Trans States Airlines (STL based commuter airline for AA) announced today that they are forging ahead in a new relationship with UA for service out of ORD and IAD. Could this be an attempt to diversify its partners and localities prior to an AA pull-out of STL?
How would a commuter airline be affected in the almost inevitable scenario of AA slowly or rapidly removing service from STL?
Deal with United Airlines will boost St. Louis carrier's national presence
By Cynthia Wilson Post-Dispatch
updated: 07/15/2003 08:22 AM
Trans States Airlines is preparing to fly as many as 25 regional jets for United Airlines out of Dulles International Airport in Washington and O'Hare International Airport in Chicago.
A spokesman for United, which has been operating in Chapter 11 bankruptcy since December, said a Bankruptcy Court judge could review the proposed deal at a hearing this week.
If a judge approves the agreement, announced last week between United and Trans States, the St. Louis-based commuter airline will move a step closer to becoming a major player in the regional airline business, experts say.
Trans States is American Airlines' main provider of regional service at Lambert Field. It operates 242 daily flights in and out of Lambert to 25 cities under the AmericanConnection brand, said William Mishk, a spokesman for Trans States. The carrier operates 228 flights for US Airways under the US Airways Express brand in Baltimore and Pittsburgh.
A proposed 10-year agreement with United would increase Trans States' national presence, and the privately held carrier would be less vulnerable if a client has a major downturn, said Darryl Jenkins, director of the Aviation Institute at George Washington University
"This gives them a lot more credibility than they ever had before," Jenkins said.
The deal calls for Trans States to fly select United Express routes out of Dulles and O'Hare airports. If the judge approves the deal, Trans States might take over some of the flying provided by Atlanta Coast Airlines. United and Atlanta Coast said this month that they were having difficulty negotiating a new agreement, leaving United to seek other providers.
Major airlines are eager to shift more of their operating expenses to regional affiliates, said Richard Aboulafia, senior aerospace analyst with the Teal Group in Fairfax, Va. If the regional carriers don't play along, the major carriers will take their business elsewhere, he said.
Industry experts say a switch by United from Atlanta Coast could be a severe blow to the small commuter because the contract with United accounts for most of its business. But if Trans States wins United's business, the deal positions Trans States to be a major player in the regional airline industry, expanding the carrier's market share and national presence, Aboulafia said.
"A few more contracts like this, and they will be among the greats."
Trans States will buy and lease 25 of the 50-seat Embraer-145 regional jets to service the new contract with United. Ten of those jets are expected to go into service for United in the fourth quarter, Mishk said.
Embraer is financing the jet acquisitions, Mishk said. He declined to give details.
Trans States got its first opportunity to fly regional jets with United Express in 1998 in Chicago. But the carrier left United in 2000 to fly for Trans World Airlines, which just had begun offering regional jet service. At the time, Trans States envisioned that it could grow faster by flying for TWA, Mishk said. But TWA filed for bankruptcy a year later.
American continued to use Trans States services after it bought TWA's assets, but American was not allowed to use the 50-seat regional jets Trans States flew because it would have violated American's contract with its pilots.
Trans States has resumed regional-jet flying for American at Lambert, Mishk said. He said the proposed deal with United won't interfere with Trans States' ability to grow AmericanConnection service at Lambert if American Airlines contracts out more of its flights.