Independence Air
- Thread starter AnalyzeThis
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Hopefully this is due to the transition out of UAExpress into INDY Air. New markets take time to build up a base of customers and there were a lot of new markets entered in a very short period of time. Just my thoughts........
..or....it can just be poor decisions on markets. Just b/c there is little competition doesn't mean that there is demand.
Ch. 12:
I couldn't agree more. The market selection is ok (fairly obvious, if you ask me), the problem for I Air (as we have discussed before) is this... At their frequency levels, they are adding too many seats for the local demand (spoke to Dulles). (Let's face it, if Lansing-Washington market warrented 350 seats/day (7RJ at 50 seats), UAIR or NWAC would have been flying nonstop 2-3x/day already. The market just isn't that big.) Therefore, they must sell connections, which are inherently less profitable.
They issued a press release this week or last (did not appear on Yahoo, but on their website) announcing A319's IAD-TPA/MCO, but they also announced MCO/TPA-TYS/CAE/CHS/RDU/GSO/HSV 2x each on CRJ's. Presumably, they will pull out frequencies from the IAD hub. This is probably the right move, and I suspect we may see more of this... I called this before they announced MCO-CAE/TYS (page 2 of this thread).
I couldn't agree more. The market selection is ok (fairly obvious, if you ask me), the problem for I Air (as we have discussed before) is this... At their frequency levels, they are adding too many seats for the local demand (spoke to Dulles). (Let's face it, if Lansing-Washington market warrented 350 seats/day (7RJ at 50 seats), UAIR or NWAC would have been flying nonstop 2-3x/day already. The market just isn't that big.) Therefore, they must sell connections, which are inherently less profitable.
They issued a press release this week or last (did not appear on Yahoo, but on their website) announcing A319's IAD-TPA/MCO, but they also announced MCO/TPA-TYS/CAE/CHS/RDU/GSO/HSV 2x each on CRJ's. Presumably, they will pull out frequencies from the IAD hub. This is probably the right move, and I suspect we may see more of this... I called this before they announced MCO-CAE/TYS (page 2 of this thread).
Ch. 12 said:
Well, Indy's got a ton of cash, so they can easily weather this. It's clear that the legacy airlines, particularly Delta, aren't going to make it easy for Indy. But by next summer, I think they'll be pretty close to break even, or maybe even profitable. Could be much sooner if US Airways stops flying (which I think could happen after the holidays).
motnot said:
I wasn't aware that they had that much cash. No matter how much cash you have, though, you won't last long when you burnt through $41M last quarter and are probably going to burn through much more for the quarter ending 9/30.
And I still stand by my statements that their entire route network and connecting traffic business plan is not a profitable or even break even model so....I don't see break even next summer unless they make some drastic changes soon.
I would think that if things were going well that Indy Air would be trying to pick up the rjs that are now available due to USAirways financial problems.
coolflyingfool said:
RJ's aren't the answer no matter where they come from. The are just tooooo expensive to operate in a LCC model!!!! The cost of operation between a 737-300 or an A319 and a CRJ is minimal at best.....RJ's have made money for ACA/Indy Air in the past because it was fee by departure...More RJ's for Indy Air would lesson their chances of survival!
I agree that RJs aren't the answer. If DH could magically swap their CRJs for other types of RJs, I bet they would swap at least some of them, as the economics on an E170 or 190 or a Dash 8-Q400 have to be better for their model than the CRJ.
USAir757
Veteran
Thay may be true, but who is going to swap E170/190s for CRJ's? I think Indy is more hell bent on making their plan work for now, that they're not going to make large changes in format now, especially one that is going to add another type without taking another away. Costs too much money that they're really going to need later.
USAir757 said:
Sounds vaguely familiar to other, non-industry arenas right now...
try to force a plan to work no matter how disastrous it really is.
There comes a point (maybe 45% LFs) when one has to swallow pride and give up a plan to pursue one that actually has positive potential. Pride can only hurt...it never helps.
USAir757
Veteran
I'm assuming you are attempting to relate the Independance Air situation to your political point of view? And if that is the case, then you should check what you say, as pride is something that we all need, and should have for our country. It cannot "only hurt", as you say.
Back to the thread....
I agree that the RJ-based LCC is one that has little chance of survival in this market. But it is something they are trying to make work, and apparently they have the cash to make a good go at it to make it work. It would be great if they could pick up some of US's non-deliverables, but it doesn't seem like it would be good for their cash flow situation until they penetrate the market some more.
One big problem with Indy Air is that they do not list their flights in res systems. Therefore, many corporate travel offices will only see the UA or US flights and thus book those, especially since UA and US match the fares anyway.
USAir757
Veteran
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