Acvitale From United States of America, joined Aug 2001, 922 posts, RR: 10
Reply 2, posted (14 years 10 months 1 week 6 days 12 hours ago) and read 2265 times:
Legend had reached loads of at least 63 % as of November. However the long drawn out legal battles with AA and the low yields associated with a startup are apparently taking their toll.
They were supposably flushed with cash and with the new terminal and custom aircraft and the leasing of an additional 2 aircraft within the last 30 days it makes me wonder if they are not in the midst of 1 of 3 possible scenarios...
1... They ousted current management and are restructuring the carrier (investors actions)
2... The investors behind the project decided to cut their losses and withdrew from the project
3... The airline was hacked by an AA employee on the website and they posted the message
Trvlr From United States of America, joined Feb 2000, 4430 posts, RR: 19
Reply 6, posted (14 years 10 months 1 week 6 days 11 hours ago) and read 2206 times:
Gee, now I wonder if AA is going to take away the all first-class configuration on the Fokker 100s.
Legend Airlines Suspends Operations
Updated 11:34 AM ET December 2, 2000
DALLAS (AP) - Legend Airlines, a start-up that said it lost $1 million a week in its first six months, suspended operations Saturday.
It was unclear how long the shut down would last or what the prospects for recapitalization were, spokeswoman Kim Plaskett said.
Continental Airlines and Continental Express have agreed to honor Legend tickets to all destinations, she said.
Launched in 1996, Legend attempted to challenge Fort Worth-based American Airlines for business travelers in the Dallas-Fort Worth market by offering first-class amenities, such as leather seats and in-flight live television, aboard 56-seat jets.
American and the city of Fort Worth tried to block the airline's start-up, but Legend won the lengthy court battle and began flying from Dallas Love Field on April 5.
Last week, Legend filed documents with the U.S. Department of Transportation indicating it had lost nearly $44.7 million since 1996.
As of Sept. 30, Legend had $184,522 in cash on hand and reserves were declining by nearly $14,500 a week. At that rate, it would run out of cash the week of Christmas.
T. Allan McArtor, the airline's president and chief executive officer, said last week that the company would be able to raise enough capital to keep going. He said advance ticket sales for the holiday season and early 2001 are "very strong."
High fuel prices and higher-than-expected labor costs for retrofitting planes contributed to the airline's troubles, McArtor said.
Notdownnlocked From United States of America, joined Sep 2000, 972 posts, RR: 1
Reply 7, posted (14 years 10 months 1 week 6 days 10 hours ago) and read 2175 times:
The question now is not whether or not AA cancels the DAL flights, but would anybody like to place bets on how many hours from now the AA flights will end. I hope AA ends them soon so those passengers that didn't support Legend can get used to business as usual at DFW.
TxAgKuwait From United States of America, joined Aug 1999, 1803 posts, RR: 40
Reply 11, posted (14 years 10 months 1 week 6 days 8 hours ago) and read 2110 times:
I am not going to leap out here and say "I told you so".....but hey, I did. Several months back. You could look it up.
The AA competition is not what did Legend in (whether it is permanent or temporary.....the real deal is they are toast).
What killed Legend was (a) the business plan and (b) the fact they did not heed the lessons learned by Southwest and AirTran/ValuJet.
The business plan stunk. Despite the folks ( and many of you hang out at this website ) who like to oooh and ahhh over luxury air service...the real deal is people do not want to spend money unnecessarily.
An airplane seat moving from point A to point B is not a commodity of any lasting value. It's not like investing in a diamond ring or a nice new suburban home. If you are flying to Dallas...once you have arrived your air travel experience is of limited value.
Legend thought, wrongly in my view, that folks would line up to pay the full coach fare. They found out that people will line up to purchase heavily discounted advance purchase tickets...and a few folks will have to go at the last minute and thus will be subject to skyway robbery.
I knew Legend was in deep doo-doo when I saw them advertising 21 day advance purchase seats everywhere they fly (or flew).
Neither Herb nor Colleen really understand the secret to success in the airline business. And that is: provide the product that folks want at the price they are willing to pay (they probably know that) but manage to get profitable before you run out of money. Lamar Muse and the folks over at ValuJet managed to grasp that.....practically nobody else among new entrants believes it.
Instead of paying for luxurious terminal buildings and a lot of frou frou...Legend should have squeezed every penny til they shrieked.
And as far as the "first class service at full coach prices" genre...
When was the last time you flew
and the list goes on...
No, I have seen the future of the airline industry, and the future is not in carriers offering luxurious service. The future has a red belly, and ochre top, two engines, and a lot of bags of peanuts.
Sn330 From Belgium, joined Nov 2004, 16 posts, RR: 1
Reply 13, posted (14 years 10 months 1 week 6 days 6 hours ago) and read 2059 times:
$1 million a week!?!?!? No wonder why they are so close to bankruptcy. McArtor tried to make everything to nice, including the terminal and his planes, and look what happens. I doubt that they will last any longer. If I was an investor, I would definitely think twice about putting money to help raise capital for a airline that lost 1 million a week for 6 months, and when it suspended ops, had less than 200,000 dollars in its cash reserves.
TxAgKuwait is absolutely right. Establish yourself first using the tried and proven formula of deep discount fares, and then try the fancy gimicks.
Frontier could have done the same thing as Legend, but did they? no, they stuck to the Southwest formula, and now are a serious thorn in UA's side from Denver, and placed its first ever aircraft order just last year to update its fleet. Frontier will be around a long time, and you can say good riddance to Legend.
CactusA319 From United States of America, joined Jan 2000, 2918 posts, RR: 23
Reply 14, posted (14 years 10 months 1 week 6 days 6 hours ago) and read 2056 times:
You make very good points and I agree with you. But if what you said is 100% true, explain MidEx to me then. Apart from Legend's Exec. terminal and PTV's in each seat, both offer basically the same product. Midwest Express is going strong. Legend is obviously not. Could it be that Legends startup overhead (as Al mentioned) was too high for them to succeed?
Blink182 From United States of America, joined Oct 1999, 5496 posts, RR: 14
Reply 15, posted (14 years 10 months 1 week 6 days 6 hours ago) and read 2045 times:
Guys,keep in mind that Legend is temorarily out of business, I bet by march, they will be back in the skies. I think the private terminal is what screwed them up, they should have launched flights and then built the terminal, not vice-versa. I really think that Legend will eventually start flying again early next year. For a little comfort for the legend fans on this forum, LG's loads were higher than AA's out of DAL.
Give me a break, I created this username when I was a kid...
TxAgKuwait From United States of America, joined Aug 1999, 1803 posts, RR: 40
Reply 18, posted (14 years 10 months 1 week 5 days 23 hours ago) and read 1959 times:
Well, I'm glad you brought them up...Midwest Express is sort of a different breed of carrier.
You know they started as an adjunct to Kimberley-Clark's corporate aircraft fleet. I guess they figured they had to cart their own employees around...and it was cheaper to do it themselves and sell a few seats rather than pay prohibitive business fares.
They were fortunate that Milwaukee was not the hub for any carrier...in fact to get in and out of Milwaukee it almost seemed that you had to hop to Chicago O'Hare or Minneapolis/St Paul.
Midwest Express allocated some extra space for psgrs on their planes, granted. But they never eviscerated the capacity to the extent Legend did. 56 seats on a DC9-30 is roughly half the load that aircraft is capable of carrying.
Plus Midwest Express had the good fortune of being too small for anyone to want to put out of business. They managed to serve a niche nobody wanted in a part of the world most folks in the airline industry didn't care about.
It will be interesting to see...if we have another recession (and sooner or later we will) if the Frontier and Midwest Expresses of this world manage to survive. I'd say the jury is still out.
AA737-823 From United States of America, joined Mar 2000, 6174 posts, RR: 10
Reply 19, posted (14 years 10 months 1 week 5 days 23 hours ago) and read 1933 times:
Well, in response to the statement about a recession. I have thought for some months that the entire nation is headed toward an economic recession. I mean, fuel prices are skyrocketing. And the stock market, djia and nasdaq.
As many of you who read my trip report know, I love Legend. That is the greatest airline in the world. Those of you who criticise, I would hazard haven't flown on them. You can't tell me what I don't want; I WILL pay a little extra for luxury and the convenience of their terminal. I would also guess that those of you who diss have not been to Love Field or DFW recently. It's a mess. Legend's terminal is exactly what I want. And their flights are exactly what I want. And yes, I will pay more for that. And- NEWSFLASH- their walk up rates are not that much higher than anybody else's. All airlines rip off the poor souls who need a flight RIGHT NOW.
Legend is exactly what I have waited for.
But- I have tickets on Legend for DAL-IAD December 14, and the IAD-DAL Dec 19. I hope they are back in the sky by then, or I will be stuck on Delta or Continental. Someone mentioned March- ouch!!
The feeling I get is that this is a VERY temporary thing- the CEO makes it sound like they will be back in the air next week. I hope that's right.
The letter (go to www.legendairlines.com) says that if you have a ticket for beyond Dec 3 (Monday) NOT to go to the airport to get a Delta ticket.
Oh, by the way, now the American has what they want (who are you kidding, this is CrAAndal/CAArty's greatest triumph in the last five years, they've been fighting this one since 1996) guess who will purchase that terminal? I am betting my money on- you guessed it- AA. They could do exactly what Legend did- they already are, but are forced to use the old terminal. I look for a revitalized Love Field in the next ten years, with lots more traffic.
I sure hope they come back quickly, they are my favorite, and well worth the trouble.
Goingboeing From United States of America, joined Dec 1999, 4875 posts, RR: 15
Reply 20, posted (14 years 10 months 1 week 5 days 15 hours ago) and read 1910 times:
You raise a couple of interesting points in your previous post that actually point to the reason for Legends problems. First, you state:
<< I WILL pay a little extra for luxury and the convenience of their terminal >> followed by this statement: << But- I have tickets on Legend for DAL-IAD December 14, and the IAD-DAL Dec 19 >>
Keyword in your first statement is "little extra". The key point in your second statement is your travel dates - obviously an advance purchase ticket. Might I ask what fare you paid when you flew them? If AA,DL,or CO was offering $300 round trips and Legend was offering the same for $1,200 - would you still be willing to pay the difference. Their business plan assumed that you would. That's because their business plan was based on the assumption that they would cater to the FULL FARE passenger who would be paying in excess of $1,200 for those flights. The reality was that they were offering DAL-IAD service for $300. That isn't in their business plan, and it doesn't make them money. Nobody disputes that Legend was a great idea. What is disputed is whether or not they could turn a profit.
If their business plan was to fill 75% of 56 seats with passengers paying $1,200, they had a chance. They'd take in about $55,000 in revenue for those flights. The reality was that they faced stiff (and some might say unfair) competition and ended up flying 75% of 56 seats for $300 thats a $40,000 shortfall in revenues from the business plan. Ouch.