Joe Leonard Slams Indy Air

[ngneer]

Joe Leonard of Air Tran had harsh words for Independence Air's business plan, saying that they have a "flawed business plan" and he also claims that their load factor for September was only 30%. Leonard also complained about Independence Air depressing yeilds on the East Coast.

Personally, I agree with Leonard about Independence Air having a flawed business plan. It seems to me that Midway Airlines tried the same kind of strategy - an independent airline flying mostly 50 seat RJs - and failed because they couldn't get their costs low enough using RJs. If it's true that their load factor is down to 30% for September, they aren't going to be around for long.

Joe Leonard slams Indy Air

 

[Arvada]

Joe Leonard of Air Tran had harsh words for Independence Air's business plan, saying that they have a "flawed business plan" and he also claims that their load factor for September was only 30%. Leonard also complained about Independence Air depressing yeilds on the East Coast.

Personally, I agree with Leonard about Independence Air having a flawed business plan. It seems to me that Midway Airlines tried the same kind of strategy - an independent airline flying mostly 50 seat RJs - and failed because they couldn't get their costs low enough using RJs. If it's true that their load factor is down to 30% for September, they aren't going to be around for long.

Joe Leonard slams Indy Air

[post="188675"][/post]​

Interesting how others always add their professional opinion, drawing attention away from their own failures... but watch out... FLYI has completely re-fitted their fleet of 85++ aircraft in 80 days and without a hitch!... they have the A319 coming on line in November... They are going to be a force in the East very soon. Very productive, Very On-time, Very "not" your normal airline.

and Joe..... be sure to get your facts right before you distort them...

FLYI rules!

 

[smfav8r]

Arvada,

Just remember one thing before you get toooo hyped on the FLYi rules thing. 10 years ago, the airline fomerly known as Atlantic Coast Airlines (Independence for those of you who don't remember) almost shut the doors.

Over-expansion and biting off more than they could chew was the primary reason, along with the J41 crash in CMH and a bad winter of 1993-1994. Your leader (Kerry Skeen) was at the helm then too!!!

The only reason ACA or Indy Air is still in business today, is because of the bailout from British Aerospace. They didn't want to see the launch customer of that POS J41 go out of business!!!! Skeen also got a brand new Range Rover out of the deal for the 41's.

So let's recap, shall we. Same airline, different name. Same leader. Biting off more than they can chew with expansion, aircraft, res. system etc.....the environment in the industry is overall pretty bad right now, high fuel prices and possibly a bad winter to come. I hope Indy doesn't put one in the dirt again for everyone's sake.

Could history be repeating itself....only time will tell????

 

[magsau]

SMF,

I like the way you think.

 

[funguy2]

The bottom line is that low trip costs do not offset high CASM.

Yes, it does cost less to fly a CRJ one mile than it does to fly a 737 one mile. However, you get a lot more "bang for your buck" by flying the 737. In other words, IAir will have a long-term CASM issue vs. other LCC's...

Let's have a look, shall we?

ACAI's CASM for Q2 was 19.9 cents! Yikes. Since that includes props and Do328JETS, let's cut ACAI a break and call CASM 16 cents. So, to produce one seat from IAD to ORD, a distance of 589miles, it costs IAir: $94

Now UAL has a casm of 9.83 cents, or for one seat IAD-ORD: $58.

The fact that CRJ has lower trip costs only means it should be easier for FLYI to start up, in the end, its CASM is completely uncompetitive in major markets.

 

[smfav8r]

Thanks Magsau....Indy may pull it off...who knows...ValueJet was able to re-invent themselves...but that's two different animals!!!!

The Indy folks seem to forget the time when UA was going to drop them for poor performance, and/or how close the place was to shutting the doors not that long ago. I'm sure most of the seniority list (pilots, mechs, f/a's, whatever) wasn't around during that period....(most went off to bigger and better things) BUT!!! sometimes people need a reality check!!!!

 

[markkus757]

Midway had more problems than just the RJs. When they divorced the AA frequent flyer program, they made an enemy in AA. AA gave them their start, the customer base was getting a lot of miles towards AA, and they decided that they needed to serve the markets that Midway developed once that agreement was terminated. AE did not fly the routes out of RDU until after this took place. That was the downfall of Midway. Midway made plenty of money before this on both the F100s and the CRJs that they ran. I would even guess they would have either merged or bought outright another regional player if they were still "engaged" to AA.

 

[funguy2]

Good point markkus757... Some folks around here love "revisionist history".

 

[smfav8r]

Talk about history....obviously you don't rember when Midway had A320's and was rising from the ashes of the old Midway.....the AA aliance was a secondary plot to keep the old Midway name alive....I'm not saying that they were doing well....but get your history correct......AA did not do anything for Midway but help it sustain life.....AA is just and sh*****ty part of Midway's life...get over it!!!

 

[smfav8r]

and bye the bye...

don't forget that the REAL Midway was a DC9/MD80 operation out of Chicago's Midway Airport long ago.....which is what I was reffering to about out of the ashes of the old Midway airline.....History is very important!!!!!

 

[mga707]

and bye the bye...

don't forget that the REAL Midway was a DC9/MD80 operation out of Chicago's Midway Airport long ago.....

[post="189354"][/post]​

Categorizing the 1979-1991 time period as "long ago" makes at least one of us here feel very, very old!
Seems like only yesterday...

 

[HPearlyretiree]

Yeah, but when is FlyI going to come close to filling their planes at the breakeven load factor?

 

[GrahamAF]

The bottom line is that low trip costs do not offset high CASM.

Yes, it does cost less to fly a CRJ one mile than it does to fly a 737 one mile. However, you get a lot more "bang for your buck" by flying the 737. In other words, IAir will have a long-term CASM issue vs. other LCC's...

Let's have a look, shall we?

ACAI's CASM for Q2 was 19.9 cents! Yikes. Since that includes props and Do328JETS, let's cut ACAI a break and call CASM 16 cents. So, to produce one seat from IAD to ORD, a distance of 589miles, it costs IAir: $94

Now UAL has a casm of 9.83 cents, or for one seat IAD-ORD: $58.

The fact that CRJ has lower trip costs only means it should be easier for FLYI to start up, in the end, its CASM is completely uncompetitive in major markets.

[post="189269"][/post]​

The sad part is United caused the poor performance. They had control over DH's operations at IAD and typically gave mainline UA priority with departure clearances. That didn't help DH's stats too well.

 

[sfb]

Midway had more problems than just the RJs. When they divorced the AA frequent flyer program, they made an enemy in AA.

Actually, the end of Midway's participation in AAdvantage was the other was around. AA kicked Midway out of the program largely because APA would not permit AA to continue to offer miles to Midway's frequent flyers. Midway's downfall was basically undertaking a big expansion in a weakening economy from a third-tier hub city -- especially with that city seeing increasing competition in the form of Southwest and Metrojet. And Midway was never really a low-fare carrier until their brief reincarnation in 2002.

 

[RDUSWF]

Actually, the end of Midway's participation in AAdvantage was the other was around. AA kicked Midway out of the program largely because APA would not permit AA to continue to offer miles to Midway's frequent flyers. Midway's downfall was basically undertaking a big expansion in a weakening economy from a third-tier hub city -- especially with that city seeing increasing competition in the form of Southwest and Metrojet. And Midway was never really a low-fare carrier until their brief reincarnation in 2002.

[post="189524"][/post]​

You are correct about their downfall, but you left out the biggest part and that was Robert Ferguson. As long as this industry continues to recycle useless executives you will always have examples like this. Midway was more like a hybrid between a full service (AKA Midwest Airlines) and a LCC. Their fares tended to be very reasonable and simple (lower the majors), most of the time you did not need a saturday night stay, and their service was second only to Midwest Express. They definately were on to something, as long as they would have stuck to their original business plan.