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Would Republic Purchase Another Regional?  
User currently offlineCrj200faguy From United States of America, joined May 2007, 400 posts, RR: 0
Posted (4 years 11 months 3 weeks 3 days 4 hours ago) and read 2246 times:

I know Republic doesn't have limitless cash, but what are the odds of them purchasing other regionals? I know in terms of fleet commonality it wouldn't make sense, but would they consider buying Pinnacle or Mesaba? Pinnacle has low operating costs and their stock is rather low. They own their 900s and they have a deal for at least 100 of their 124 CRJ200s until 2017. Any thoughts on why this would or wouldn't work?

11 replies: All unread, jump to last
 
User currently offlineJBo From Sweden, joined Jan 2005, 2312 posts, RR: 0
Reply 1, posted (4 years 11 months 3 weeks 3 days 4 hours ago) and read 2221 times:



Quoting Crj200faguy (Thread starter):
I know Republic doesn't have limitless cash, but what are the odds of them purchasing other regionals? I know in terms of fleet commonality it wouldn't make sense, but would they consider buying Pinnacle or Mesaba? Pinnacle has low operating costs and their stock is rather low. They own their 900s and they have a deal for at least 100 of their 124 CRJ200s until 2017. Any thoughts on why this would or wouldn't work?

I don't think you'll see Republic making any more acquisitions - except maybe Frontier - until they get Midwest turned around.



I'd take the awe of understanding over the awe of ignorance any day.
User currently offlineOswegobag From United States of America, joined Oct 2008, 169 posts, RR: 0
Reply 2, posted (4 years 11 months 2 weeks 5 days 6 hours ago) and read 1996 times:

Republic's stock is very low also.. I would not be surprised if someone tries to buy them out.... but then again, it was also a defensive move to purchase Midwest because I do not think another regional would have the "know how" to integrate Midwest successfully if they purchased Republic.

User currently offlineFlyby519 From United States of America, joined Jul 2007, 1124 posts, RR: 0
Reply 3, posted (4 years 11 months 2 weeks 5 days 6 hours ago) and read 1987 times:

I doubt Republic would be interested in any regional carriers, they seem to be moving away from the contract flying and attempting to get into their own brand (Midwest or Frontier). A question I have is will any mainline carriers be hesitant to contract with Republic in the future since they will be a direct competitor? Might be a ripe time for another regional to start flying E170s and take their business.


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User currently offlineFlyASAGuy2005 From United States of America, joined Sep 2007, 7004 posts, RR: 11
Reply 4, posted (4 years 11 months 2 weeks 5 days 6 hours ago) and read 1981 times:



Quoting Flyby519 (Reply 3):

Me thinks a lot of contracts will be voided. There are many clauses in that if a regional operates anything above the mainline carrier's scope, that will be the end of the connection service. I'm not well versed in this area but I do believe this will be the case. Then again, they are end arounds because they have different operating certificates so who knows.



What gets measured gets done.
User currently offlineFWAERJ From United States of America, joined Jun 2006, 3716 posts, RR: 2
Reply 5, posted (4 years 11 months 2 weeks 5 days 6 hours ago) and read 1957 times:

I was just thinking about this the other day: If AA tries to sell Eagle again to raise cash, I could see Republic making a play.

Both operate ERJs, and RP already operates for AA as AmericanConnection, so it would be a good fit. Only problem is if the APA will even let AA selll Eagle given their stance on scope clauses, pay, and everything else.

[Edited 2009-08-08 11:56:16]


I don't work for FWA, their tenants, or their ad agency. But I still love FWA.
User currently offlineFlyby519 From United States of America, joined Jul 2007, 1124 posts, RR: 0
Reply 6, posted (4 years 11 months 2 weeks 5 days 1 hour ago) and read 1882 times:



Quoting FWAERJ (Reply 5):
I was just thinking about this the other day: If AA tries to sell Eagle again to raise cash, I could see Republic making a play.

Both operate ERJs, and RP already operates for AA as AmericanConnection, so it would be a good fit. Only problem is if the APA will even let AA selll Eagle given their stance on scope clauses, pay, and everything else.

Republic was interested in buying Eagle in the past when it was up for sale, but when they found out all the strings AMR wanted to attach they backed out. I am sure APA would loooove to have Eagle sold off. APA doesn't like Eagle at all and considers them a financial drain on AMR. I doubt RP would still be interested in Eagle, since they seem more occupied with buying established independent carriers (F9 YX).



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User currently offlineF9Animal From United States of America, joined Dec 2004, 4985 posts, RR: 28
Reply 7, posted (4 years 11 months 2 weeks 5 days 1 hour ago) and read 1880 times:

I would not be surprised if Republic made a bid for Mesa. I think it would be a wise move, and really be a good thing for Mesa employees.


I Am A Different Animal!!
User currently offlineJBo From Sweden, joined Jan 2005, 2312 posts, RR: 0
Reply 8, posted (4 years 11 months 2 weeks 4 days 23 hours ago) and read 1833 times:



Quoting FlyASAGuy2005 (Reply 4):
Me thinks a lot of contracts will be voided. There are many clauses in that if a regional operates anything above the mainline carrier's scope, that will be the end of the connection service. I'm not well versed in this area but I do believe this will be the case. Then again, they are end arounds because they have different operating certificates so who knows.

Depends on the language in the contracts. The reason RAH had three separate carriers to begin with is due to scope clauses. Seeing as the current three companies technically compete with each other and even themselves between the different companies they fly for, I don't think there is any language in their contracts that would conflict with Republic's ownership of Midwest.

Republic intends on making Midwest a profitable carrier on its own, so as long as the outside regional contracts aren't "subsidizing" Midwest, none of the mainline carriers should object.



I'd take the awe of understanding over the awe of ignorance any day.
User currently offlineLHCVG From United States of America, joined May 2009, 1541 posts, RR: 1
Reply 9, posted (4 years 11 months 2 weeks 4 days 22 hours ago) and read 1803 times:

So am I to understand that RP is trying to (eventually) get out of the connection business and become a full-scale airline to as much a degree as possible? Taken to the logical extreme, might they even sell of Shuttle America, CHQ and Freedom(I think thats the other one, corerct me if I am wrong here) so "Republic Airways" could exist as it's own brand with F9 and YX?

User currently offlineOzarkD9S From United States of America, joined Oct 2001, 4995 posts, RR: 21
Reply 10, posted (4 years 11 months 2 weeks 4 days 20 hours ago) and read 1759 times:



Quoting LHCVG (Reply 9):


So am I to understand that RP is trying to (eventually) get out of the connection business and become a full-scale airline to as much a degree as possible? Taken to the logical extreme, might they even sell of Shuttle America, CHQ and Freedom(I think thats the other one, corerct me if I am wrong here) so "Republic Airways" could exist as it's own brand with F9 and YX?

Right now their only stated strategy is "diversification". Whether they're actually trying to become a stand alone mainline/regional with their own brand or just buying up whatever looks good in the portfolio remains to be seen.

Personally, I hope they succeed in buying F9 and eventually merging it with YX, as well as maintaining contract work for other carriers, though as has been pointed out, scope clauses are gonna be a thorny issue for them down the road.

With the (relatively) recent losses of HP (or US, depending on how you look at it) and NW, I would love to see another major US carrier in the skies.



Next Up: STL-LGA-RIC-ATL-STL
User currently offlineMariner From New Zealand, joined Nov 2001, 24996 posts, RR: 85
Reply 11, posted (4 years 11 months 2 weeks 4 days 20 hours ago) and read 1752 times:
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Quoting LHCVG (Reply 9):
So am I to understand that RP is trying to (eventually) get out of the connection business and become a full-scale airline to as much a degree as possible?

I doubt that. As OzarkD9S says they are diversifying.

The contract flying makes good revenue streams, but presently their only one (absent Midwest).

If they get Frontier - and if Frontier continues on its present profitable way - that will bring a lot of money a year into Republic's coffers.

If they can do the same turnaround at Midwest as has been done at Frontier, they're laughing all the way to the bank.

mariner



aeternum nauta
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