USA320Pilot: You should not be so misleading...USA320Pilot said:
Atlantic Coast's 2Q loss is not reflective of the potential success or failure of Independence Air... Independence Air began flying to just 5 destinations on June 16th. In other words... ACAI may have lost $27mil from April 1 to June 30, however IAir only flew for two weeks of that quarter, or 16% of the period. Since during that last two weeks, ACAI still operated as United Express and Delta Connection, I would bet less than 10% of their 2Q capacity was related to Independence Air
Furthermore, the operating loss was only $11mil for the quarter. Specical Items (to get to net loss) included write-downs on 328JET and J-31 equipment. Additionally, the company claims the repainting cost was $1mil for the quarter to paint aircraft into the IAir livery. The company (in the press release) gave no cost associated to training, etc, however I understand that in many stations, ACA already had their own people, and are using contractors in several outstations as reported here (i.e. training expenses should have been minimal).
I think the jury is still out on IAir. I think they have a shot at success, although not a very good one. The high CASM of the CRJ is a problem, however with a rational fare structure and A319's on the way, they actually have the potential to have a decent RASM.
I think the bigger problem is the high frequency strategy they are employing, which means more connecting passengers and a potential drain on RASM (connecting pax dilute RASM compared to local pax).
Also, they have a lot of cash (for an airline that size) and may see additional cash inflows as they shed the Delta Connection operation (to the extent they own any of the 328JET's and sell them to someone else to operate on DAL's behalf... the current rumor is that DAL is talking to Midwest Connect...), so they have some time to destroy UAIR yields.
