Aca Replacement

[UnitedChicago]

Just my two cents...

I think United will strike some type of short-term agreement with ACA to give it maybe an additional 6 months of UEX service which will benefit both parties.

For United it gives more time to find a solution and for ACA more time to plan for their low fare launch.

Either way (and I don't mean any disrespect to ACA folks) I don't see independance air ever making money.

 

[46Driver]

With the offer UAL gave us, ACA didn't have much choice but to go independent.

 

[Busdrvr]

With the offer UAL gave us, ACA didn't have much choice but to go independent.

Funny, but it seemed to be plenty for Air Willy, Sky west, and Mesa. I guess you are sticking to the story that you can reduce your over .17 CASM enough to be successful as an independant, but not any to be part of the network...

 

[Bear96]

With the offer UAL gave us, ACA didn't have much choice but to go independent.

There are always choices in life. Some may not be very pleasant, but they are choices nonetheless.

The hard part is, one must live with one's choices.

Good luck to you.

 

[UnitedChicago]

With the offer UAL gave us, ACA didn't have much choice but to go independent.


It has been reported and documented from ACA's CEO that he and the BOD were examining the option to go independent long before United filed ch11.

I don't think it's accurate or fair to blame United. Your CEO and BOD made a decision to transform into a low cost carrier. That was certainly not because of the deal United offered.

 

[46Driver]

Certainly, Tom Moore and Kerry Skeen were examing different options - good management should always be doing that. ACA was fortunate enough to be in an enviable spot. Dulles (I believe) is one of the largest airports (and metro areas) in the US with very limited LCC service. ACA also owns the gates and infrastructure both there and at many of the outstations (something SkyWest, Air Whisky, and Mesa don't). United was in trouble (the source of the majority of ACA's revenue) and USAir (probably our biggest competitor for markets) was in bigger trouble. Finally, it is the LCC's that are making money while the legacy carriers are in trouble. It would only be prudent to study the option of going out as an LCC using RJ's to fill a niche to cities to small for SouthWest's 737's, AirTran's 717's, etc....

The deal UAL offered ACA was for much lower margins, to assume much more of the risk, and for UAL to have the option of reducing or dropping ACA with little to no notice. The future held only whipsawing one regional against another - with BAIN's item by item accounting making the survival of our company problematic.

Each of the regionals was in a different position: SkyWest does the majority of the flying with Delta and is starting some with Continental - they spreadloaded the risk. AirWhisky (being by far the smallest) had no choice. MESA does the majority of its flying for USAir - reason enough to want a growth opportunity with another company. ACA was in a much stronger position in regards to its infrastructure and a weaker position in regards to not having another partner (the Delta side is only 15% of revenue).

At any rate, there is going to be massive change in the industry and some of our companies are not going to be around. ACA? I think we will make it although it is going to be tough - I base that upon our management's demonstrated ability to stay one step ahead of our competitors. UAL? 50-50. I think you are going to survive but leave Dulles to concentrate on the MidWest, West, and Asia. USAir? With Southwest making plans to fly into Philly and JetBlue getting EMB 170's, I don't think so USAir is going to survive.

Time will tell, and I've got to get back to my grad school studies.

 

[Busdrvr]

"United was in trouble (the source of the majority of ACA's revenue) and USAir (probably our biggest competitor for markets) was in bigger trouble."

That makes sense, go "independant" in a market that other carriers can't break even in with 1/2 to 2/3's your cost, and do it with smaller, less comfy jets.

"Finally, it is the LCC's that are making money while the legacy carriers are in trouble. It would only be prudent to study the option of going out as an LCC using RJ's to fill a niche to cities to small for SouthWest's 737's, AirTran's 717's, etc...."

Hmmm, lets see, NO airline has EVER been successful operating an independant airline centered around the RJ.... Now in Q4 we are finally seeing "cracks" in the LCC model as LCC's yields go down as at least one Hub airlines go up big.... But you think in a deteriorating LCC revenue enviroment, folks will flock to the HIGHEST COST carrier. What are these magical cities that will only support RJ traffic? How close are they to another LCC city with sub $.08 CASM jets. At your cost structure, UAL LOST BIG money on your service. Yet you will find the magic elixer, and hire yourself some otherwise unknown revenue management wiz kids who see the future is at ACA.

"to assume much more of the risk,"

as opposed to ALL the risk...

"some of our companies are not going to be around. ACA? I think we will make it although it is going to be tough - I base that upon our management's demonstrated ability to stay one step ahead of our competitors. UAL? 50-50. I think you are going to survive but leave Dulles to concentrate on the MidWest, West, and Asia. USAir? With Southwest making plans to fly into Philly and JetBlue getting EMB 170's, I don't think so USAir is going to survive."

Jet blue is getting 190's, but again, you want us to think that you will take the world by storm, coexisting with SWA, Air Tran and JB, yet U with LOWER CASMs, an international route structure and a first class cabin, will go by the wayside, and UAL, under the intense pressure of ACA's vast route network, will fold up the tent and go west?! What were ACA's revenues last year? Total RPM's. Again, ACA's flying for UAL was done at a HUGE loss. But you will take away the reputation painted on the side of the jet, the UAL network, and the guarenteed profit, and take over Dulles..... From a practical stanpoint, do you know how many US Congressman use Dulles to get home? I bet they'll be routing for you guys... :blink:

"It has been reported and documented from ACA's CEO that he and the BOD were examining the option to go independent long before United filed ch11."

I think the real story is a case of a couple guys with dillusions of granduar who are cluelessly arogant to the point of thinking they can play in a league WAY above their heads. It would be comical if not so sad. My parents had an ACA pilot move nearby and start attending the same church. This poor guy leveraged the heck out of himself to get a large house based on what these two yahoo's are doing. The net effect will be HE'LL lose his house and have to start from nothing with a wife and two young daughters, all because his management is dillusional. It's a d@mn shame. :angry:

 

[iflyjetz]

UnitedChicago, I think that it's safe to say that UAL will terminate the contract with ACA prior to emergence from chap 11. As a UAL furloughee, I'd like to thank all of those at ACA who have chosen to go it alone. I expect to be back at work a bit sooner thanks to ACA opting to commit hari kari. Busdrvr has already stated many of my thoughts on ACA's long term viability.
Here's a response that I posted on another thread to this issue (of the response that I anticipate from WHQ):

"On routes where UAL can justify upguaging to larger equipment, UAL will either have 737s or A319s to replace RJs. (This can lead to upguaging equipment throughout the system). On routes where RJs are sufficient, UAL will shuffle in another regional.
This will cause UAL to selectively upguage from RJs throughout the system in order to provide sufficient RJ coverage from the regionals.
While on the surface it may appear that ACA has left UAL short of lift capacity, that is not true. The mainline fleet is currently underutilized and by forcing UAL to upguage, it will actually increase UAL's efficiency. I expect mainline UAL's CASM to be at or below ACA's CASM. However, UAL's marginal CASM (the CASM associated with increased fleet usage) will be well below anything that ACA could touch, even if all of ACA's employees worked for free.
There are two flies in the ointment for UAL. The first will be the number of available pilots. However, UAL could easily recall pilot furloughees from the last six months and run them through short courses where they'd be back flying the line in less than a month.
The second fly in the ointment is aircraft leases. I don't have a good handle on UAL's progress so the following is merely conjecture on my part. I would assume that UAL was very disappointed at ACA's refusal to cut rates because it gives them decreased leverage on renegotiating leases. However, I would be willing to bet that UAL will resolve all leases prior to terminating ACA's contract. And both of those issues will be resolved prior to UAL emerging from chap 11. From my understanding, there are still north of 100 aircraft leases that have to be renegotiated. UAL has rejected several 777 leases, but I've read that the leassors have not been able to find a new leasee. It may be possible for UAL to return to those leassors and make the same offer; I would expect the leassors to rethink their position when they discover that there is an extremely thin market for used aircraft. "


Very few startups survive more than a few years. In ACA's case, I don't expect them to last more than a couple of years. They have the worst reputation for performance and customer service among all of UAL's regional partners. This isn't another JetBlue situation, where ACA will win over customers with great service. On the contrary, many frequent flyers of routes currently served by ACA are well aware of the dismal product that ACA delivers on behalf of United.
46Driver, how can you possibly conclude that Independence will be an LCC? Your CASM is 15 cents per ASM. On routes where demand will allow, UAL will be running A319s (or larger aircraft) On thinner routes, UAL will bring in another regional partner, perhaps AWAC or Mesa (both of which have better customer reps than ACA).

Busdrvr, you might find this link interesting; it's ACA's 'battle plan':
http://www.atlanticcoast.com/NonFlash/for_...resentation.pdf

 

[46Driver]

Go to www.mesalounge.com Read from their own pilots about what service you are getting. UAL had already dropped MESA once before.... As for MESA, Johnny O has said in the past that he wants to do what ACA has done - I would not be surprised that if USAir goes under, he buys some of the assets and starts his own LCC.

As for the CASM, its going to be interesting to see how we do. I fully expect travel banks from some of the LCC starved small cities we service to help out, I also expect that some people are going to like not having to drive an extra hour or two to Baltimore to fly Southwest when they can save the hassle and fly ACA at Dulles.

The Hari Kari quote? Hmmm, maybe Banzai would be more accurate. Either alternative (making it big or going bankrupt) is quick and preferable to the slow, cancerous death that United was offering us. UAL's attempt to have MESA try a hostile takeover wasn't pleasant either - that would have slowly ended our careers just as surely as bankruptcy. That's pretty much the attitudes of the entire pilot group at ACA. Speaking as an FO, what would I have to gain by continuing to fly for United Express??? $35k a year and no upgrades as UAL would keep us stagnant - without upgrades, there is ZERO chance to move on anywhere else as PIC time is mandatory requirement. Therefore, my (and many others here) only option is to roll the dice and Fly Independence. If it goes under, I won't have any problem finding a non-flying job that pays as much......

 

[Ukridge]

Busdrvr - Why as 46Driver maintains would United decamp from Dulles and move Westward? Although not an expert on how United plans the flights in and out of its hubs I would hazard a guess that there is quite a bit of inherant wealth in maintaining an operation from this airport. Why? Well, when I am in Washington and I arrive at Dulles for my flight back to home I must look at television screen to learn the departure gate. When I do I notice flights departing to the following cities: London, Paris, Frankfurt, Brussels, Munich, Amsterdam, Buenos Aires, Sao Paulo, among others. One immediately notices the import of these cities on the world stage. Brussels - World Bank and Nato. Frankfurt - head of the continental banking houses. Paris - large commercial offerings even in light of its status as an ertswhile friend.
I do not mean to belabor the point but these are major world cities that have United serving them directly from the seat of the former colonies. London alone merits four flights a day in the summer to Heathrow with a recent upguage to a 400 and talk of the 767 being pastured in exchange for a 777!
I say all this only to ask that one certainly gains the impression that Dulles is an important cog in the wheel as it provides links bewtween Washington and the worlds major cities (except that it should perhaps try to reach Tokyo as well - why does it not?). Why in the blazes would United decamp from such revenue potential? I think that many WISH for United to leave but I do not see how it would prove wise for them to adopt such a course of action.

Cheers

 

[iflyjetz]

UAL's attempt to have MESA try a hostile takeover wasn't pleasant either - that would have slowly ended our careers just as surely as bankruptcy. That's pretty much the attitudes of the entire pilot group at ACA. Speaking as an FO, what would I have to gain by continuing to fly for United Express??? $35k a year and no upgrades as UAL would keep us stagnant - without upgrades, there is ZERO chance to move on anywhere else as PIC time is mandatory requirement. Therefore, my (and many others here) only option is to roll the dice and Fly Independence. If it goes under, I won't have any problem finding a non-flying job that pays as much......

Ah, the crux of the problem. Regionals and the military have historically been apprenticeship positions for pilots. To view them as anything other than steppingstones to the majors is foolhardy.
The current upgrade stagnation at ACA has nothing to do with UAL; it is industrywide. You'll have to sit in your right seat a bit longer than you planned; I'm furloughed. No big deal; that's all part of the industry. Upgrades will (would) return at ACA when the majors start hiring again and ACA's captains move on to the major airlines.
If you're pinning your career on Independence, I'd highly suggest that you work hard on that nonflying backup. Otherwise, just view ACA as the steppingstone that it has always been.

UKRidge, UAL will not be abandoning its Dulles hub. Just wishful thinking on the part of a few. Thanks for the report on the upguaging of equipment. It bodes well for the future; I imagine that UAL will be upguaging and increasing frequency on multiple routes.

 

[Cosmo]

Ukridge:

IMHO, I think it's extremely unlikely that United will abandon its IAD hub. For one thing, United has issued at least two press releases in the last six months reiterating its commitment to IAD, and that commitment has been seen in the carrier's upgrading of its San Juan (SJU) service from weekly to daily nonstop flights last month and the start-up of new nonstop routes to Cancun (CUN) and San Jose, Costa Rica (SJO) in February. And on the RJ front, United started new nonstop service to both St. Louis (STL) and Kansas City (MCI) this past Fall, and in March will resume nonstop service to Austin, Texas (AUS). This is in addition to slowly replacing ACA's service with United's other RJ operators and, as iflyjetz postulates above, potentially some additional mainline flying prior to emerging from Chapter 11 in June.

Second, IAD has the good fortune to have the ability to expand both its runway and terminal capacity substantially beyond what currently exists, a claim that few major airports in the U.S. (and none in the northeastern part of the country) can make. IAD's situation compares favorably with the circumstances currently seen in places such as BOS or PHL, for example.

Third, United operates a considerable amount of nonstop service in the transcon markets from IAD, including SEA, PDX, SFO, SJC, OAK, LAX, SAN, LAS and PHX, far more than any other carrier. These flights generally tend to have pretty good load factors and fairly strong yields. And remember, United's service to SFO and LAX provides connections to the carrier's vast Pacific operations.

Fourth, the Washington area generates a lot of business travel in both the private and public (defense and civilian) sectors. This often tends to be high-yield travel, especially to international destinations, which helps support the United nonstop flights to the various international cities that you mentioned (plus Mexico City (MEX) that you omitted). And for at least the near term, these international flights are not likely to be subject to encroachment by the low-fare carriers.

Finally, there is nonstop service from IAD to additional major international cities that United serves via code-sharing on flights operated by its Star Alliance partners. This includes ANA service to Tokyo (NRT), SAS to Copenhagen (CPH), Austrian to Vienna (VIE), BMI to Manchester (MAN), and Air Canada to Toronto (YYZ) and Montreal (YUL).

So all things considered, it appears that United's presence at IAD is unlikely to be diminished and, indeed, is likely to grow during the coming years, if for no other reason than to be competitive with ACA/Independence and/or any other carrier. If you still have some doubts, remember United's strong and successful response to US Airways' MetroJet expansion at IAD back in 1999.

 

[Ukridge]

Cosmo wrote: "This often tends to be high-yield travel, especially to international destinations, which helps support the United nonstop flights to the various international cities that you mentioned.."

Apt point Cosmo. This alone would make one question why United would retreat from Washington. As an example of the possible yield, if I remember correctly I had once spotted a Sabena aircraft at the gate in Dulles. After their unfortunate demise it seems that United is the only carrier now plying its trade between Brussels and Washington. Just looking at the World Bank and Nato traffic I could imagine that this must be something that United would not wish to walk away from. Of course London speaks for itself and I can imagine the others are as strong.

The expansion possibility is an interesting one. I am sure that you have heard about the verbal explosion that resulted in the recent recommendation concerning runway building in the London area. Once the surrounding area is built in, it is almost impossible to pour more concrete.

Cosmo wrote: "If you still have some doubts..."

No doubts at all! My initial post was driven by the statement of 46Driver postulating that United would pack its bags in Dulles. Your very well stated points provide evidence that United would actually be well served to not only maintain but even possibly expand service there rather than shrink it. As I opined, I think that there are those who are wishing United to leave.

Also, Cosmo wins high marks for his/her use of "second," and "third" instead of "secondly" and "thirdly" which is the all too common error. I shudder to think of what I suffered in school when I let slip a "thirdly" or "secondly." Well played Cosmo. Well played.

 

[Cosmo]

Cosmo wrote: "If you still have some doubts..."

No doubts at all!

Actually, Ukridge, that was written for those who apparently still have some doubts about United's staying power at IAD, and was not meant to be directed at you. I should have made that point more clearly. My apologies.

Also, Cosmo wins high marks for his/her use of "second," and "third" instead of "secondly" and "thirdly" which is the all too common error. I shudder to think of what I suffered in school when I let slip a "thirdly" or "secondly." Well played Cosmo. Well played.

I wish I could claim that this was due to my stellar educational achievements too many years ago, but alas it was instead pure luck. But thanks for the compliment anyway. And for the record, I'm a "his", not a "her".

 

[Busdrvr]

"Busdrvr - Why as 46Driver maintains would United decamp from Dulles and move Westward?"

What Cosmo said.

"Also, Cosmo wins high marks for his/her use of "second," and "third" instead of "secondly" and "thirdly" which is the all too common error."

UK,. english is OUR language and we'll butcher it at will!!!