MSYtristar From United States of America, joined Aug 2005, 6344 posts, RR: 50 Reply 8, posted (10 years 4 days 7 hours ago) and read 3456 times:
I worked for them for about a year before we went under. In fact, I worked the last NJ flight from MSY (737-200, 6:20pm departure, went out with over 100 passengers) before being called into the back office and was told not to report to work the next day.
It was a very nice little company which suffered from a bad case of mismanagement. Numerous questionable decisions were made towards the end. It really is a shame, they had some great employees, some of which I have remained in contact with to this day.
MSYtristar From United States of America, joined Aug 2005, 6344 posts, RR: 50 Reply 12, posted (10 years 3 days 18 hours ago) and read 3313 times:
From what I observed from my time with the company, they could not really decided what market they were going after: leisure or business.
The introduction of the MD-80's (-81/83) and MD-87's allowed NJ to open up some more markets and improve its reliability and professional image, but the costs associated with these aircraft were high, especially for a financially-strapped carrier. Unfortunately, most of the 737-200's were getting very long in the tooth, and the operational costs of the aircraft really put pressure on NJ to get ride of them a.s.a.p. That being said, I recall the MD-80's having more mechanical delays than the 732's towards the end....go figure.
Vanguard did its best, but it was too little too late. Opening up COS was pretty stupid I thought since we did fly to DEN five times daily. It would have been more wise to use those aircraft to add frequencies to the more popular markets for NJ (ATL, LAX, SEA, etc.)
The real nail in the coffin for Vanguard was the Kansas City airport, which as we all know is not the best for connecting flights. During the last few months of their existence, NJ did move to terminal A in MCI, which had some inter-connected gates, but still, not a great setting for hub operations.
They introduced the "SkyBox" business class service on the MD's, which was best known for the cheap $50 upgrades for passengers ($25 for employees...very nice!). The SkyBox service (besides suffering from a STUPID name) was not really popular as far as advanced purchased tickets were concerned...why pay a full business fare when you can upgrade for $50?
It was sad to see Vanguard go under. I had some great memories with them, including spending some time working in DEN,SFO,FLL,and SEA (Andreas, I'm sure you miss the "moveable podium" lol..that was interesting).
The in-flight service was always top notch, the aircraft were for the most part clean and comfortable, and everyone in the company knew one another for the most part.
What really annoyed me the most was that we really had no advanced warning of our demise. None whatsoever. I am not lying when I say that an hour after we pushed back our flight, we were all in our office in stunned disbelief. Hell, my MANAGER didn't know anything until she listened to the conference call with us. It was a very humbling experience.
I do blame Vanguard top management to a certain extent for trying to do too much with too few resources. We even had to use sub-service aircraft for a while (Transmeridian 727's), which is NOT a cheap undertaking by any stretch of the imagination. We were getting 100 to 110 passengers on the 727 out of MSY...which is a great, profitable load for our 120-seat 732's...but those 727's held 160+!!! It was that way in other markets as well.
Ok, I'm all done for now, phew, email me if yall have any more questions.
Ken4556 From United States of America, joined Jun 1999, 169 posts, RR: 0 Reply 13, posted (10 years 3 days 18 hours ago) and read 3287 times:
I had booked a one way flight to Denver from Atlanta in a Monday in late July 2002 as I was doing a circle trip and came home through Mexico City. I flew from MCI to DEN on a wet leased 727, I forget whose it was. That fateful Monday was the last day of operation for Vanguard.
I used Vanguard quite regular on short notice flights to Denver from Atlanta as it was cheap. It was a nice little airline to fly. I will always remember flying it on it last day. Something I definitely had not planned on...
Mariner From New Zealand, joined Nov 2001, 23868 posts, RR: 87 Reply 17, posted (10 years 3 days 17 hours ago) and read 3200 times:
Most of Vanguard's problems were of it's own (or it's financier's) making.
The original plan was to be a sort of "Heartland" LCC, flying from MCI to short to mid destinations. For a while that worked. For a couple of quarters they made money - not much, but some.
The airline was financed by William Hambrecht, an extremely successful banker, but it seems to have been clear to him fairly early on that Vanguard couldn't survive with it's then model. Or maybe he just wanted a bigger, grander airline.
Or maybe he just wanted to get his investment back.
There were some problems. The CEO was a bit seat of the pants, an ex-pilot, jumping into new cities (Cincinnati) and pulling out when they didn't work.
Hambrecht decided that Vanguard should merge with Frontier. To this end, he bought a big bunch of shares in Frontier.
But Frontier said no.
So Hambrecht made big changes at Vanguard. They began flying Denver to Midway and doubled service MCI/DEN. It was as if Hambrecht wanted to try and screw Frontier.
Shock #1: Hambrecht enticed Jeff Potter away from Frontier to be CEO of Vanguard.
This led to a lot - I mean a LOT - of speculation that Potter's function was somehow to bring about the merger with Frontier.
Hambrecht insisted that Vanguard become "like Frontier, maybe better" - to start service to both coasts, to have the business class (see SkyBox above), and a new, smart livery.
He found some money (through investors and aircraft lessors) for some new planes, the MD-80's, but not really enough money to make a big splash.
To reduce Vanguard's quite large debt, Hambrecht kept issuing stock (to himself and his pals) to forgive the debt, but this was really only smart paperwork - the debt was still there.
Shock #2: after approximately nine months on the job, Potter left Vanguard and returned to Frontier.
A new CEO was appointed at Vanguard, but there wasn't a lot he could do. The lessors weren't getting lease payments for aircraft (more stock issued to them), but they had nowhere else to put the planes, so they kept them at Vanguard.
Shock #3: 9/11.
Vanguard simply couldn't survive that whammy. Somehow, they kept flying and applied to the ATSB for a loan guarantee.
When the ATSB turned them down, that was the end.
Hambrecht decided he didn't want to flush any more money down the toot.
I had a small amount of money invested in them from the early days, the "Heartland" days, because I thought that was a pretty good idea.
That money went down the toot, too. Such is life when you invest in airlines.
Elwood64151 From United States of America, joined Feb 2002, 2477 posts, RR: 7 Reply 18, posted (10 years 3 days 16 hours ago) and read 3176 times:
We never ordered 717s. With our seating layout, we would have had 96 passengers... Not very profitable...
The bad decisions weren't made toward the end... They were made years prior to the company going under. That last year was probably the best-run year of the company. Also, your perception of the MD-80s is a bit skewed. I was at MCI on the ramp and in OPS, and the MD-80s were more reliable than the 732s, but not as much as they should have been.
Part of the problem was that most of them were early models, but some of them had no excuse. Also, one was damaged in a tail-strike, which didn't help their reliability factor.
The 727s had 148 seats. 110 pax was more than break-even for them, though they should have been flying to markets other than MSY. COS wasn't too bad, but PHX or SLC might have been more appropriate.
Oh, and at least you knew that night. I showed up for work the next morning. No one told me. I hadn't watched the news the night before (apparently, they'd caught wind of it early on), so I was clueless.
The cars out in front of NJ's old HQ are from ITS, which is handling gate security for the TSA at MCI, and for the TSA itself.
The spat with AA was over ICT, not DFW. And it was pushed by the Feds more than NJ. Still, trying to compete with the majors during the '90s to small markets probably wasn't the best idea.
You forgot shock #4: Vanguard was starting to come around just prior to 9/11. And shock #5: Vanguard was just about breaking-even (operationally speaking, not from its debt) just prior to shut-down.
Oh, and Potter was there for 11 months almost to the day. Met him once. Nice guy. Still a %$#& for stealing RNO.
Those who fail to learn history are doomed to repeat it in summer school.
Jeffrey1970 From United States of America, joined Apr 2001, 1336 posts, RR: 13 Reply 19, posted (10 years 3 days 16 hours ago) and read 3165 times:
Thank you for clearing that up. Yes I agree it was not wise of them to take on the majors. I believe I read once (I could be wrong) that one of Southwest beliefs was that it is best not to try and take on the majors head to head.
MSYtristar From United States of America, joined Aug 2005, 6344 posts, RR: 50 Reply 20, posted (10 years 3 days 16 hours ago) and read 3165 times:
Elwood, overall I agree that the M80's were more reliable than the 732's, but it just seemed like every time we saw one, they had a mechanical. I guess they didn't like the humidity down here. I spent about a month and a half in DEN, and they were hit or miss there as well....
Some of the TMA 727's had 172 seats, which we saw on occassion. I recall a few huge delays with those planes, but it was a great experience working 727 flights while it lasted.
I personally feel like some of the moves made towards the end weren't very smart from a business standpoint, but as you said, not much could be done about it.
Mariner From New Zealand, joined Nov 2001, 23868 posts, RR: 87 Reply 21, posted (10 years 3 days 16 hours ago) and read 3152 times:
Re Potter's tenure: I did say "approximately" nine months on the job.
The reason I didn't mention what you call Shock #4 (or #5) is because it's sort of irrelevant.
UAL was "operationally profitable" in it's last report. But they still lost a lot of money in fact. I think the actual loss was about $150 million, give or take a few million or so.
Vanguard maybe have been "operationally breaking-even" by the end, but the debt load was huge, and the shareholder value had been almost completely wiped out.
Believe me, I'd love to have seen Vanguard survive and prosper - I might have got some of my investment back - but it would have taken a miracle, given the debt.
As to Potter being an %$#& for stealing Reno - well, mayhap. But it's a tough game. I mean, what was Vanguard doing flying Denver to Midway, Frontier's turf?
What we'll probably never know - and what I'd gve my eye teeth to know - is whether Potter went to Vanguard because he wanted to run Vanguard - or because he wanted CEO experience running any airline in preparation for his becoming CEO at Frontier. I think he never moved his wife and kids from Denver to Kansas City.
And what become of the last CEO - I think his name was Scott Dickerson? Yes? No? Where did he end up?
Elwood64151 From United States of America, joined Feb 2002, 2477 posts, RR: 7 Reply 23, posted (10 years 3 days 15 hours ago) and read 3123 times:
You're right. We occasionally had to pull a TransMeridian 727 that wasn't set up for us when one of the two that were had to go in for MX. Those had 168-172 seats.
Also, Dickson had actually come to us from Groupo TACA, where he helped in engineering a magnificent turn-around. Prior to that, he'd worked for SABRE Group, part of AMR Corp, and AA.
You're right. Potter never did move to KC. He didn't much like the town (his problem, a lot of really nice people there!). At least, that's how I understood it. That said, you're probably right that we shouldn't have been flying DEN-MDW n/s. Part of the whole idea of dropping many of the MDW flights was to focus on an MCI hub. However, the route didn't start until after Potter arrived. Even still, we should have put a non-compete clause in Potter's contract...
Those who fail to learn history are doomed to repeat it in summer school.
Staggerwing From United States of America, joined Mar 2002, 95 posts, RR: 1 Reply 24, posted (10 years 3 days 15 hours ago) and read 3121 times:
From a reservations standpoint, adding Colorado Springs and dropping Reno were both good moves. At the time that we cancelled our announced service to Reno we had sold less then 250 tickets. And this was with service starting in two weeks. The first days flights each had less then 25 people on board. In addition, the Reno Convention and Visitors Bureau had not honored their contract to advertise the service in markets that would connect.
Colorado Springs was an excellent choice for a couple of reasons. Our gate in Denver was at capacity with 5 flights a day in and out. We tried 6 a couple of times and it just didn't work. The times of the 6th flight were bad, but most importantly the turn around times were such that the next flight was arriving as the previous was pushing back from the gate. Clearly something had to be done. The demand was there, however we could not supply the product. To expand service in Denver we would have to lease a second gate for operational reasons. However, when we analyzed our PNR's, we realized that approximately 30% of our passengers lived closer to the Colorado Springs Airport then DIA. By putting a couple of flights into COS we were able to free up seats in DIA at a lower cost then trying to get a second gate.
Ex-Vanguard Reservations Supervisor
25 Blhp68: I refuse to believe that MCI was responsible for Vanguard's demise. If you can really tell me that people will avoid cheap fares because they have to
26 Sllevin: I really had hoped Vanguard would pull it together and survive. The MD-80's were a nice improvement -- and the reasonably priced "business" class up f
27 Elwood64151: Blhp68: NJ did give away several free tickets, but its problems started well before its demise. The company was very poorly run until about 18 months
28 Fxra: I do miss working (albeit through the phone) with the people at Vanguard. ANd still recall the shock i got when my bos called to tell me that (1) get
29 Srbmod: Vanguard did have at one point a minihub @ ATL, serving MCI, MYR, and PIT. They abandoned MYR and PIT because of AirTran's entry into those markets ou
30 Ssides: My brother used to live in AUS, and I remember him going to some radio-promoted car wash or something where he gave a $20 donation to some group and g
31 Blhp68: Elwood Well if anything is good news for MCI. It is that the city manager fired the aviation director Russ Widmar about 3 weeks ago. The city manager
32 Expressjetphx: Numerous questionable decisions were made towards the end. One of them being their livery.