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My Plan To Restructure Comair  
User currently offlineJA From United States of America, joined Dec 2004, 574 posts, RR: 1
Posted (2 years 1 month 1 week 3 days 16 hours ago) and read 11186 times:

It is my personal belief that Comair can be restructured into a viable point to point operation supporting the Delta network. There are several markets that could benefit from the type of S-curve effect that a new Comair could provide. In addition, a point to point structure (operations that are heavily O/D based) would support the kind of cost structure that is the new reality for 50 seat aircraft. As part of this new business model, I would propose a reduction in seating capacity from 50 seats to 46 seats as numerous markets currently take some sort of penalty above 46 seats. Comair would continue to fly under a codeshare agreement with Delta.

The new Comair would continue to use the current 21 aircraft and would also take on 41 Delta owned aircraft from Skywest. As the former Skywest aircraft come in, other CRJ200s with viable medium term value (let's say 5 years) would receive an engine overhaul. Allegedly, all of the Comair aircraft and half of the Skywest aircraft will need both engines overhauled before 2015 at a cost of $2M per airplane. I can certainly see why Delta would park the aircraft first, but there are other options.

In my sketch of what a restructured Comair would look like, I decided to focus on several focus cities that offer the largest potential for point to point operations. This includes STL, PIT, BNA, and MSY. In addition, a new BWI focus city would be opened to focus on connecting the DC area with numerous medium sized business markets. There are also opportunities to be opportunistic in this environment with regards to flying EAS and SCASD markets where sensible.

The following markets would be flown:

To/From STL 2x daily: SDF, LIT, MKE, OKC, JAX, BHM, BNA, AUS, CMH
To/From STL 3x daily: MSY, SAT, OMA, RDU, MCI

To/From PIT 2x daily: ALB, RDU, ORF, MEM, BNA

To/From BNA 2x daily: GSP, OKC, BUF, RIC, RSW, CHS
To/From BNA 3x daily: JAX, MSY, AUS
To/From BNA 4x daily: MCI, RDU

To/From MSY 2x daily: JAX, BHM, IND, SAT, AUS, TUL, OKC

To/From BWI 2x daily: RSW, JAX
To/From BWI 3x daily: ALB, BOS, BUF, CLE, BDL, IND, BNA, MSY, PIT, PBI, PVD
To/From BWI 4x daily: STL
To/From BWI 6x daily: MDW

EAS flying 2x daily: PDT-SLC, JBR-ATL, DEC-DTW, BRL-DTW, HGR-DTW, LNS-DTW, MKL-DTW, VCT-MEM, MCN-ATL


Before mentioning ExpressJet or Independence Air, remember that Comair had a codesharing relationship with Delta as an independent airline. It is more helpful when flying thin point to point markets to have a large hub and spoke network to support you. That way, customers can fly one way on the nonstop and make a connection on the way back.

95 replies: All unread, showing first 25:
 
User currently offlinerampart From United States of America, joined Aug 2005, 3147 posts, RR: 6
Reply 1, posted (2 years 1 month 1 week 3 days 16 hours ago) and read 11168 times:

I like it.

I will mention ExpressJet, but in a positive way. At least 1/3 of ExpressJet in their stand-alone venture was very successful. Are you saying that the DL code-share in place would be enough to float the remaining 2/3?

Second, how would you handle direct and probably fierce competition from WN, in STL, BNA, MSY, and BWI?

-Rampart


User currently offlinePolot From United States of America, joined Jul 2011, 2261 posts, RR: 1
Reply 2, posted (2 years 1 month 1 week 3 days 16 hours ago) and read 11128 times:

Quoting JA (Thread starter):
This includes STL, PIT, BNA, and MSY. In addition, a new BWI focus city would be opened to focus on connecting the DC area with numerous medium sized business markets.

So..you want this new Comair to just be destroyed by WN?

Quoting JA (Thread starter):
Before mentioning ExpressJet or Independence Air, remember that Comair had a codesharing relationship with Delta as an independent airline.

When? Comair has been wholly owned by Delta since 1999, and DL has had a financial stake in them since 1986. Comair hasn't been an independent airline in a long time. If you are talking about this theoretical airline and are using the past tense by mistake, why would DL codeshare with this airline versus putting its passengers on its planes and routing them through their hubs, collecting all of the revenue?


User currently offlineMir From United States of America, joined Jan 2004, 21701 posts, RR: 55
Reply 3, posted (2 years 1 month 1 week 3 days 16 hours ago) and read 11092 times:

Quoting rampart (Reply 1):
Second, how would you handle direct and probably fierce competition from WN, in STL, BNA, MSY, and BWI?

And that's the real problem with this proposal - every focus city is a WN stronghold (maybe not MSY, but that still leaves three). You'd have to shoot for some markets that don't have a carrier like that, but unfortunately WN is pretty big in all of them.

-Mir



7 billion, one nation, imagination...it's a beautiful day
User currently offlineusflyer msp From United States of America, joined May 2000, 2138 posts, RR: 0
Reply 4, posted (2 years 1 month 1 week 3 days 16 hours ago) and read 11080 times:

I don't see the point? Most of those markets are precisely the type of markets that 50-seat RJ economics do not work on - medium sized markets with LCC competition.

User currently offlineEricR From United States of America, joined Jul 2010, 1904 posts, RR: 1
Reply 5, posted (2 years 1 month 1 week 3 days 16 hours ago) and read 11021 times:

Would not work. WN has the pricing power (and frequency) in these cities (STL, BWI, BNA). The only way Comair could penetrate is via low fares, but I don't see how that could financially work considering those RJs would not be very cost effective against WN's 73s.

User currently offlinexjramper From United States of America, joined Dec 2003, 2462 posts, RR: 51
Reply 6, posted (2 years 1 month 1 week 3 days 15 hours ago) and read 10919 times:

The biggest flaw with this plan is that Delta is going to be done with all 50-seat jet flying here soon regardless of what you want to spin OH into. IIRC, FL utilized ZW CR2s a few years back to cover some of the thin markets that just couldn't sustain 717 flying, and after a while, FL realized that they could fly an almost empty 717 and lose less money than they would flying a full CR2, which is why they cut that service. They tried it again with OO and their contract with OO was terminated prematurely, although I suspect that had something to do with the WN takeover but money loss was a definite factor as well.

Secondly, DL has tried variations to P2P flying and EAS flying and it just isn't lucrative. Certain non-hub cities have some P2P routes, but mostly they have cut those routes way back.

Thirdly, as others have pointed out, WN would crush the already money-loss CR2s.

So what was the question again?



Look ma' no hands!
User currently offlineDeltaMD90 From United States of America, joined Apr 2008, 7931 posts, RR: 52
Reply 7, posted (2 years 1 month 1 week 3 days 15 hours ago) and read 10916 times:

I know we'd all love to see Comair stay, but we're thinking in the wrong mindset here... Delta is a business. The easiest and cheapest way to reduce costs at OH is to shut them down and transfer their assets to OO. I hate it too but that's the way it's gonna be. If you could find a plan (and quickly) that is more cost effective than Delta's plan, shoot it their way and I'm sure it'll be implemented. Delta didn't get this far by being a charity.

Plus, I don't see how deploying inefficient 46/50 seaters on WN routes without much feed would solve anything. That's probably the worst thing OH (DL) can do

[Edited 2012-09-15 09:12:20]


Ironically I have never flown a Delta MD-90 :)
User currently offlineseabosdca From United States of America, joined Sep 2007, 5620 posts, RR: 6
Reply 8, posted (2 years 1 month 1 week 3 days 15 hours ago) and read 10893 times:

Quoting JA (Thread starter):
It is my personal belief that Comair can be restructured into a viable point to point operation supporting the Delta network.

I think no matter how much clever network design you try to do, you can't build a comprehensive network that works today with 50-seaters. They are now a niche tool, suitable only for a few markets that 1) have meaningful business traffic but 2) are too thin to attract LCCs or legacy mainline. As has been pointed out already, many of your proposed routes have LCC competition, and a few more have mainline legacy competition.

Also, I should just point out:

Quoting JA (Thread starter):
In addition, a new BWI focus city would be opened to focus on connecting the DC area with numerous medium sized business markets.

Business travelers out of DC will not use BWI in any great numbers. It's too far away from the center of gravity of business in DC, which is between the western half of the District and Northern Virginia.


User currently offlinestrfyr51 From United States of America, joined Apr 2012, 1304 posts, RR: 1
Reply 9, posted (2 years 1 month 1 week 3 days 14 hours ago) and read 10746 times:
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This is pretty much a dead issue, DELTA hasn't the SLIGHTEST interest in saving comair and they own them AND the leases on their airplanes... Comair's days were numbered after the. Last pilots strike. UAL bought,cut up and flushed Air Wisconsin in the same manner in the previous decade. Maybe you armchair CEO's might want to do more research. The demise of the regionals was a foregone conclusion once they hopped lustily in to bed with the majors. Before all of this incestuous behavior began. Regionals had their own CSR, reservations,ground handling and catering staffs. they shed all of that to becomes indentured slaves. And NOW?? Slavery has run it's course and regionals are summarily being tossed on the scrap heaps.. They should return to the previous arms length partnerships. And again live or DIE on their OWN merit and Business plan..

User currently offlineseabosdca From United States of America, joined Sep 2007, 5620 posts, RR: 6
Reply 10, posted (2 years 1 month 1 week 3 days 14 hours ago) and read 10693 times:

Quoting strfyr51 (Reply 9):
They should return to the previous arms length partnerships. And again live or DIE on their OWN merit and Business plan..

It's not about how independent they are from the majors (although without the majors' customer-facing systems they'd quickly be dead in the water today). It's about the fact that 50-seat jets just don't work in today's economic environment, no matter who's flying them. Even 70-seaters are in jeopardy.


User currently onlinePHX787 From Japan, joined Mar 2012, 7766 posts, RR: 18
Reply 11, posted (2 years 1 month 1 week 3 days 12 hours ago) and read 10590 times:

Quoting Polot (Reply 2):
Quoting JA (Thread starter):
This includes STL, PIT, BNA, and MSY. In addition, a new BWI focus city would be opened to focus on connecting the DC area with numerous medium sized business markets.

So..you want this new Comair to just be destroyed by WN?

   Exactly. The only reason OH survived this long is because WN never wanted to touch their home turf- CVG. CVG was the main fortress for OH and their relationship (rocky, albeit) with DL is what made OH survive this long, until the apparent inevitable happened.



我思うゆえに我あり。(Jap. 'I think, therefore I am.')
User currently offlineflyby519 From United States of America, joined Jul 2007, 1183 posts, RR: 0
Reply 12, posted (2 years 1 month 1 week 3 days 11 hours ago) and read 10480 times:

I think the 50seat CRJs would have a better chance being turned into all-first class, maybe 15-20seats total, and flown between big O&D markets like JFK-MIA, JFK-LAX (if they have the range?), LGA-ORD, etc and keep the codeshare with DL.


These postings or comments are not a company-sponsored source of communication.
User currently onlinePHX787 From Japan, joined Mar 2012, 7766 posts, RR: 18
Reply 13, posted (2 years 1 month 1 week 3 days 11 hours ago) and read 10453 times:

Quoting flyby519 (Reply 12):
JFK-LAX (if they have the range?)

Unless you put extra fuel tanks inside them I don't think they'd have the range



我思うゆえに我あり。(Jap. 'I think, therefore I am.')
User currently offlineAA94 From United States of America, joined Aug 2011, 603 posts, RR: 2
Reply 14, posted (2 years 1 month 1 week 3 days 9 hours ago) and read 10037 times:

Quoting seabosdca (Reply 8):
Business travelers out of DC will not use BWI in any great numbers. It's too far away from the center of gravity of business in DC, which is between the western half of the District and Northern Virginia.

  

I love BWI, it's a great medium-sized airport, but it's primary clientele is not business travelers. It's a perfect airport for leisure travel, hence why WN carries ~55% of passengers who pass through there.

DCA is usually the go-to for businessmen in the city.



Choose a challenge over competence / Eleanor Roosevelt
User currently offlineHOMsAR From United States of America, joined Jan 2010, 1189 posts, RR: 0
Reply 15, posted (2 years 1 month 1 week 3 days 9 hours ago) and read 10018 times:

Quoting flyby519 (Reply 12):
I think the 50seat CRJs would have a better chance being turned into all-first class, maybe 15-20seats total, and flown between big O&D markets like JFK-MIA, JFK-LAX (if they have the range?), LGA-ORD, etc and keep the codeshare with DL.

At that point, you might as well cut 10 more seats out of them and call them business jets.



I was raised by a cup of coffee.
User currently offlineLHCVG From United States of America, joined May 2009, 1605 posts, RR: 2
Reply 16, posted (2 years 1 month 1 week 3 days 9 hours ago) and read 9882 times:

Quoting HOMsAR (Reply 15):
At that point, you might as well cut 10 more seats out of them and call them business jets.

  

The only way you'll see premium RJ service is if someone else buys the CRJ-705, or configs an E-Jet in a similar manner. I believe AC is the only current customer for those, and even then they are more akin to PS as they still have Y, rather than all F. A route like LGA-ORD could probably work with an all-F large RJ, but then you get to the point where you're better off just throwing a 757 or 321 on the route to get the same number of F pax plus all the rest. But you'd certainly never see that on a 50 seater due to the economics, and plus anyone paying the premium for that flight wouldn't be cool with the low windows on a CRJ.


User currently offlineBobloblaw From United States of America, joined Jan 2012, 1725 posts, RR: 1
Reply 17, posted (2 years 1 month 1 week 3 days 8 hours ago) and read 9551 times:

Quoting JA (Thread starter):
It is my personal belief that Comair can be restructured into a viable point to point operation supporting the Delta network.

There is too much 50 seat capacity.

Quoting JA (Thread starter):
The following markets would be flown:

Ever hear of ExpressJet??? 50 seat point to point doesnt work, period. Plus there is no way Delta would ever agree to a capacity buy in these markets.

Quoting JA (Thread starter):

To/From BWI 2x daily: RSW, JAX
To/From BWI 3x daily: ALB, BOS, BUF, CLE, BDL, IND, BNA, MSY, PIT, PBI, PVD
To/From BWI 4x daily: STL
To/From BWI 6x daily: MDW

Why in the world do you want 50 seat CRJs to compete with WN????


User currently offlinefwa2500 From United States of America, joined Feb 2005, 105 posts, RR: 0
Reply 18, posted (2 years 1 month 1 week 3 days 4 hours ago) and read 7645 times:

As much as i wish we werent closing down, there its no turning back now. Delta could have forced a drastic restructure if they wanted, but they didnt, which is why were are now less than two weeks from ceasing ops permanently.


ex-OH@CVG
User currently offlineJA From United States of America, joined Dec 2004, 574 posts, RR: 1
Reply 19, posted (2 years 1 month 1 week 3 days 4 hours ago) and read 7319 times:

Quoting rampart (Reply 1):
Second, how would you handle direct and probably fierce competition from WN, in STL, BNA, MSY, and BWI?
Quoting Mir (Reply 3):
And that's the real problem with this proposal - every focus city is a WN stronghold (maybe not MSY, but that still leaves three). You'd have to shoot for some markets that don't have a carrier like that, but unfortunately WN is pretty big in all of them.
Quoting usflyer msp (Reply 4):
I don't see the point? Most of those markets are precisely the type of markets that 50-seat RJ economics do not work on - medium sized markets with LCC competition.

Has anyone done the math regarding 50 seaters? The system cost (all in) is around $3,000 per hour. That is around $65 per hour per seat in a 46 seat configuration. Has anyone seen the WN fares lately? More than 50% of the WN fares being sold work on an RJ. The idea that RJs would get creamed by WN is ridiculous. Rather, you let WN fill up on low fares until you reach the RJ break even number and then you match them from there.

17% of WN customers buy full fares. This is an indication that there are a LOT of business travelers on WN.

I'll use STL-BHM as an example. The seat cost is $71.74 for this route on an RJ in this direction. My estimate is that WN is 39% less per seat on the sector. Here is the fare distribution for direct flights on WN from FlightAware:

Minimum: $50.76
Median: $138.99
Maximum: $271.99

Minimum to Median is 50% of the tickets sold. Median to Maximum is the other 50%.

Mathematically, I would be fine competing with more than 50% of WN's nonstop tickets. WN can continue to set the pricing and I would engage them somewhere below the median.

Quoting rampart (Reply 1):
Second, how would you handle direct and probably fierce competition from WN, in STL, BNA, MSY, and BWI?

It's not a problem to have WN set the price. The profit/loss estimates assume that these routes would ignore the first 30% of the WN fare structure and adopt the rest. WN is not cheap anymore. They target the business traveler intensely. WN's network is essentially a web, with nodes in key medium and large business centers as well as leisure points. Many cities double as both. DL has so many hubs that the implementation of point to point operations by OH would essentially make the DL network a web in the East. DL has corporate contracts, so being able to minimize overnight stays is a top priority. Point to point service can speed thousands of trips by giving people a nonstop on at least one side. Even if they have to go through the hub on the other, that is more business to DL.

Quoting AA94 (Reply 14):
I love BWI, it's a great medium-sized airport, but it's primary clientele is not business travelers. It's a perfect airport for leisure travel, hence why WN carries ~55% of passengers who pass through there.

DCA is usually the go-to for businessmen in the city.

DCA has rail access. The Metro is a big part of why DCA is the preferred airport. Everyone cannot fly through DCA (even if the perimeter restrictions are lifted). The BWI plan would include a plan to put in premium rail service every 20-30 minutes directly to Union Station and New Carrollton. Amtrak does the trip in 22 minutes. Two train sets would make a 30 minute schedule. MARC would operate it at a premium fare (about $10-12). It isn't that hard to do, particularly outside the peak rush hour. During rush hour, there are tons of trains already.

Quoting DeltaMD90 (Reply 7):
I know we'd all love to see Comair stay, but we're thinking in the wrong mindset here... Delta is a business. The easiest and cheapest way to reduce costs at OH is to shut them down and transfer their assets to OO. I hate it too but that's the way it's gonna be. If you could find a plan (and quickly) that is more cost effective than Delta's plan, shoot it their way and I'm sure it'll be implemented. Delta didn't get this far by being a charity.

Plus, I don't see how deploying inefficient 46/50 seaters on WN routes without much feed would solve anything. That's probably the worst thing OH (DL) can do

This isn't about keeping Comair's big birds. Those are already gone. The idea here is to take premium traffic from WN. DL likes premium traffic and the premium flyers are generally more time sensitive. WN is not the Borg to DL. They already know that WN's pricing is substantially higher than an FL or a B6. Premium travelers on WN aren't flying for price. They are flying for TIME. Save them time and they will bring you cash.

Delta isn't a charity. They will have to replace engines on the entire OH CR2 fleet by 2015 and more than half of the DL owned OO fleet by the same time. In addition, DL has to NEGOTIATE the modification of contracts with other carriers. They do not have to do so with OH. You eat the low hanging fruit to give you the energy to climb the tree and deal with the highest fruit. However, the market rate for leasing CRJ200s is $30,000 per month. The 21 50 seaters at OH would yield $7.5M in lease revenue. In addition, I have proposed bringing 41 DL owned frames from OO to OH that they have both agreed to remove. That is another $14.7M in lease revenue. In addition, they are no longer responsible for replacing engines on the aircraft. So, they will still save $82M between now and 2015 by not replacing engines. It is going to cost some money to close down OH. So, you can spend money to close the carrier or you can collect $22M per year for at least another 2-5 years until the aircraft are replaced. We haven't even discussed the potential S-curve effects yet.


User currently offlineDeltaMD90 From United States of America, joined Apr 2008, 7931 posts, RR: 52
Reply 20, posted (2 years 1 month 1 week 3 days 4 hours ago) and read 7257 times:

Quoting JA (Reply 19):

I don't know what to tell you, the fact that real airlines are moving away from 50 seaters tells me that your assumption is wrong/mostly wrong. If some person on A.net finds a way for an airline to make tons of money, odds are that it's already been thought of (and dismissed.) Legacy spin offs have always done horribly going against LCCs... Song, DLX, Metrojet, Ted, etc so what makes some inefficient 50 seaters special?



Ironically I have never flown a Delta MD-90 :)
User currently offlineJA From United States of America, joined Dec 2004, 574 posts, RR: 1
Reply 21, posted (2 years 1 month 1 week 3 days 4 hours ago) and read 7176 times:

Quoting fwa2500 (Reply 18):
As much as i wish we werent closing down, there its no turning back now. Delta could have forced a drastic restructure if they wanted, but they didnt, which is why were are now less than two weeks from ceasing ops permanently.

You may be right, but I have actually contacted DL about Comair. Granted, I didn't go into this detail (and there are small, but important pieces missing here), but the absolute worst thing they can say is no. There is a difference between buying a carrier and assuming a feed contract and buying a carrier and operating completely at-risk. I would estimate that the likelihood of this happening is 30% and that is enough to put time and effort into.


User currently offlineDeltaMD90 From United States of America, joined Apr 2008, 7931 posts, RR: 52
Reply 22, posted (2 years 1 month 1 week 3 days 3 hours ago) and read 6957 times:

Quoting JA (Reply 21):
I have actually contacted DL about Comair

Well touche, I give you credit for at least trying. I think 30% is extremely high but if you do save OH, I'll buy you a beer   



Ironically I have never flown a Delta MD-90 :)
User currently offlineJA From United States of America, joined Dec 2004, 574 posts, RR: 1
Reply 23, posted (2 years 1 month 1 week 3 days 3 hours ago) and read 6889 times:

Quoting DeltaMD90 (Reply 20):
I don't know what to tell you, the fact that real airlines are moving away from 50 seaters tells me that your assumption is wrong/mostly wrong. If some person on A.net finds a way for an airline to make tons of money, odds are that it's already been thought of (and dismissed.) Legacy spin offs have always done horribly going against LCCs... Song, DLX, Metrojet, Ted, etc so what makes some inefficient 50 seaters special?

Some good quotes about the airline business:

These days no one can make money on the goddamn airline business. The economics represent sheer hell.
— C. R. Smith, President of American Airlines.

A recession is when you have to tighten your belt; depression is when you have no belt to tighten. When you've lost your trousers - you're in the airline business.
— Sir Adam Thomson

The worst sort of business is one that grows rapidly, requires significant capital to engender the growth, and then earns little or no money. Think airlines. Here a durable competitive advantage has proven elusive ever since the days of the Wright Brothers. Indeed, if a farsighted capitalist had been present at Kitty Hawk, he would have done his successors a huge favor by shooting Orville down.
— Warren Buffett, annual letter to Berkshire Hathaway shareholders, February 2008


As of 1992, in fact—though the picture would have improved since then—the money that had been made since the dawn of aviation by all of this country's airline companies was zero. Absolutely zero.
— Warren Buffett, billionaire investor, interview 1999.


Why all of these quotes? Airline management is conservative and reactive. We take JetBlue's existence for granted now, but look at this quote from an industry professional:

I don't think JetBlue has a better chance of being profitable than 100 other predecessors with new airplanes, new employees, low fares, all touchy-feely ... all of them are losers. Most of these guys are smoking ragweed.
— Gordon Bethune, Continental Airlines CEO, Time magazine, June 2002.


JetBlue "broke the glass" in some respects and did what other people were doing better in many other respects. Allegiant also "broke the glass" with regards to its business model and continues to outperform its peers by picking up the business that was ALWAYS THERE. Now, there are lots of CEOs claiming that they cannot support 50 seaters and in their current structure, they are correct. Several airlines have tried exclusively point to point and destroyed themselves. Song, DLX, MetroJet, and Ted were all airlines within an airline using large aircraft. Are you really going to kill yourself?  

The closest thing to a fused hub & point to point structure is WN. WN has the highest large aircraft unit costs in the industry and they are STILL making money. There is a reason for that. They offer lots of nonstops in their web structure. They have reasonable fares which are high enough to make money. Their marketing is excellent. However, their reach is limited. This is where the DL network (and other legacy networks) maintain their advantage. A 50 seat aircraft is the right size to do point to point flying. In fact, even an ER3(!) can make money flying point to point. Since everyone is scared to fly against WN and even more scared to take the 50 seaters point to point to augment their hubs, it makes it cheaper for OH to do this. The price of the planes get forced down and you get ignored just long enough to get your feet set.

It is my hope that no one figures out that I am right except for DL. It would make my life much easier.


User currently offlineerj170 From United States of America, joined Apr 2004, 6776 posts, RR: 17
Reply 24, posted (2 years 1 month 1 week 3 days 3 hours ago) and read 6866 times:

Available P2P from RDU which should be profitable which Comair could look to do at-risk:

MSY 2x --> 4x
BDA 1x --> 2x
YUL 1x --> 2x
JAX 2x --> 3x
MCI 2x --> 3x
BUF 2x --> 3x
HPN 2x --> 4x
ISP 2x --> 3x
CHS 1x --> 2x



Aiming High and going far..
25 slcdeltarumd11 : I would say their best bet is to seek EAS or airports with large subsidies. That would certainly help the economics of fuel. Smaller would probably be
26 DeltaMD90 : Problem is Comair can't do it "at-risk" as they ARE Delta Well you are right in saying new strategies pop up, but I really don't see how 1: using 50
27 seabosdca : First, it's still no DCA. From the airport, you have to get on a crowded bus and ride 10-12 minutes even to get to the train station, and then you en
28 JA : MSY, JAX, MCI, BUF are on my list. I haven't run these markets in my profit/loss spreadsheet yet, but I'll get to them. YUL is interesting, as is HPN
29 JA : MARC would make money at $10 per passenger. I don't claim DCA is good enough for everyone, but there is lots of business traffic that is going throug
30 Post contains images PHX787 : I would like to know what they said. Also I would like to point out this: Comair is a Cincinnati airline. There's no way THEIR brass is gonna want to
31 xdlx : With all due respect..... OH is a success story for commuter-regional airline. Its demise is directly related to SCOPE & the inability to secure 7
32 Post contains images JA : Delta is operating a few miles from home as well. Don't those folks hate New York?
33 Polot : So assuming that every Comair flight is full and every passenger is using MARC that is only $500 a plane...no where near enough to support new trains
34 FlyPNS1 : Even if the economics of your plan worked (and I don't think they do), you are ignoring a few other factors. Business travelers HATE the CRJ200. They
35 Bobloblaw : Clearly youve done a lot of research.
36 toltommy : I believe this "plan" would leave the new Comair with even higher costs. The only employees left now are the most expensive, most senior. Passengers
37 Goldenshield : It was 100% to do with the WN takeover. If there was any money to lose, it was OO's. Mum's the word on the financials on that operation, but manageme
38 HOMsAR : If CRJs are so cheap to operate that you could make a profit charging fares starting at just over $65/hour/seat, then why aren't existing regional ai
39 PHX787 : Well most of us were a little peeved to see service moved from here to NYC
40 Post contains links JA : You would have to make the case that WN's network is better than DL's network (as OH would be codesharing with DL). I would disagree with you. You wo
41 Polot : So why would Delta go through all this trouble just to keep Comair alive? Why take the planes from Skywest and give them to Comair when they can just
42 usflyer msp : A 30% fare cut is very easy to justify if it means getting rid of your competition. Your entire business proposition seems to based upon some fiction
43 steex : Could you provide a breakdown of what these costs include? I'm just curious where the number comes from as I've certainly not done the research that
44 JA : Amtrak operates the Penn Line under contract. They would try to fit it in. The chokepoint is actually Union Station itself. It isn't a matter of "sim
45 Polot : Well where are they? There are several airlines who would love to have them. People are quickly turning their back on the MD-80 too...don't forget Al
46 JA : Who said anything about DL doing this? I am proposing that an independent Comair do this. NYC is a bigger market. The swap was a no brainer. Life is
47 Polot : You did. In fact in your very first post you suggest OH take Delta owned CRJs from Skywest. You are also trying to argue that this new Comair will be
48 usflyer msp : Huh?
49 JA : People have turned their back on the MD-80 for 10 years now. How do you think Allegiant got theirs at the price they got them? No plane lasts forever
50 JA : Correct, because those planes would otherwise be parked. I did not say that DL would actually continue to run OH. I have been clear that this would b
51 steex : Keep in mind you wouldn't be saving people time, though. You'll be competing head-to-head with WN on routes they also do non-stop, so you need to dif
52 DeltaMD90 : It is DL doing this because OH is DL. If DL frees OH from itself then DL essentially loses a part of itself, the other part which will crash and burn
53 Polot : Actually in pro-rate flying DL would get no cut, the regional airline pays all the costs and gets all the operating income. That is why it is pro-rat
54 JA : Would you pay DL for instant visibility? I certainly would.
55 Polot : So now is this "independent" Comair is flying with Delta branding (under the connection banner). How are they different from Skywest, ASA, Republic e
56 JA : Please provide us with an example of a 50 seat point to point operation with a major carrier codeshare that failed while still under that codeshare.
57 DeltaMD90 : ExpressJet was a full fledged failure and didn't really surprise anyone. DL has tried this at MCO, RDU, LAX, and MIA to name a few.
58 Polot : EXACTLY! That is what I have wanted you to say for the past hour. Now you have to explain to us why this independent Comair would be better than what
59 Post contains images steex : Well, I wouldn't try to operate 46-seat regional jets in head-to-head competition as an upstart niche operator against WN, so I'm probably not the ri
60 Post contains links JA : DL owns 41 of the 66 Skywest CRJ200s being withdrawn from service: http://www.aviationweek.com/awmobile.../avd_08_03_2012_p01-01-482925.xml. Instead
61 usflyer msp : AA @ RDU & BOS US @ LGA & BOS DL/NW @ LAX, MCO, TPA, MKE, IND, STL, RDU UA @ SAT I suggest you take a close look at the Trans States/UA exper
62 DeltaMD90 : Then you shouldn't be writing to DL. You should be writing to investors that are willing to buy/lease these CRJs and do your plan. I'm sure DL has 0
63 Post contains images Polot : Its not like the OH shut down came as some huge surprise. DL has been trying to unload OH for years but no one was biting.
64 JA : Since you seem to understand what I am trying to do (even though you are skeptical), I am grateful for that. Everyone else would want DL to guarantee
65 Polot : Not exactly the most reassuring comment. You are saying we shouldn't fear a competitive response...and then give us plenty of examples of flying that
66 steex : In fairness, I don't believe anyone thinks that there will be a nuclear response, you're adding that hyperbole. However, I'd expect those people's re
67 JA : Who owns the certificate? Who needs to preserve the certificate in order for it to be worth anything? Who would be in charge of authorizing pro-rate
68 Polot : Yes. But then are going to tell you "show me the money and it is all yours." So unless you personally have enough money to buy and maintain the certi
69 usflyer msp : I would agree that you shouldn't be afraid of competitive responses but simply ignoring it in your initial calculations gives a skewed view of your c
70 JA : Absolutely. There are people who say that WN's competitive response would kill the operation. History shows that the competitive response has NOT bee
71 DeltaMD90 : And how did the other airlines that didn't fly just a bunch of independent 50 seaters P2P fare? Why was ExpressJet the only to fail? I can't remember
72 DeltaMD90 : Tell that to Frontier. It doesn't help that you're already starting at a competitive disadvantage using CRJ-200s (which you still haven't shown the n
73 usflyer msp : DL @ LGA is no longer a point-to-point operation...it is a full scale hub and even then DL's operation is far less dependent upon 50-seat RJ's than U
74 JA : It is much easier to finance a deal when there is a structure. If DL says "pay us and it is yours", that is a structure that can be analyzed. I know
75 seabosdca : And it really would not be difficult for them. In the grand scheme of things, it wouldn't hurt them much to drop their fares just enough that you wou
76 JA : What makes you think that a 50 seater has to be as efficient as a 737 to make money? Why do the airlines fly anything but A320s and 737s if that idea
77 JA : Fuel killed ExpressJet. I believe fuel went up $40-50 per barrel from when they started to when they threw in the towel.
78 DeltaMD90 : Flying your proposed routes (against all those WN 737s) makes me think so. I think you seriously underestimate WN. They'd crush this operation like a
79 Polot : But as I mentioned DL has been trying to unload OH for years. They have been actively trying to seek out people to buy OH from them before giving up.
80 HOMsAR : How do you know Amtrak would "try to fit it in" as you say? Railroad capacity isn't cheap. How much would Amtrak charge to fit it in. Union Station m
81 JA : Which is why I would keep the existing management in place if they chose to stay. Amtrak needs to make money and they are running on their own railro
82 HOMsAR : ROI matters when you're looking at future investment. If you've already invested the money (as Delta and others have by already buying a bunch of 50-
83 FlyPNS1 : And where is fuel today? It's running near $100 barrel. Not cheap. Amtrak has never made money. DL is running a hub at LGA now...plus they don't rely
84 JA : With your statements about my "industry knowledge", you should be aware that it is a big problem when your budget plans for $85/barrel oil and it spi
85 seabosdca : You have to look at how fuel killed ExpressJet. High fuel prices have worse effects on the operating economics of 50-seaters than on any type of main
86 OOsnowRat : To be fair, nobody is operating CR2s in the manner J A is proposing. Personally,I would find a CR2 with the legroom of a 737 and an inflight product
87 JA : You are absolutely correct that fuel may make a competitive response more effective. It is certainly a risk, but it is a risk worth taking in my opin
88 DeltaMD90 : I'll hit from a different angle, I suppose we can agree to disagree on the previous points (for now at least.) Why is this plan better than just givin
89 JA : Not voluntarily. OO flies RJs independently when they can't find a home for them (in most cases).
90 Polot : And you are suggesting that OH fly RJ's independently for the sole reason that nobody can find homes for them.
91 DeltaMD90 : But your plan is supposed to be better than a desperate throwing of RJs on routes, so surely they'd welcome this plan?
92 OOsnowRat : If the alternative is closing up shop and everyone losing their jobs, I would think a new OH would be in a position to negotiate a little bit lower c
93 DeltaMD90 : But OH *IS* Delta. OH has no negotiating power. It would have to be a brand new airline... so why not give them to the already well established OO in
94 PSU.DTW.SCE : There is nothing to restructure since OH not an independent company or airline. What is even worth saving at OH at this point? About the only thing th
95 Post contains images OOsnowRat : OH is a wholly owned subsidiary of DL, just like Regional Elite was. It has its own certificate and employees, with whom it can certainly negotiate i
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