Aca Buys Airbus Aircrafts

Diesel8

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Aug 19, 2002
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Press release:

Atlantic Coast Airlines Announces Order for 25 Airbus Aircraft
A319s and A320s To Be Deployed At Washington Dulles,
Providing Company’s Low-Fare Airline with Transcontinental Capability


Dulles, VA, (November 18, 2003) - Atlantic Coast Airlines, the Dulles, VA-based carrier (ACA) (NASDAQ/NM: ACAI) announced it has entered into agreements to acquire 25 Airbus A320-family aircraft, with options for additional aircraft. These efficient, passenger-friendly aircraft will form the backbone of the fleet for the company’s low-fare airline. The first of these aircraft will arrive in September 2004 and will be ready for revenue service as early as November 2004.



The company has entered into a binding memorandum of understanding with Airbus for a firm order of ten new A319 aircraft configured with 132 seats, and five new A320 aircraft configured with 156 seats, including full conversion rights. It has also entered into leasing commitments from operating lessors for ten additional A319 aircraft. Each aircraft will feature IAE V2500-A5 engines. The aircraft will be equipped in a single-class configuration, and will offer passengers a comfortable 33 inches of legroom between most rows.



Atlantic Coast Airlines Chairman and Chief Executive Officer Kerry Skeen said, “Today’s announcement represents a major step forward in our strategy to transform the company into one of the leading low-fare carriers in the industry. The addition of the Airbus aircraft to our fleet will allow us to fly coast-to-coast from our hub at Washington Dulles to serve major destinations beyond the reach of the CRJ-200. This is a key component in our plan to offer consumers in the Washington, DC area and across the country an airline with low, simple fares, excellent service and convenient schedules featuring frequent departures and flexible ticketing rules.â€



“We are pleased with the favorable economics and business terms we have achieved in this deal. By placing the order at this time we are able to take advantage of these favorable terms as well as delivery positions that are currently available, which are critical to the implementation of our low-fare strategy.†He added, “Our Board’s decision to go with Airbus aircraft was the result of an intense bidding process. The company received competitive proposals from airframe, engine, and equipment suppliers, all of whom were vying to participate in this order following their extensive review of our business plan. We believe that this agreement clearly demonstrates the confidence that Airbus and our new lessors have in our new business plan.â€



Atlantic Coast Airlines is uniquely positioned to execute its strategy to establish an independent low-fare airline. The Washington, DC metropolitan area is the fifth largest air travel market in the U.S. with more than 40 million local passengers per year. The company’s existing infrastructure will provide immediate critical mass at Dulles, and the company believes that its cost structure will allow it to operate its Airbus aircraft at competitive costs relative to other low-fare carriers. The company’s pilots have voiced their clear support for the company’s business strategy by overwhelmingly approving competitive pay scales and work rules for the operation of the these aircraft as part of their recently announced revised contract.



With 44 gates, 87 regional jets and a fleet that will include at least 25 Airbus jets, ACA will operate more than 325 daily departures from Dulles, offering high-frequency service to a large number of markets for both local and connecting passengers. The company’s high-utilization operation and low distribution costs will allow it to offer walk-up fares up to 70% lower than those offered today for service to and from Washington Dulles.



The company intends to implement its new independent low-cost carrier strategy as soon as its existing contract with United Airlines has been terminated. The name and branding identity for the low-fare airline will be revealed at a ceremony scheduled for Wednesday, November 19th at 2:00pm, to be held at ACA’s state-of-the-art Washington Dulles maintenance facility.



ACA currently operates as United Express and Delta Connection in the Eastern and Midwestern United States as well as Canada. On July 28, 2003, ACA announced plans to establish a new, independent low-fare airline to be based at Washington Dulles International Airport. The company currently has a fleet of 148 aircraft—including a total of 120 regional jets—and offers over 840 daily departures, serving 84 destinations. ACA employs approximately 4,600 aviation professionals.



The common stock of parent company Atlantic Coast Airlines Holdings, Inc. is traded on the Nasdaq National Market under the symbol ACAI. For more information about ACA, visit our website at www.atlanticcoast.com.
 

tadjr

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I dont recall seeing an answer to this in anything I've heard or read so maybe someone can answer. With ACA dropping UA flights and starting its own brand, what is the status of its agreements with DL? Will they still be flying for DL or is that a done deal too?
 

Busdrvr

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Aug 20, 2002
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Glad they chose the IAE's. It will make their integration into UAL's Ted fleet much easier a year and a half from now
 

michael707767

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Aug 21, 2002
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tadjr said:
I dont recall seeing an answer to this in anything I've heard or read so maybe someone can answer. With ACA dropping UA flights and starting its own brand, what is the status of its agreements with DL? Will they still be flying for DL or is that a done deal too?
I seem to remember that the Delta pilots contract contains a provision that Delta connection cannot code share with any airline that flies aircraft larger than 50 seats (the 70 seaters at ASA and CMR being an exception). So, I wonder what will happen.
 

whlinder

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michael707767 said:
I seem to remember that the Delta pilots contract contains a provision that Delta connection cannot code share with any airline that flies aircraft larger than 50 seats (the 70 seaters at ASA and CMR being an exception). So, I wonder what will happen.
I don't know what the language in the DL pilot's contract is, but in ACA's original press release for their break up with UA, they said that:

ACA’s Delta Connection operation, based in Cincinnati and Boston, is expected to remain unaffected by any of these developments.

http://www.atlanticcoast.com/pressreleasea...03/july/728.htm

I also found this interesting from yesterday's release:

With 44 gates, 87 regional jets and a fleet that will include at least 25 Airbus jets, ACA will operate more than 325 daily departures from Dulles, offering high-frequency service to a large number of markets for both local and connecting passengers. The company’s high-utilization operation and low distribution costs will allow it to offer walk-up fares up to 70% lower than those offered today for service to and from Washington Dulles.

Right now they say they have 370 total flights in and out of IAD, so the way I read it is that they will go to 650 in and out each day. Thats quite a big build up, even if it will occur gradually.
 

michael707767

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Aug 21, 2002
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whlinder said:
I don't know what the language in the DL pilot's contract is, but in ACA's original press release for their break up with UA, they said that:
I called my source at Delta and he emailed the section in the contract to me. I promised I would not post the contract, but it seems pretty cut and dry, so unless Delta can work something out with their pilots, I think ACA will have to be dropped as a DCI carrier.
 

whlinder

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michael707767 said:
whlinder said:
I don't know what the language in the DL pilot's contract is, but in ACA's original press release for their break up with UA, they said that:
I called my source at Delta and he emailed the section in the contract to me. I promised I would not post the contract, but it seems pretty cut and dry, so unless Delta can work something out with their pilots, I think ACA will have to be dropped as a DCI carrier.
Well sounds like ACA expects there to be no problems staying as a Connection carrier, but that there will be some. Another one I thought of was that they aren't allowed to compete with DL as a UAX carrier and thus don't fly IAD-ATL; Air Whisky does that. But in their proposed route map, they are flying IAD-ATL.

I also want to know if they are going to furlough the Jetstream pilots, as I was under the impression that the entire Jetstream fleet would be grounded since ACA will have plenty of RJs from their ORD ops to use at IAD.
 

Fly

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Mar 7, 2003
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Visit site
FROM THE WEBSITE:

<<<Flight Benefits
We can promise you the world at Atlantic Coast Airlines

All active ACA employees and eligible family members fly for free on all Atlantic Coast Airlines flights, whether they are flying as Delta Connection or United Express. All personal travel is space available.

Also all active ACA employees and eligible family members fly for free anywhere United Airlines flies in their entire system and anywhere Delta Air Lines flies within the continental United States. There is also an array of travel benefits on other carriers that would allow you to get almost anywhere in the world at a reduced rate.

Each employee is also allocated companion passes on United Airlines to equal up to 26 segments at $27.50 each segment. These are stand-by tickets the employee may purchase for friends and family who are not eligible for the employees regular flight benefits. >>



Surprising that they actually put this on their website since these benefits will be gone in no time.
 
ACA originally expected to remain as a Delta Connection carrier, since there's nothing in their Delta Connection agreement that prohibits what they're doing. However, after making their announcement, Delta told them that Delta's pilots agreement forbids Delta from codesharing with a Delta Connection carrier that operates aircraft with more than 70 seats. ACA's Delta Connection agreement allows Delta to cancel the agreement with 90 days notice, however, ACA can then force Delta to purchase and/or assume the leases for its 328JET aircraft. This appears likely to happen if Delta cannot reach an agreement with its pilots; the 328JETs will then presumably be placed with ASA or Comair.
 

michael707767

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Aug 21, 2002
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Out of curiosity, no matter what their pilots contract says, why would Delta want to continue a code share with ACA? I mean, the ACA LCC will be competing with mainline Delta and against Song. The ACA RJs will be competing against DCI? Why would you want to continue an arrangement which helps add money to your competitor? I really don't get it.
 

RDUSWF

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Aug 30, 2002
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I wish them the best and hope they come to RDU. We need more LCC service here, so that it can keep the Big "overpriced" Boys in check.