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Purpose Of AA Buying Reno Air?

Fri Jun 13, 2003 11:38 pm

Why did American buy out Reno Air? They dismantled majority if not all of their hub operations, sold off the MD90s, and discontinued most routes. What were the benefits of this move besides picking up some more MD80s?
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RE: Purpose Of AA Buying Reno Air?

Fri Jun 13, 2003 11:45 pm

What were the benefits of this move besides picking up some more MD80s?

Getting rid of the competition.
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RE: Purpose Of AA Buying Reno Air?

Fri Jun 13, 2003 11:48 pm

AA purchased RenoAir for its SJC operations. AA figured SJC would give it a West Coast presence to supplement LAX and feed for lucrative transcon flights. Things didn't work out, though (especially after the tech boom). Some routes (like LAX-LAS) still remain. All RenoAir aircraft has been retired.

For more information, do a search - this topic comes up frequently.
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RE: Purpose Of AA Buying Reno Air?

Fri Jun 13, 2003 11:49 pm

Look at their history. It was pretty much the same with Air Cal, and will ultimately be the same with TWA.
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RE: Purpose Of AA Buying Reno Air?

Fri Jun 13, 2003 11:54 pm

"AA purchased RenoAir for its SJC operations."

It was basically AA's operation that Reno Air took over in SJC in the first place. AA determined with it's cost structure, that they could not effectively operate a hub out of SJC, so they leased the gates to Reno Air, provided the ground services, provided the fuel contract, and allowed Reno Air to participate in the AAdvantage program (for a fee). Reno Air provided the north-south service from SJC, while allowing AA to protect it's West Coast and international customers through the AAdvantage program.
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RE: Purpose Of AA Buying Reno Air?

Fri Jun 13, 2003 11:55 pm

Like B747 said, getting rid of competition. How dare someone start an airline with lower operating costs and threaten our high cost structure! Bad Reno Air! And, as I've said in past threads, shame on Reno Air's owners for selling out to Darth Crandall.

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RE: Purpose Of AA Buying Reno Air?

Fri Jun 13, 2003 11:56 pm

Ever do anything on a drunk that seemed like a good idea at the time? lol
Yes, I actually *do* work for an airline,how about you?
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RE: Purpose Of AA Buying Reno Air?

Sat Jun 14, 2003 12:19 am

Jim,for years there was rumor that Crandalls wife sat on the BOD of Reno or was a majority share holder in the company.

We used to see stickers that read "AMR: American, Midway, your job next?"

[Edited 2003-06-13 17:32:45]
Yes, I actually *do* work for an airline,how about you?
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RE: Purpose Of AA Buying Reno Air?

Sat Jun 14, 2003 12:57 am

IMO AA's aquisition of Reno Air was one of countless examples of a cartel airline allowing egomania and impulse to get in the way of sound longterm business management. As with USAir's similar move on PSA and hasty withdrawal from the well-established markets inherited, the ultimate beneficiary of the cartel's folly was Southwest, who by and large incorporated the "unviable" (according to AA and US) former networks of Reno Air and PSA with great success.
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RE: Purpose Of AA Buying Reno Air?

Sat Jun 14, 2003 1:33 am

How could it be to "eliminate competition" AA did not compete with ANY QQ routes. AA did want to try and make another go of the west coast as they see it as a very important market. Carty was just to stupid to realize it would not work out.
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RE: Purpose Of AA Buying Reno Air?

Sat Jun 14, 2003 2:23 am

What you have to remember is that the QQ Board of Directors APPROVED the purchase of QQ by AA. Hence, they felt that shareholder value was enhanced by an AA purchase rather than remaining as an independent on-going concern.

I dumped at the gybe mark in strong winds when I looked up at a Porter Q400 on finals. Can't stop spotting.
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RE: Purpose Of AA Buying Reno Air?

Sat Jun 14, 2003 2:29 am

Everyone I ever talked with who actually flew QQ always had good things to say about it! Even my Uncle who when he came to visit us in Michigan flew them even tho it meant back tracking for him to use QQ as he said it was so much better than other carriers. You have to ask yourself this if the board did not approve the sale would QQ remain today? I think yes. I remember a charter operator use to charter an aircraft of there's to be used out of DTW and it was always fun to see the plane parked waiting pax when I was out working at the airport.
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RE: Purpose Of AA Buying Reno Air?

Sat Jun 14, 2003 2:31 am

I read somewhere that the price for QQ was so good, that AA thought they had a winner even if all they accomplished was to move Reno's frequent flyers into the American Airlines mileage program.
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RE: Purpose Of AA Buying Reno Air?

Sat Jun 14, 2003 3:14 am

Ditto Pan Am's purchase of National, PeoplExpress and Frontier, USAir and PSA, American and Air Cal, Republic and Hughes Airwest, Piedmont and Empire, Braniff and Florida Express. They all seemed like a good idea at the time--to someone. Mergers that withstood the test of time: Delta/C&S, Northeast, Western; TWA/Ozark; USAir/Piedmont; Continental/PeoplExpress; ValuJet/AirTran; Eastern/Colonial, Caribair, Mackey; Braniff/Panagra; Allegheny/Mohawk.
I work for Southwest, but the views expressed are my own and do not necessarily represent those of Southwest.
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RE: Purpose Of AA Buying Reno Air?

Sat Jun 14, 2003 8:35 am

Part of the idea of the AA purchase of Reno Air was to build a hub in SJC that was lower-cost. So they offered Reno the routes and gave them a sweet deal on gate space and other facilities. Then, when they took the airline over, they intended to keep the Reno pay scales for those employees and other lower associated operating costs.

Of course TWU and the other AA unions balked at this idea, so AA ended up selling off the assets and routes. The real losers in the deal were the QQ employees who got laid off or otherwise forced out of their jobs. The winners were the QQ stockholders, who made some real $$ on the deal. Oh, and AMR, who got rid of some of their competition.

And QQ was competing with AA on some routes, especially routes from the midwest to the west coast.
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RE: Purpose Of AA Buying Reno Air?

Sat Jun 14, 2003 8:49 am

Don't know whether true or not, but I have heard that one reason AA bought Reno was to get their pilots. Remember the pilot shortage? Everybody was hiring. This seemed to be the easiest and quickest way to get qualified pilots.

Like I said, don't know how true but maybe there is something to it.
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RE: Purpose Of AA Buying Reno Air?

Sat Jun 14, 2003 8:56 am

WN is the first non-West Coast based airline to really make it on the West Coast. The cartel airlines, all of whom are based East of the Rockies, just can't figure out how to serve West Coast markets.
Firings, if well done, are good for employee morale.
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RE: Purpose Of AA Buying Reno Air?

Sat Jun 14, 2003 3:14 pm

As others have said...

American never really had a western north-south network. Reno came along, and started building up, and American worked with them cooperatively. There were some overlapping routes, but not tons and tons.

But after a few years Reno, while being successful from a passenger standpoint, was doing poorly from a business standpoint (read: losing money). American decided that perhaps, if integrated into the AA structure, that Reno's operations could be made profitable. I don't recall if they actually pitched the 'B-scale' concept of operating Reno as a 'carrier within a carrier' or not (might have just been wishful thinking).

But in the end, such a 'B scale' never materialized, and even with economies of scale at American, the routes never made money -- largely because, while there were flights, it still never represented a United-scale of north-south operations. And as Southwest continued to grow on those routes, American decided to get out of an area they'd never really been able to make work.

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RE: Purpose Of AA Buying Reno Air?

Sat Jun 14, 2003 3:51 pm

QQ was created to eventually be merged, the question is, "what took so long for the merger to take place?" Great service on QQ. Lowest first class fare up to Alaska too.

Reno Air shareholders benefit, high price for losing airline stock.

AA waas going to get more resources instaantly in the Californiaa maarket to compete with Shuttle by United. Then the 'b' scaale for waages never worked out.

AA should haave saaved their resources, aand reaally reseaarched their own history, aand unsuccessful aattempts with the former aAirCal routes out of Orange Co.

Why did they buy TWA? Another "hub"? More airplanes, United was a bigger airline at the time, tired of being no. 2? The focus was to be the biggest, and the best airline, reach more potential business fare customers, add them to AAdvantage.

New focus, aand more seaats, will turn AA into aa profitaable caarrier. Regulaar faare increaases, will occur, the aattaack will be on aat JFK, for JetBlue.

Something special in the air, will control the skies again, soon.

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RE: Purpose Of AA Buying Reno Air?

Sat Jun 14, 2003 4:12 pm

My understanding was that three months after starting operations from Anchorage to the lower 48 it was their number one route.

I don't recall ever flying them when they wheren't full out of ANC. That was with usually four flights per day.

We had a great interline deal with them, 25 a leg to SEA.

But their purchase what mostly about AA wanting to secure the west for themselves.
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RE: Purpose Of AA Buying Reno Air?

Sun Jun 15, 2003 1:17 pm

Does anyone ever think about the golden parachutes of airline execs? Look at Pan Am, Eastern - we could go on. Get the high paying job, make some great excuses why the airline isn't making money, get the BOD to give you a golden parachute, and then when the company folds, the aircraft are grounded, the staff laid off, you simply take your millions and say, "Bye-bye." And please, don't get me started on the Unions.........
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RE: Purpose Of AA Buying Reno Air?

Sun Jun 15, 2003 10:26 pm


What does ANY of that have to do with this particular thread? AA buying Reno Air.

I'll answer for you. Nothing.

Thank you.

RE: Purpose Of AA Buying Reno Air?

Mon Jun 16, 2003 1:30 am


I agree with you, but I think that Carty envisioned a medium-sized hub at SJC, complete with service to several international destinations (in addition to AA), Japan">NRT and the failed TPE/CDG routes, AA was also interested in HKG and LON). Carty wanted AA to operate SJC, not QQ. Once the tech boom died off, AA lost interest in SJC… personally, I believe SJC could’ve survived as a mini-hub (~200 daily departures, mostly RJs) – after all, there’s a ton of premium business in the area and a large O/D traffic… SJC is convenient for those wishing to avoid SFO’s delays and traffic to the airport… the RenoAir acquisition, IMO, was a failure of Carty.
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RE: Purpose Of AA Buying Reno Air?

Mon Jun 16, 2003 2:07 am

One final note from me on this subject. I have very deep personal feelings on this, but I try to keep them personal, and let my public views remain fairly benign and superficial. I will say that my time at Reno Air was one of the finest professional experiences I have had. It's a shame that things turned out the way they did for all the fine employees at QQ. I was there from (almost) the beginning. Well before the SJC operation started. Although I wasn't SJC based (I was in SEA), I obviously spent a great deal of time flying through there. As the handwriting on the wall started to become clear, I moved on to other things. But, I will never forget the great times and great people at QQ. I hope that my former colleagues at Reno Air that did go to AA are doing well and making the best of a very difficult situation. I know, without a doubt, that I made the right choice by completely cutting those ties.

RE: Purpose Of AA Buying Reno Air?

Mon Jun 16, 2003 5:58 am


I wasn't aware you were a former QQ employee. When QQ entered the Detroit market, NW reintroducted their nonstops to RNO with sub-$200 fares. I took advantage of those fares multiple times to enjoy Lake Tahoe -- sadly, QQ dropped DTW, NW dropped the nonstops and the fares now hang around $400 (and getting to SFO isn't cheaper, either!) so I haven't been to the Reno-Lake Tahoe area in awhile, even though I'd like to go back. I never got a chance to fly QQ (those darn FF programs, with their free upgrades suck you in!), but sometimes I wish I had.

I was in Reno when the news broke out that AMR had (made an offer at least) purchased RenoAir... the Gazette-Journal proclaimed it a good thing, insisting it brought job security to QQ's couple thousand employees plus the RNO operation ... pretty ironic I think.

Glad to see you've moved on to better things!

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RE: Purpose Of AA Buying Reno Air?

Tue Jun 17, 2003 3:29 pm

i cannot believe i missed this topic as many times as we have talked about this, i have been on the east coast, and traveling back tues phl-phx-las-lax-phx, but i have to jump in on this. aa's purchase of reno had nothing to do with competition, aa tried sjc once before, and failed, failed like a virgin saying no on prom nite. aa did not want the a/c, as we talked about before, the md80 a/c reno had were not cockpit friendly with the a/c that aa ordered, and i believe had diff engines, plus, aa never flew the md87 or md90 before the reno air purchase. as rumored, it was always said that crandall had his pocket in reno air from the beginning, back to the day that aa first wanted to close down sjc. when redding loss all when the old old midway back in midway shut down, people started talking, redding had money all of a sudden, crandall announced the aa shut down of sjc, and all of a sudden, new airline in reno flying md80s, short while later, new partner for aa out of sjc to pick up gate leases and flights and while they are there, offer their pax the aa freq flyer program. truth, maybe maybe not about crandalls wife on the board, dont know, do know that my family owned a lot of stock in reno air, and my brother worked for them, and i flew them, and the reno air employees at the time were not fond of aa at all. the town of reno was not found of aa at all, mark that twice now aa has wrecked business in reno, first with aircal, and now with the purchase and shut down of reno air. most old employees of reno air in reno went to travel agents after the purchase and pleaded with agents not to book pax on aa after they closed the reno hub down, and from what my brother says, most aa pax in reno are not reno originating, but more so, returning to their destination. the town and politics in reno are very anti-aa, and they should be. the purchase of reno air by aa had a lot to do with slots, this i know, reno air had numerous ord slots for 4x daily to reno, and multiple southbound ad hoc charters, and for slots and ron slots in sna. reno air was huge in sna and had a very loyal following, for a while there, sna offered sna service to sea, las, sjc, sfo, and rno. quiet down to people who think aa wanted to try sjc again, they have the erj equip for that. remember one thing about reno air and the O&D market, except for ord and lax, dfw use to be the next huge pax market out of reno, funny though reno air never offered service on that route, 3x daily aa flights wasn't enough to scare reno air away, it was the politics behind it. my brother was high in the reno air corporate system, and they always just joked about it, reno never wanted to step on the toes of its ancestors, hint hint hint, crandall!!! i hope that the people of reno continue to boycott aa, they should!

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