Air Wisconsin - The Runaway Bride?

[700UW]

From Aviation Daily:

In an update to Air Wisconsin employees, CEO Geoff Crowley said it would take about a year to transition its flying from United to new partner US Airways. In February, Air Wisconsin subsidiary Eastshore Aviation agreed to invest $125 million in US Airways in a deal that gave the regional carrier an option to fly its 70 CRJs under the US Airways Express banner.

Crowley called the US Airways deal a "significant investment" but said the carrier was willing to make the deal to "uphold our commitment to protect the long-term viability of Air Wisconsin."

Air Wisconsin's CEO also reminded employees of the "position we were placed in by United. In a sense, we were asked to continue our business at rates that would not cover our costs and would have ultimately put Air Wisconsin out of business."

 

[USA320Pilot]

767jetz:

700UW is correct.

What's the prupose of your post? To spread misinformation?

United's rejection of the Air Wisonsin "fee for service" contract is more good news for US Airways. Separately, how many mainlien aircraft is Untied taking out of service this year? Is the number around 70 or is it higher than that?

In regard to the UCT & ICT, how many times did David Bronner publicly state that he was interested in buying UA assets for US? By the way, the UCT & ICT is not dead.

Regards,

USA320Pilot

 

[funguy2]

The 1 year transition from UAX to USX is also noted and implied in the following Associated Press Article

United Express Contract Ends With Air Wis.

Isn't that public information nice? No conjecture, speculation, or super-insider sources... Just the facts, Jack.

It still seems unclear how all of this affects US Airways...

Does US Airways go back and end agreements with Mesa/TSA with phase-out agreements? Does US Airways terminate TSA/Mesa immediately and take a short-term hit on Express capacity? Does Mesa/Orenstein pony up some cash now that his USX business appears to be in extreme jeopardy? Does all of this hoopla occuring at this junction create problems for an August 31 emergence from BK? All interesting questions.

 

[sfb]

United's rejection of the Air Wisonsin "fee for service" contract is more good news for US Airways. Separately, how many mainlien aircraft is Untied taking out of service this year? Is the number around 70 or is it higher than that?

It's good news? US Airways has probably lost whatever leverage they might have had over Mesa and Trans States to get those companies to make an equity investment in the company, and it's unlikely that AWAC is significantly lower-cost than either, if at all. And there will be cost in switching over to AWAC from Mesa & TSA, and it would be unsurprising if US lost the Air Midwest feed to boot.

United has stated that 42 mainline aircraft will leave its fleet -- 8.4% of the fleet. US Airways will be reducing its fleet by 36 aircraft from 281 to 245 in the next two to three years -- that's 12.8% of the fleet. United will have reduced its fleet by 25% since 2001; compare this to a reduction of 40% at US Airways in the same period.

In regard to the UCT & ICT, how many times did David Bronner publicly state that he was interested in buying UA assets for US?

Didn't he also think that the post-Bankruptcy I business plan was enough of a winner to drop a few hundred million dollars of Alabama public retirees' money into as well? If US only needs $100 million more to get to its goal for equity investment, why hasn't Bronner put up the money?

By the way, the UCT & ICT is not dead.

"I triple guarantee you, there are no American soldiers in Baghdad."

"They're not even [within] 100 miles [of Baghdad]. They are not in any place. They hold no place in Iraq. This is an illusion ... they are trying to sell to the others an illusion."

 

[dfw79]

Just an idea...and I know i'm giving management too much credit - but work with me on this for right now.

What is the ability for US to use these additional aircraft as expansion aircraft? Sure we'd all rather see mainline aircraft used for expansion...but thats not going to happen. Of course due to capacity issues some of this may not be possible, but one look may be into any of the express stations that were closed the last couple of years (such as TOL).

The other side that should be looked at are markets like GRB, MSN, CID, DSM, MLI, along with larger cities like OMA, OKC, TUL, AUS, SAT, ABQ, COS to begin service to these markets to reduce exposure to the UAL code-share. Yeah some of these may be tough on a CRJ, but its an option. The only area that these won't help much would be western cities like PDX, YVR, TUC, SLC, etc...that would be out of range from CLT or PHL. Of course those cities in the last group should be mainline flights.

Just a thought that I felt I should get down before I lost it. It may be completely foolish to think there is any chance of it happening, but it makes sense.

 

[sfb]

dfw79-

My take on your suggestion is this:

Of the "larger" cities you listed, WN is the dominant carrier in all but the one (COS) they don't currently serve. And for the entire list, US will offer very little that's unique when compared to the rest of the network carriers, especially if what US offers is just two or three daily RJ's. If you're in GRB, for example, Northwest is going to kill you on frequency and has the WorldPerks members hooked. If you're in AUS, American will have better itineraries via DFW and Delta is going to have better schedule choices via ATL than US could offer via CLT.

The other consideration is that opening new routes and stations isn't cheap, and this may not be the wisest use of scarce cash in the short term.

 

[ClueByFour]

United's rejection of the Air Wisonsin "fee for service" contract is more good news for US Airways.

Good.

10 years of a cost + (probably) 5% model contract for 70+ relatively high CASM aircraft. Good that their owner has an equity stake and board representation (so it'll never go away). Good that to finance this, U is returning mainline aircraft.

If these are good, I suppose Baghdad Bob thinks that the second Gulf War is still going "Well" for the Saddam regime.

In regard to the UCT & ICT, how many times did David Bronner publicly state that he was interested in buying UA assets for US? By the way, the UCT & ICT is not dead.

You don't see Bronner stepping up in BK II. One would think (after blowing a few hundred million down the drain the first time) there is a reason.

 

[dfw79]

dfw79-

My take on your suggestion is this:

Of the "larger" cities you listed, WN is the dominant carrier in all but the one (COS) they don't currently serve. And for the entire list, US will offer very little that's unique when compared to the rest of the network carriers, especially if what US offers is just two or three daily RJ's. If you're in GRB, for example, Northwest is going to kill you on frequency and has the WorldPerks members hooked. If you're in AUS, American will have better itineraries via DFW and Delta is going to have better schedule choices via ATL than US could offer via CLT.

The other consideration is that opening new routes and stations isn't cheap, and this may not be the wisest use of scarce cash in the short term.

[post="261162"][/post]​

I wouldn't consider WN the dominant carrier in OKC or TUL...typically AA has maintained a larger share of the market while WN has cut capacity. America West, Frontier, and Allegiant have all seen some success in entering OKC (HP doesn't start for another month or so, but they've already upgraded one flight to a CR9 from a CRJ).

As far as the smaller midwest cities...I brought that up considering Air Wisky probably already does ground handling in some of them, so station start up costs would be a bit lower.

Regarding competing against NW, DL, and AA...I tend to agree with you. The other option may be looking at offering flights nonstop into the business centers of the northeast with a couple hub flights to CLT. I'll bring up OKC again. For passengers going that direction, the only nonstop is to EWR on CoEx. There are apparent opportunities in the market for nonstop flights to the business centers on the east coast and perhaps also certain Florida markets. Its all about finding a niche...and a city that is growing with the success OKC is, it wouldn't be a bad idea to look into. Not to mention the new terminal, once completed next year...will bring a net gain of around 10 gates...up to 25-30 from the 17 before. Also the tax incentives the state offers to airlines providing nonstop service to either coast isn't a bad thing either.

 

[sfb]

I wouldn't consider WN the dominant carrier in OKC or TUL...typically AA has maintained a larger share of the market while WN has cut capacity. America West, Frontier, and Allegiant have all seen some success in entering OKC (HP doesn't start for another month or so, but they've already upgraded one flight to a CR9 from a CRJ).

AA beats out WN at OKC for total departures, but WN serves more cities non-stop with more seats (since about 3/4 of AA's service at OKC is RJ's). WN beats AA at TUL in departures, seats, and non-stop destinations.

As far as the smaller midwest cities...I brought that up considering Air Wisky probably already does ground handling in some of them, so station start up costs would be a bit lower.

True but there's the expense of marketing, flying empty seats until people know about your service beyond "Who? Are they still in business?", etc.

Regarding competing against NW, DL, and AA...I tend to agree with you. The other option may be looking at offering flights nonstop into the business centers of the northeast with a couple hub flights to CLT. I'll bring up OKC again. For passengers going that direction, the only nonstop is to EWR on CoEx. There are apparent opportunities in the market for nonstop flights to the business centers on the east coast and perhaps also certain Florida markets.

If you look at the real market numbers from DOT, they really aren't all that strong out of OKC or TUL to either coast. The only top-1000 market is OKC-NYC, and that manages just over 100 passengers each way per day. To really offer a service which is attractive to business travelers, you need more than one non-stop per day -- but two 70-seater trips between OKC and LGA, as an example, would probably be more capacity than the market would justify (and you'd need to have a 70-seater or ERJ-145XR due to the distance).

 

[767jetz]

US is not selling Shuttle gates, they have the option to sell Slots and lease them back to Republic then purchase them back, and the are not selling any 737s, they are returning them to the leaseholders.

[post="261116"][/post]​

Thanks. I stand corrected. US is selling slots.

USA320pilot,

The purpose of my post was to point out how often you are wrong, yet won't admit it. Despite your false claim that you admit your mistakes. What part of that did you miss?

Did you or did you not claim that UA was in trouble with regard to Air Wisconsin?
Did you or did you not claim the same thing with regard to Atlantic Coast?
Are these issues now favorably resolved? Who was first to tell you that they would be?
When would NOW be a good time to stop being a hypocrite?
(Don't worry, sparky. No one actually expects you to answer those questions. )

Nice attempt at redirecting the subject though.

I also like to show how in your eyes, every stumbling block at UA is an insurmoutable barrier that signals the downfall of the airline you jealously loathe, while every similar stumbling block at US is another step to world domination and your own personal gain.

Pilots like you are nauseating to any self respecting ALPA member, other union members, and most well adjusted normal human beings.

767jetz

 

[USA320Pilot]

SFB & Clue:

US Airways senior management knew how the United - Air Wisconsin agreement would play out. The parties have been in negotiations for weeks, which is why Untied and Air Wisconsin reached a consensual agreement, versus a fight a la United- Air Wisconsin.

For United & US Airways, the business partners seem to continue to work together. US Airways gets badly needed DIP/exit financing, a high quality carrier to join the US Airways Express network, and a partner interested in the long-term profits of the mainline, a partner whose employees are already Star Alliance trained", versus a company only interested in their "fee for service" payment.

In regard to leverage, you could see both Mesa and TSA replaced by Air Wisconsin and both Republic and Air Wisconsin operating 90seat RJs for US Airways Express.

As far as RSA, they're not out of the picture.

For United, they get 30 new RJs with 70-seat capacity, better economics, which can be used to replace the ASM's lost with the 70 mainline jet reduction.

Speaking of United, yesterday United CEO Glenn Tilton said (U.S. mainline airlines) "could eventually consolidate into three carriers."

See Story

Why would Tilton make those public comments, again?

Regards,

USA320Pilot

 

[USA320Pilot]

767jetz:

The 137 East Coast slots that could be sold (they have not and may not be sold dependent upon the price of oil) are commuter (RJ) slots, which have no effect on mainline operations. The slots will be leased back for US Airways Express and then can be repurchased within two years.

In regard to being in trouble that does not mean the iisuescould not be favorably resolved. After all United has been in bankruptcy for 2.5 years and will likely have the longest formal reorganization in airline history. If you do not think that is trouble, what is? Nonetheless, I am glad that Untied was able to resolve the Dulles feed issues and reach a consensual agreement with Air Wisconsin.

In regard to your nauseating insult, the issue is you do not like the news I report, which I understand, but its the facts. By the way, you failed to answer my question, how many times did US Airways chairman David Bronner publicly state in interviews he was interested in buying United assets for US Airways?

Best regards,

USA320Pilot

 

[700UW]

And he also said this:

And if US Airways does file, Bronner said, the Arlington-based airline only has a "1 to 2 percent" chance of surviving.

Bronner speaks

And this:

Bronner said he can't imagine pumping more money into the airline and starting a new set of negotiations with creditors and labor groups -- the same labor groups that have yet to give the airline an additional $800 million in concessions the airline claims it needs to survive. "It is just not worth it," he said in a telephone interview yesterday.

Bronner Speaks Again

And this:

Bronner left open the possibility that if US Airways does come up with sufficient cost cuts, then the pension system, which has a 36.2 percent stake in the company, might invest more money in the second reorganization.

One more time

 

[funguy2]

Speaking of United, yesterday United CEO Glenn Tilton said (U.S. mainline airlines) "could eventually consolidate into three carriers."

See Story

Why would Tilton make those public comments, again?

USA320Pilot,

Anyone who is anyone in the airline industry has been making comments like this one since 1979. So does that mean that in 1979, people knew that United and Allegheny and Piedmont and Empire would all eventually merge?

Please, please, please, please stop implying that UAL and US Airways will merge on the basis of these kinds of macro-industry comments. I have heard many airlines CEOs who are not related to US Airways/United make the same comments, as well as various industry observers.

And again... The quote, "could eventually consolidate into three carriers," is noticably missing any of the following key words: MERGER, TRANSACTION, ACQUISITION. As I have been saying for at least a year, consolidation can come in the form of some players liquidating... If US Airways goes to Chapter 7 liquidation, the legacy airline indsutry will consolidate from 6 to 5 carriers. If UAL liquidates, the legacy industry would again consolidate from 5 to 4 carriers... and yet there was no merger.

Please give it a rest... The only thing longer than UAL's BK is your insistence on a UAL/US Airways merger.

And by the way, I know you did not predict a merger, so you can come back and say, "I never said that..." But the implication is clearly there.

 

[funguy2]

Just an idea...and I know i'm giving management too much credit - but work with me on this for right now.

What is the ability for US to use these additional aircraft as expansion aircraft? Sure we'd all rather see mainline aircraft used for expansion...but thats not going to happen. Of course due to capacity issues some of this may not be possible, but one look may be into any of the express stations that were closed the last couple of years (such as TOL).

The other side that should be looked at are markets like GRB, MSN, CID, DSM, MLI, along with larger cities like OMA, OKC, TUL, AUS, SAT, ABQ, COS to begin service to these markets to reduce exposure to the UAL code-share. Yeah some of these may be tough on a CRJ, but its an option. The only area that these won't help much would be western cities like PDX, YVR, TUC, SLC, etc...that would be out of range from CLT or PHL. Of course those cities in the last group should be mainline flights.

Just a thought that I felt I should get down before I lost it. It may be completely foolish to think there is any chance of it happening, but it makes sense.

[post="261157"][/post]​

dfw79-

I would agree with sfb and add the following comments. The industry is already in a situation of oversupply... So increasing high CASM flying will only have the effect of reducing Yield and RASM... So any added flying, particularly high CASM flying, would be, in my opinion, a bad thing. The only flying that should be added to the domestic system at this point should be the LCC's, because they can be profitable at these low fares.

Secondly, I would add that US Airways has flown to MSN, OMA, AUS, SAT, TUS, and SAT (and ICT, not on your list) in the past. They were unsuccessful then... Granted, they flew these mostly via PIT, but I don't expect them to be able to be that much more successful now.