. Ronin

    Ronin Member

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    This article is old but has anyone given any thought to this scenario. It might be better than US Airways....



    http://www.businessweek.com/ap/2012-09-05/republic-aims-for-americans-regional-flights
    NEW YORK (AP) — In a story Sept. 5 about Republic Airways Holdings Inc., The Associated Press reported erroneously the company's options for its Frontier Airlines unit. Republic hopes to divest Frontier in the first half of 2013 by spinning it off through an initial public offering, selling it to another airline or selling it to a private equity firm. Republic has no intention of carving up Frontier and selling its assets separately.
    A corrected version of the story is below:
    Republic aims for American's regional flights
    Republic Airways hopes to take over regional flights from American Eagle as AMR restructures
    By SCOTT MAYEROWITZ
    AP Airlines Writer
    NEW YORK (AP) — Regional airline Republic Airways hopes to take advantage of American Airline's bankruptcy and pick up some flying on behalf of the carrier.
    Tuesday night, a federal bankruptcy judge terminated the union contract of pilots working for AMR Corp., the parent company of American and its regional airline American Eagle.
    "We think last night's ruling is a beneficial one for us," Timothy Dooley, chief financial officer of Republic Airways Holdings Inc. said at a Dahlman Rose & Co. transportation conference Wednesday.
    Republic currently operates 15, 44-seat airplanes for American out of Chicago. It also operates express flights for United Continental Holdings Inc., US Airways Group Inc. and Delta Air Lines.
    Republic is assuming that American will either spin off, liquidate or shrink American Eagle as part of its restructuring.
    Dooley said American could be looking for as many as 250 planes with 76 to 80 seats, configured in two classes. He said it will take more than one regional airline to fill that need and he hopes Republic will be one of those providers.
    Republic also owns Frontier Airlines. Dooley reiterated the company's plans to divest Frontier, "most likely in the first half of 2013." He said Republic could spin Frontier off through an initial public offering, sell it to another airline, sell it to a private equity firm or go with some combination of those options.
     
  2. jimntx

    jimntx Veteran

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    Without knowing too many of the details, it seems to me that the company is trying to move toward the long-held ideal of moving most domestic flying to AE (or other provider), and mainline concentrating on International and major hub-to-hub domestic. Sounds to me like the company is trying to include some substantial airplanes under the title, Regional Jet.

    There are a number of substantial non-hub stations where the frequent flyers would rather go to another airline than start every trip on an rj flying to a hub. More business opportunities for WN. I think that the AMR executives and BOD must have major WN stock holdings. They seemed determined to build up WN while shrinking AA.
     
  3. eolesen

    eolesen Veteran

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    It it really a long-held idea, or just a long-held theory on the part of unionists?

    Seriously, look at the current schedule of AA, and what percentage of their ASM's are domestic vs. international.

    It's currently close to a 60/40 split by ASM's (driven by the larger aircraft and stage length), and if you look at the current discussions with the pilots, regional ASMs would be capped at no more than 50% of AA's ASM's (and no, that doesn't mean they can operate half the service... they could operate up to 33.333% of the service).

    For AA to grow the regional presence, they still have to maintain some significant domestic presence. The math doesn't work otherwise.

    I agree that a traditional CRJ or ERJ is purgatory compared to mainline service, but it's a different story when you start talking about the larger Embraer's and E175 and E195. I was on one and thought for a second I was on a F-100.

    My guess is that if there were an agreement on that order, you'd see AA moving into markets where they're not already in or had pulled out of because the F100's were parked and <50 seaters didn't cover their costs. Maybe a few more long-thin routes where the smaller RJ's were too painful.
     
  4. FWAAA

    FWAAA Veteran

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    Having looked at the details extensively, the company is merely attempting to fly as many large two-class RJs as DL and US (as a percentage of the mainline fleet). The bankruptcy judge found that AA's demands were reasonable and necessary to AA's successful reorganization. At the end of 2011, DL had just over 700 mainline planes and was flying 254 large 2-class RJs. DL's pilots just agreed a few months back to another 75 large 2-class RJs on top of the 254 currently flown. At the end of 2011, AA had just over 600 mainline planes and flew just 47 large 2-class RJs.

    That's not accurate. At many of these spokes, the choices have been limited to RJs for the better part of the past decade and the only improvement many of these cities have seen is that some airlines are now flying larger 2-class RJs like the E170/175/190 or the CRJ700/900 while AA still flies single-class 37-50 seaters. Even big-money cities like SBA or MRY, which primarily see nothing but RJs. With just 47 of them to go around at AA, not every departure from these high-dollar spokes can be flown with 2-class 70 seaters, which would be the ideal plane.

    Other cities like IND see an awful lot of RJs these days, the majority of them being 2-class RJs from UA, DL or US, all of which have a significant presence at IND. DL now flies several nonstops each day IND-LGA on 2-class RJs.

    If an IND passenger is flying to MCI, it wouldn't matter what equipment AA or UA operated to ORD, that passenger will likely choose WN with the nonstop service. But if their destination is somewhere WN doesn't fly (like Europe, S America, Asia or Australia), then they're going to fly UA, DL or AA via whatever hub is offered, as starting their trip on WN just isn't practical. By the way, WN is ending its IND-MDW flights, leaving UA and AA as the way to fly IND to CHI. WN doesn't exactly fly everywhere yet.

    A lot of AA employees forget that WN is not AA's primary or only competitor. UA and DL are the primary competition, and to effectively compete, AA has to enjoy the same lattitude to run its business that UA and DL management possess. By becoming mired in the details of the number of RJs, the number of seats and the weight of permitted large RJs, the pilots are again attempting to micro-manage a business about which they are experts in just one area (flying the plane) while the management at DFW ostensibly knows more about running the entire business and competing with UA and DL. The common refrain from rank and file employees is that management failed to make AA a success, all the while refusing to give management the flexibility to meet the competition. The bankruptcy court recognized that arrogance, and ruled that AA's large RJ demands were reasonable.

    Prior to the bankruptcy filing, AA offered to place all new large RJs (more than 50 seats) as mainline planes, and that proposal was rejected. AA then filed for Ch 11 and made much larger demands on scope, which were rejected. AA then relaxed its scope demands in the LBFO, and that was rejected. As a result, the bankruptcy judge abrogated the pilot contract and paved the way for AA to impose terms. And now, the pilots can't reach agreement because of their demands on scope? Appears that denial continues to persist in some employee groups.

    About WN stock: Don't know if you've followed it, but it's worth only about half of what it was worth a decade ago. It's not been a good decade for investors of LUV.
     
  5. jimntx

    jimntx Veteran

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    Oh? And what 's AMR stock worth? You can single out all the rj-already stations you want to prove how wonderful AA mgt is. However, I am on mainline flights to non -hub stations every week. I KNOW what the frequent flyers are saying to me. I KNOW what they are saying about the lack of amenities (such as decent meals) on AA. I just worked a 2 hour, 40minute flight MIA -YYZ. I served a nut ramekin full of bean dip accompanied by a bag of pita chips or a "beef roll " sliced so thin (2 slices) you could have used it for a window pane. The EXPs were mot amused.
     
  6. jimntx

    jimntx Veteran

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    That was supposed to be "not " amused.
     
  7. 777 / 767 / 757 Love

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    Really? This is one EXP that flies mostly international and doesn't have a bug up my ass about a stupid meal on a 2hr flight.....and believe me, AAdvantage program is so much better that the EXP continue to grow in number saw other top tiers leave other programs. Bottom line, AE flight of 2 hours never bothers me, whether I'm up front or in back.

    Cheers,
    777 / 767 / 757
     
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  8. jimntx

    jimntx Veteran

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    Well, bully for you. There are a lot of EXPs that fly almost exclusively domestic, and they ARE concerned about service and amenities on domestic flights. But, Thank you for demonstrating just another example of rank selfishness and self-centeredness. Its all about you, isn't it?
     
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  9. FWAAA

    FWAAA Veteran

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    I'm not sure I understand what a lousy meal on a 738 has to do with expanding the number of AA-marketed large 2-class RJs.

    Like many changes at AA over the past year, AA isn't breaking new ground, despite claims to the contrary by many employees. DL flies more than 250 large 2-class RJs, and AA's relaxed scope clause will permit AA to match DL's flexibility.

    No doubt the FAs hear from whiners, even whiners possessing EXP status, about what they would do better if they were in charge. Nevertheless, UA, DL and US all fly many more high-revenue passengers on their large 2-class RJs than does AA.
     
  10. Bob Owens

    Bob Owens Veteran

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    That would be a plus for Line maint, not too many that wouldnt want to get an opportunity to work for WN over AA. Let WN grow, the more the better!! I would just love to see them put MX in ISP!! AA would lose their most motivated talented workers as many mechanics live closer to ISP than to either JFK or LGA. add in WN's better Wages, Pension, Health Benefits, Holidays, Vacations, Sick time, IOD time and workrules and its a no brainer. The quicker it happens the better!

    WN should make ISP a maint Hub. They would have the pick of the litter from both LGA and JFK from any carrier except UPS. As the other carriers lose their most talented mechanics and their performance deteriorates WN could move in on their Business Traveler customer base at LGA. There really isnt much of a reason for mechanics to stay with AA or hope they succeed now that we lost our DB pension. Our inferior 401K plan is based on an inferior wage, you would have to have 30 years of time with AA to get as much PTO as you get with WN from day one, and at AA you top out at around $25k less a year.

    This place has no future for us, just a place to show up and collect a paycheck till we find something better. Lowest wages, worst Health Benefits, least amount of vacation, fewest Holidays, Least amount of sick time, least amount of IOD time, worst work rules. Why wouldnt we want to see WN grow and let AA shrink? Ohh, but they employ a higher number of mechanics than any other carrier, like thats supposed to help us deal with the fact that we dont make what mechanics are supposed to make. There are more workers at Walmart than AA, should we go work for WALMART so even though we would make crappy wages we can brag that we work for a company that has more workers than any other? There isnt any value in that.

    Let AA fail completely, if WN fills the gap it would be the best thing that could happen to us.
     
  11. eolesen

    eolesen Veteran

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    Off topic perhaps, but WN only has 15 flights a day at ISP, with perhaps 4 RON's. AA has none. An AA failure would be a zero sum game for them at ISP...

    More to the point, why, pray tell, would they want to make ISP a maintenance hub? If I recall, the town is pretty dead set against growth, and has some pretty strict noise curfews which force the high number of RON's they have.

    Just a guess, but if WN were to grow ISP, they'd insist on relief from the curfew so they could reduce RON's...
     

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