n471wn
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Legend Airlines DC-9's

Wed Jun 29, 2005 6:19 am

After years of sitting in the Tucson hot sun,two of the ill-fated DC-9 Fleet of defunct Legend Airlines are being leased to Air Gemini (msn 47110 and 47765). You will recall that Legend was the airline that American Airlines killed at Love Field by bringing in duplicate flights, running them out of business and then after they went bankrupt, AA again left Love Field. Another reason to fight to get the Wright Amendment eliminated.
 
FlyingTexan
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RE: Legend Airlines DC-9's

Wed Jun 29, 2005 6:26 am

Quoting Dbba (Thread starter):
AA again left Love Field

And pulled the revered 9/11 trump. Horsecrap!

 spin 
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commavia
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RE: Legend Airlines DC-9's

Wed Jun 29, 2005 6:39 am

Quoting Dbba (Thread starter):
You will recall that Legend was the airline that American Airlines killed at Love Field by bringing in duplicate flights, running them out of business and then after they went bankrupt, AA again left Love Field.

This is a bit of an oversimplification, no? Perhaps spending millions of dollars on a beautiful, if albeit way too expensive terminal, plus flying extremely maintenance-intensive, old airplanes and being limited to only 56 sellable seats per flight had something to do with it too. And, to top it all off, even with only 56 sellable seats on a plane that some airlines have trouble flying profitably with twice as many seats, they were giving away a premium, First Class product at Coach prices. Explain to me, exactly, how this business plan could ever have worked? This whole myth that "AA killed Legend" is just that, a myth. IMO, Legend's failed business plan would have killed it off eventually anyway, AA just helped it along.
 
legendDC9
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RE: Legend Airlines DC-9's

Wed Jun 29, 2005 6:44 am

AA got away with murder on these DAL-LGA flights (as you can tell I may be a bit biased here). Started them up with Legend and dumped them soon after Legend went away. The fact the AA argued and argued over running the flights (which were in-fact covered by the wright ammendment, 56 seats or under) and then turned around and put it's own service in place is simply a predatory act which they got away with...
 
PHLBOS
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RE: Legend Airlines DC-9's

Wed Jun 29, 2005 6:49 am

According to a back-issue article of Airliners magazine covering Love Field (and mainly WN) released several months ago, the main reason Legend Airlines shut down was because it was getting buried in defending itself in court litigation costs (courtesy of AA).
"TransEastern! You'll feel like you've never left the ground because we treat you like dirt!" SNL Parady ad circa 1981
 
commavia
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RE: Legend Airlines DC-9's

Wed Jun 29, 2005 6:50 am

Quoting LegendDC9 (Reply 3):
The fact the AA argued and argued over running the flights (which were in-fact covered by the wright ammendment, 56 seats or under) and then turned around and put it's own service in place is simply a predatory act which they got away with

It's not predatory in the slightest. AA argued and litigated to keep Legend on the ground. Once they lost, AA attempted to maintain its market through competiting with Legend on price and service.

That's not predatory, it's called competition.
 
1MillionFlyer
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RE: Legend Airlines DC-9's

Wed Jun 29, 2005 6:57 am

Quoting Commavia (Reply 5):
It's not predatory in the slightest. AA argued and litigated to keep Legend on the ground. Once they lost, AA attempted to maintain its market through competiting with Legend on price and service.

That's not predatory, it's called competition.

We all know what happened. say what you will, AA put them out of business.

I remember reafing trip reports about the Lobster tails and steaks AA offered along with Triple miles and usually only 30 people on the plane.

Poor Legend.
Golf Foxtrot you are cleared for departure
 
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clickhappy
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RE: Legend Airlines DC-9's

Wed Jun 29, 2005 6:58 am

anyone who would defend AA's actions, with regards to Legend/Love or JetBlue/Long Beach is an AA apologist.

Flooding a market with capacity, when you didn't serve it previous, is predatory. Pulling out after you bury your competitor is classless.
 
commavia
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RE: Legend Airlines DC-9's

Wed Jun 29, 2005 7:07 am

Quoting 1MillionFlyer (Reply 6):
AA put them out of business.

You won't hear me argue that AA did not contribute to Legend's collapse. They clearly did as they offered a comporable product, at a comporable price, but with the initial advantage of the enormous AAdvantage FF base in Dallas that Legend was trying to skim.

But, blaming AA -- completely -- for "putting Legend out of business" is, IMO, completely disingenuous. As I stated in my earlier post, Legend's businessp plan was just plane horrible. They spent money on the wrong things, and used aircraft completely unsuited for the mission they intended them for.

Quoting Clickhappy (Reply 7):
Flooding a market with capacity, when you didn't serve it previous, is predatory. Pulling out after you bury your competitor is classless.

Blah, blah, blah, "predatory." Competition is competition.

Predatory Pricing:
Predatory pricing is the practice of a dominant firm selling a product at a loss in order to drive some or all competitors out of the market. The other firms must lower their prices in order to compete with the predatory pricer, which causes them to lose money, eventually driving them bankrupt. The predatory pricer then has fewer competitors or even a monopoly, allowing them to raise their prices above what the market would otherwise bear.


You can't stand the heat -- then get out of the kitchen. This country was built on small, little guys (Legend) triumphing over the big, bad, evil guys (AA, apparently). But, throughout time, those little guys have had to deal with some pretty crappy stuff in order to survive. That's life, that's the free market. What is AA supposed to do? Just allow another company to come in and take away their passengers? Isn't it only fair to allow AA to compete with Legend, or any other airline, in any other market, with all the tools it has available?
 
legendDC9
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RE: Legend Airlines DC-9's

Wed Jun 29, 2005 7:10 am

Quoting Commavia (Reply 2):
And, to top it all off, even with only 56 sellable seats on a plane that some airlines have trouble flying profitably with twice as many seats, they were giving away a premium, First Class product at Coach prices.

The business plan and the start-up money was pretty much in line and a loss to start was expected, while the name got established. What was not expected was the tremendous costs associated with fighting court order after court order by AA and their battery of lawyers.
 
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clickhappy
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RE: Legend Airlines DC-9's

Wed Jun 29, 2005 7:14 am

You just made my point, thank you.

Predatory pricing is the practice of a dominant firm selling a product at a loss in order to drive some or all competitors out of the market.

Exactly what AA did, to the "t."
 
sllevin
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RE: Legend Airlines DC-9's

Wed Jun 29, 2005 7:15 am

Actually, the biggest thing that was unexpected was the market crash of March 2000, after which it became very difficult to raise money. Legend had planned on losing money, and then raising another 20 million, whch they felt would carry them to profitability. But after the market crash, it became impossible to raise that 20 million.

Steve
 
commavia
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RE: Legend Airlines DC-9's

Wed Jun 29, 2005 7:17 am

Quoting LegendDC9 (Reply 9):
The business plan and the start-up money was pretty much in line and a loss to start was expected

Sure -- you are absolutely right. Just about every airline plans to make a loss at the beginning. But, what I really still need explained to me, is -- how did Legend ever plan to make money? Flying old planes, with very high maintenance costs, retrofitted with expensive interiors, in and out of a $21M terminal they had built from scratch. That's the kicker to me -- $21M, out of a total of $62M raised in start-up cash. That's more than a third, just on a terminal building when other facilities were available at the existing Love Field terminal. And, all of this, all of these costs and expenses and money flying out the window -- and they did all of this knowing they were handicapped to only selling 56 seats on a plane designed to hold 100, dramatically raising per-seat operating costs, and they were still going to sell the product (excellent, First Class, no questions about it) at a coach price. I ask again -- somebody, please tell me, with or without AA, how was this ever supposed to make money?

Quoting Clickhappy (Reply 10):
Exactly what AA did, to the "t."

What proof, exactly, do you have of that? AA's costs were probably (almost certainly) lower than Legend's since AA was using old, renovated Love Field terminal gates, using newer and more efficient F100s, and offering a far less opulent product than Legend. Legend's old DC9s, brand new terminal and stellar inflight service probably meant that AA could have matched their fares and still been above unit cost.

[Edited 2005-06-29 00:20:01]
 
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clickhappy
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RE: Legend Airlines DC-9's

Wed Jun 29, 2005 7:23 am

They built a terminal and offices, thus creating an asset. Seems like a good use of capital to me.

Lots of DC-9's still flying. Etc etc etc.

I'm not going to argue about economic issues with a 16 yo

[Edited 2005-06-29 00:23:33]
 
legendDC9
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RE: Legend Airlines DC-9's

Wed Jun 29, 2005 7:24 am

Quoting Commavia (Reply 5):
Once they lost, AA attempted to maintain its market through competiting with Legend on price and service.

You see though, that's the difference. AA did not attempt to maintain it's market because they never had that market to begin with. They were completely satisfied with their DFW-LGA service (numbering 12-15 RT's a day)until someone else came along and offered service out of DAL, which they could not, being such proponents of the Wright ammendment. Then, when they lost the battle in court, they came out and offered the same service, for low prices, which if Legend was losing money on these routes, so did AA. It is a tough environment no doubt, but their actions were not in any way to offer competition, it was to drive someone else out of business.
 
legendDC9
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RE: Legend Airlines DC-9's

Wed Jun 29, 2005 7:31 am

Quoting Commavia (Reply 12):
I ask again -- somebody, please tell me, with or without AA, how was this ever supposed to make money?

The DC9's were a start. 7 of them were ultimatly in service which perhaphs a few more en-route. No doubt that they are old old planes. The plan was for new aircraft soon thereafter with 717's as the leading candidate. Would the start been better off investing in these new aircraft right away? maybe... However, those DC9's, ex Continental, were cheap and available. If you did spend a third of your money on facilities and want to start flying, you take what's available to you then.

There were flaws, no argument there. However, no start-up short of Southwest in the days of the CAB, has faced this level of legal action by a competitor. That is what truly handicapped the start.
 
commavia
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RE: Legend Airlines DC-9's

Wed Jun 29, 2005 7:46 am

Quoting Clickhappy (Reply 13):
They built a terminal and offices, thus creating an asset. Seems like a good use of capital to me.

Really? When you start up with only $62M, and spend over a third of that -- $21M, on a brand new terminal, you think that is a good use of capital?

Maybe they should have saved the money on the gates, go use the gates already available across the runway, and instead sink money into leasing some more efficient aircraft instead of the old, expensive DC9s. That is what B6 did. They saved money by not building a completely unnecessary terminal and instead secured a phenomenal deal with Airbus to basically get brand-new A320s almost for free. Now, I know that Legend probably could never have secured a deal like that, but I think they could have worked something out, especially with as smart a guy as T. Allan McCartor at the helm.

Quoting LegendDC9 (Reply 15):
If you did spend a third of your money on facilities and want to start flying, you take what's available to you then.

Well, I guess that was their mistake then, and they had to live with it.
 
PHLBOS
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RE: Legend Airlines DC-9's

Thu Jun 30, 2005 2:36 am

Quoting Commavia (Reply 12):
how did Legend ever plan to make money? Flying old planes, with very high maintenance costs, retrofitted with expensive interiors, in and out of a $21M terminal they had built from scratch. That's the kicker to me -- $21M, out of a total of $62M raised in start-up cash. That's more than a third, just on a terminal building when other facilities were available at the existing Love Field terminal.

I'll see your assumptions and raise you with a tailored What If scenario regarding Legend Airlines.

Had Legend used the existing gates at DAL and used either 30-50 seat ERJs or CRJs (which are W/S A-friendly from the get-go); do you think for one minute that AA (in addition to offering matching service & fares) wasn't going to try to litigate Legend out of existence?

Quoting Commavia (Reply 8):
Isn't it only fair to allow AA to compete with Legend, or any other airline, in any other market, with all the tools it has available?

Compete w/another carrier at DAL w/matching fares and service? Yes.

Litigate an upstart carrier to a near point of liquidation because they found a legal loophole in an existing but outdated law (W/S A)? No.
"TransEastern! You'll feel like you've never left the ground because we treat you like dirt!" SNL Parady ad circa 1981
 
Wayfarer
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RE: Legend Airlines DC-9's

Thu Jun 30, 2005 2:41 am


View Large View Medium
Click here for bigger photo!

Photo © Chris Coduto



 camera  description: N923LG (cn 47110/167) These two have been in storage in Tucson since Legend's demise, and it doesn't look like they are going anywhere soon.

Looks like that DC-9

Quoting Dbba (Thread starter):
After years of sitting in the Tucson hot sun,two of the ill-fated DC-9 Fleet of defunct Legend Airlines are being leased to Air Gemini (msn 47110 and 47765

after two years, that's a long time of idling ...
EASTERN AIRLINES: We Are Still Here Today
 
DfwRevolution
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RE: Legend Airlines DC-9's

Thu Jun 30, 2005 2:46 am

>> It's not predatory in the slightest. AA argued and litigated to keep Legend on the ground. Once they lost, AA attempted to maintain its market through competiting with Legend on price and service.

That's not predatory, it's called competition


Hmm... That reminds me of a line from Collateral:

Jamie Fox: "You killed him!"

Tom Cruise: "No, I just shot him. The bullets and the fall killed him."
 
ejmmsu
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RE: Legend Airlines DC-9's

Thu Jun 30, 2005 2:48 am

I live in SPS and I'm a NW Worldperks member. The major hub of AA is about a 90 mile drive from me, and the only airline with service to SPS is AA. Why, may you ask, would a guy in my position choose to drive to OKC and use skyteam?

Well, its exactly this drivel. AA has proven that they will do anything they can to stifle competition in te Dallas area, and I refuse to pay their exhorbarant fares out of DFW. I am not alone. I would say half the people in the SPS area that are catching a flight are driving to OKC to take it. And they aren't flying AA.

If AA would wake up, accept that they need to face competition, and quit with their predatory practicies and spouting their baseless claims about the end of he world that the repeal of he Wrong Ammendment would cause, I'd give them another chance.

Util then, I wouldn't be cought dead in an AA plane.

And I'm certainly not going to pay $400 dollars for an andvanced purchase flight to BNA.
"If the facts do not conform to the theory, they will have to be disposed of"
 
texan
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RE: Legend Airlines DC-9's

Thu Jun 30, 2005 3:53 am

Quoting Commavia (Reply 8):
Predatory Pricing:
Predatory pricing is the practice of a dominant firm selling a product at a loss in order to drive some or all competitors out of the market. The other firms must lower their prices in order to compete with the predatory pricer, which causes them to lose money, eventually driving them bankrupt. The predatory pricer then has fewer competitors or even a monopoly, allowing them to raise their prices above what the market would otherwise bear.

AA was operating its DAL routes at a loss. In addition, documents from inside AA state that in other situations, specifically with WestPac to COS; Vanguard to ICT, MCI, and PHX; and SunJet to LGB, AA willfully and knowingly lowered their fares to levels where they knew they were going to lose money, flooded the market with capacity (ICT went from all SF3s to 5 MD80s, 3 F100s, and 2 props; MCI went to 12 daily 727s and MD80s combined; LGB was opened back up with 5 daily; COS went from 5 daily F100s and MD80s combined to 9 daily MD80s and 727s), and then reduced service and dramatically increased fares as soon as the new carrier left the market. The DOJ sued AA over these events, and investigated them over their actions against Legend.

To be fair, AA is not the only carrier that does this. NW is legendary for their anti-competitive behavior, predatory pricing, and capacity dumping. I do not know enough about DL, UA, or US to make any reasoned arguments for or against them.

Texan
"I have always imagined that Paradise will be a kind of library."
 
n471wn
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RE: Legend Airlines DC-9's

Thu Jun 30, 2005 4:05 am

Quoting Wayfarer:

description: N923LG (cn 47110/167) These two have been in storage in Tucson since Legend's demise, and it doesn't look like they are going anywhere soon.

Response:

Do not know about 47167 but 47110 has now been leased and will be or is out of storage.
 
sccutler
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RE: Legend Airlines DC-9's

Thu Jun 30, 2005 2:22 pm

Quoting Commavia (Reply 8):
Blah, blah, blah, "predatory." Competition is competition.

Oy vey! AA is aggressively lobbying to maintain federal legislation suppressing competition. If they believe so mightily in the ethics of competition, why pray tell do they object to repeal of the Wright Amendment?

Quoting Sllevin (Reply 11):
Actually, the biggest thing that was unexpected was the market crash of March 2000, after which it became very difficult to raise money. Legend had planned on losing money, and then raising another 20 million, whch they felt would carry them to profitability. But after the market crash, it became impossible to raise that 20 million.

Si, to amplify a bit, LC actually had not run out of the capital which had already been committed, but its sudden shutdown was precipitated by a wholly-unexpected retraction of committed cash.

FWIW, LC's loads were (in spite of AA's selective and aggressive interest in promoting competition) growing nicely, as were their yields. The business model had a shot, but we'll never know, now.

+++

I'm still intrigued by Commavia's newly-found commitment to the principle of competition; glad to see it. Let us remove the artificial barriers to free competition and let the games begin.

When you actually have to spend your own money - and pay your own bills - competition looks pretty important.
...three miles from BRONS, clear for the ILS one five approach...
 
thecamel67
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RE: Legend Airlines DC-9's

Thu Jun 30, 2005 2:44 pm

I will tell you this, it was an experience to fly them. I was dating a woman in DC and I would take Legend from DAL to IAD every weekend. The average fare was about $350. I think they were the pioneer in providing DirecTV on their aircraft. The Legend terminal and planes are probably the closest I will ever get to a true corporate experience.

Was their business plan flawed? Remember they came out of the high flying 90's when most airlines were rolling in the dough. Last minute air fares from DFW to SFO/LAX/IAD/NYC were all $2,200 for coach! They wanted to capture the $1,200+ fare and downtown Dallas/Highland Park executive. If the economy were to continue to go-go-go like it was, they could have made it.

I would gladly have given my mileage up on those runs for that service experience. It was phenomenal. I still have my Legend FF card and their 1st in flight magazine (D Magazine with a special cover and Legend inserts)  Smile

Yes, they spent a huge sum of money on the terminal. They also spent a huge sum of money defending lawsuits. It was also a precursor to what is happening with the Wright Amendment now. The problem for AA now is that WN is in a position to fight and outlast AA as AA did with with the others mentioned above.

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