Mutual Support: The Paradigm

[jack mama]

Just the republic deal....don't know if that's official or not though

 

[funguy2]

I don't know that these deals predict the future shape of the industry.  I think these deals are more focused on short term liquidity.  US basically gets 250 million in cash in return Republic and Air Wisc get 8 years of flying at cost + 5 %, not a bad deal at all.  In the end, US get a little cash to get over the hump, and the express feeders get costs paid plus at little profit.

[post="256424"][/post]​

Actually, I think there is more to it than that... AirWisc (probably) and Republic get equity in US Airways... Or ownership. The only other time that this has occurred, to my recollection, was when Mesa Air helped America West out of their 1991-94 BK. Otherwise, I don't recall the Regional segment of the industry having a substantial ownership position in its mainline partner(s). This would be a significant change in fortunes from the current and past, where typically, if there is an ownership position, it is the major owning the regional (AA/Eagle; CO/ExpressJet; NW/Pinnacle; US/its WO'eds).

Of course, this change has largely been driven by the airlines (and unions) themselves. The whole scope issue has lead many majors to outsource with a guaranteed profit - thus creating a systematic transfer of funds and power. I think this is very interesting. It will be interesting to see how other companies will be affected by this. We've already seen ExpressJet IPO'ed and DAL consider selling its wholly owned's to SkyWest (reportedly).

 

[BoeingBoy]

Just the republic deal....don't know if that's official or not though

[post="256656"][/post]​

I know that Republic lowered their rate on the Erj-145 operation to cost + 5% - at least that's what the company said in both court filings and the announcement on theHub. The actual agreement doesn't say (it's in the redacted parts, I presume), and I've seen nothing that hints at what the Republic Emb-170/190 rate would be. Likewise for the AirWis deal.

Republic's CASM is about equal to Mesa's, though - a few hundredths of a cent difference.

Jim