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funguy2 said:I liked Cordle's comment too: "It looks like the tail wagging the dog. It's not happened before," said Vaughn Cordle, president of Airline Forecasts LLC of Washington, D.C. "In the past, it's always been the parents who dictated the terms for the feeders."
Boyd seems to think that the real advantage here for Republic is the reward for US Airways' failure: Boyd described the takeover of the Embraer 170s as "a smart strategic move" by Bedford. Republic could wind up controlling the all-important slots if US Airways eventually collapses. Republic then could sell or lease the slots to a large carrier, Boyd said.
I would add that Republic could shop itself around as a Regional partner to the highest bidder if US Airways collapses, or even try a FlyI/DCAir type situaiton.
RowUnderDCA: I had speculated about this on another thread. What makes this situation a bit different from a traditional retail franchise is that US Airways would continue to collect all the revenue and presumably continue to guarantee profit to the operators. That is, afterall, what the regional's are trying to protect - their guaranteed profit. I would do the same.
1. What does US offer Mesa? Clearly AirWisc was enticed by a backup plan to their UAX contract. Republic/Chautauqua gets EMB-170 aircraft/orders + slots + some control over its future. What does Mesa get? I would think that Orenstein, being the wheeler-dealer he seems to be, would not settle for less than what Republic is getting.
2. How does this work going forward? What happens when these three companies cannot get along down the line? Surely they all have an interest in seeing US Airways succeed, but I can see problems arising when Mesa feels AirWisc is being given an advantage or vice-versa. Seems like it could cause problems down the road when/if there comes a time to expand or shrink the fleet. It will become a competition among the three owners. If you have ever worked in a small business with multiple owners with different strategic directions as I have, you know this can become a problem quickly.
sfb said:I suppose the short answer in regard to Mesa is that they get to preserve the portion of their business related to US Airways. The long answer, of course, depends on what happens with respect to the UAL regional flying; if Mesa gets the nod from UAL to replace AWAC, they really don't need US Airways at all. Then again, if US Airways were to sweeten the deal, perhaps by selling PSA and possibly Piedmont to Mesa for a near-fire-sale price, or even offering some sort of codeshare on 737's, you might see Mesa jump in, limited by what amount of their roughly $200 million in cash they can afford to invest.
funguy2 said:Boyd seems to think that the real advantage here for Republic is the reward for US Airways' failure:Â Boyd described the takeover of the Embraer 170s as "a smart strategic move" by Bedford. Republic could wind up controlling the all-important slots if US Airways eventually collapses. Republic then could sell or lease the slots to a large carrier, Boyd said.
I would add that Republic could shop itself around as a Regional partner to the highest bidder if US Airways collapses, or even try a FlyI/DCAir type situaiton.
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