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mariner
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RE: Chautauqua Parking All F9 ERJ's?

Mon Sep 12, 2011 6:53 pm

Quoting enilria (Reply 99):
I don't think they care an iota about those stations, I think they care about parking owned RJs. BB has been pretty clear about that being a Raison d'être for F9.

Think - or believe - what you will, Enilria. I've never been able to change your mind about anything, and given your previous comment about me it is quite pointless expending the energy trying.

Quoting enilria (Reply 99):
As I documented, the E190 is not a magic airplane economically.

Who claimed "magic"? It has - at Frontier - a lower belf than the E170. At Frontier the E190 can make money. The E170 can't

mariner
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enilria
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RE: Chautauqua Parking All F9 ERJ's?

Mon Sep 12, 2011 7:03 pm

Quoting mariner (Reply 100):
a lower belf than the E170. At Frontier the E190 can make money. The E170 can't

Your statements are absolutes. The E170 "can't make make money" and the E190 "can make money". I think you know that is essentially nonsense. The BELF difference between the two planes is only 2 or 3 points. Your statement implies that all F9 routes fall in that tiny gap between the two. Realistically, most of the E190 routes are probably also losing money.
 
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RE: Chautauqua Parking All F9 ERJ's?

Mon Sep 12, 2011 7:08 pm

Quoting enilria (Reply 101):
Your statements are absolutes. The E170 "can't make make money" and the E190 "can make money". I think you know that is essentially nonsense.

If you think it is "nonsense" - fine. I can only post what i know. If anyone chooses not to believe it - fine.


Quoting enilria (Reply 101):
he BELF difference between the two planes is only 2 or 3 points.

No, sir.

mariner

[Edited 2011-09-12 12:18:33]
aeternum nauta
 
smoot4208
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RE: Chautauqua Parking All F9 ERJ's?

Mon Sep 12, 2011 7:12 pm

Quoting enilria (Reply 101):
Your statements are absolutes. The E170 "can't make make money" and the E190 "can make money". I think you know that is essentially nonsense.

Republic however has an opportunity cost with the E170s. I almost guarantee you that moving them over to DL is more profitable than flying them under F9
 
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RE: Chautauqua Parking All F9 ERJ's?

Mon Sep 12, 2011 7:27 pm

Market cap for RJET is $135.7MM after paying $108MM for F9 me thinks they way over paid for what was essentially a brand with no real assets (except leases and a aoc) and to me BB has no clue how to run a branded airline. Much easier to do CPA flying when someone else tells you were to fly. I bet the BOD would cut and run at $25MM for F9 and write off/down the rest.
"I want to know the voice of God the rest is just details" --A. Einstein
 
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RE: Chautauqua Parking All F9 ERJ's?

Mon Sep 12, 2011 7:34 pm

Quoting bjorn14 (Reply 104):
Market cap for RJET is $135.7MM after paying $108MM for F9 me thinks they way over paid for what was essentially a brand with no real assets (except leases and a aoc) and to me BB has no clue how to run a branded airline.
Quoting bjorn14 (Reply 104):
I bet the BOD would cut and run at $25MM for F9 and write off/down the rest.

I disagree with the comment about BB - and the other comment about the BOD. The latter may become true, but I see no evidence for it right now.

mariner
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mikefrommke
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RE: Chautauqua Parking All F9 ERJ's?

Mon Sep 12, 2011 7:40 pm

Quoting mariner (Reply 97):
Nor would the Q400 (at Frontier) be much help - it has a break-even load factor of 100% and the E170 belf is worse.

Care to expand upon that a bit? The Q400 advertises extremely low break-even load factors, and obviously the situation at F9 isn't "ideal," but if they were able to have a decent size fleet under the RP banner, surely they would have a better opportunity to make money. Obviously you need to factor in acquisition costs and the competition, but the RJs weren't going out empty either. I think the biggest problem was that the RJ traffic was being filled with extremely low fares because the competition drove down the fares, making the highest CASM aircraft carrying the lowest RASM passengers.
 
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RE: Chautauqua Parking All F9 ERJ's?

Mon Sep 12, 2011 7:57 pm

Quoting mikefrommke (Reply 106):
Care to expand upon that a bit?

Not really. I've seen certain numbers (no names, no pack drill) which cause me to understand more clearly the present moves.

Once we move past the raw numbers, it becomes speculation. Yes, it is possible that a larger fleet of Q400's might have a lower belf, but there are other factors to consider, as you suggest.

Do I think they would expand the Q400 fleet? Anything is possible and I'd love to see it because I'd love to see a sub-100 seat aircraft in the fleet, and not just because of ASE. But whether they will or not is far above my pay scale.

Quoting mikefrommke (Reply 106):
I think the biggest problem was that the RJ traffic was being filled with extremely low fares because the competition drove down the fares, making the highest CASM aircraft carrying the lowest RASM passengers.

I'm not sure that is entirely true. On a number of the ERJ routes there was no competition, and it is, of course, interesting that they are keeping some - because they believe those routes can make money, if only seasonally. Some routes - a few - can command a higher fare premium or be productive to the network.

How long they are keeping them for, or whether they will eventually use other aircraft on those routes, is unknown to me.

I don't think there are any easy answers here.

mariner

[Edited 2011-09-12 12:59:31]
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smoot4208
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RE: Chautauqua Parking All F9 ERJ's?

Mon Sep 12, 2011 9:13 pm

Perhaps this has been covered, but why has F9 not tried to relocate any of the ERJs to DEN to support operations there? Seems like they could operate some regional spoke routes that would be too big for their next size aircraft, the E190.
 
FRNT787
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RE: Chautauqua Parking All F9 ERJ's?

Mon Sep 12, 2011 9:14 pm

Quoting bjorn14 (Reply 104):
Market cap for RJET is $135.7MM after paying $108MM for F9 me thinks they way over paid for what was essentially a brand with no real assets (except leases and a aoc) and to me BB has no clue how to run a branded airline. Much easier to do CPA flying when someone else tells you were to fly. I bet the BOD would cut and run at $25MM for F9 and write off/down the rest.

If they were ready to cut and run for $25 million, then why did they just agree to pump another $70 million into it. The BOD obviously has at least some faith in the restructuring plan and the man implementing it.
 
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mariner
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RE: Chautauqua Parking All F9 ERJ's?

Mon Sep 12, 2011 9:51 pm

Quoting smoot4208 (Reply 108):
Perhaps this has been covered, but why has F9 not tried to relocate any of the ERJs to DEN to support operations there? Seems like they could operate some regional spoke routes that would be too big for their next size aircraft, the E190.

Given that the aircraft is unprofitable in Frontier's hotly competitive fare environment - both at MKE and DEN - and with oil at these prices, I don't see that moving them to DEN would help.

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n917me
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RE: Chautauqua Parking All F9 ERJ's?

Tue Sep 13, 2011 1:51 am

My understanding is that MKE-BNA is one of the few E145s routes that are breaking even or making money. I know that the flights are usually just about full. We did cut one MKE-BNA route last year in Sep or Oct and it never came back.
From what I am hearing, the cuts are not quite over with yet. The employee conference call on the status of the F9 and the future should be interesting to say the least.
 
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RE: Chautauqua Parking All F9 ERJ's?

Tue Sep 13, 2011 2:03 am

Quoting n917me (Reply 111):
We did cut one MKE-BNA route last year in Sep or Oct and it never came back.

Yup, and the schedule is much less competitive now, especially with some 15 nonstop choices to ORD plus all kinds of connecting options to MKE.
I can't decide whether I miss the tulip or the bowling shoe more
 
smoot4208
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RE: Chautauqua Parking All F9 ERJ's?

Tue Sep 13, 2011 2:44 am

Quoting n917me (Reply 111):
From what I am hearing, the cuts are not quite over with yet. The employee conference call on the status of the F9 and the future should be interesting to say the least.

There's really not much left for them to cut.
 
FutureUScapt
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RE: Chautauqua Parking All F9 ERJ's?

Tue Sep 13, 2011 2:47 am

Quoting mariner (Reply 107):
Once we move past the raw numbers, it becomes speculation. Yes, it is possible that a larger fleet of Q400's might have a lower belf, but there are other factors to consider, as you suggest.

Ownership costs being the main one I'm guessing you are hinting at. Somehow, this eludes some...
 
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enilria
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RE: Chautauqua Parking All F9 ERJ's?

Tue Sep 13, 2011 3:02 am

Quoting mariner (Reply 102):
No, sir.
mariner
Quoting mariner (Reply 102):
If you think it is "nonsense" - fine. I can only post what i know. If anyone chooses not to believe it - fine.
Quoting mikefrommke (Reply 106):
Care to expand upon that a bit? The Q400 advertises extremely low break-even load factors,

Mariner is knowingly or unknowingly commenting on the *current* performance of the airplanes in F9's fleet based upon the routes they are actually flying. It is not a relative comparison and it is not a valid comparison between aircraft types because all things are not equal. In fact, nothing is equal. The markets are different, the flight lengths are different, the fares are different, etc. So, to say the "E170 can't make money" means that in the markets F9 is flying them they can't make money. If the E170s were flying the E190 routes they might even do better than the E190s. Basically what that all means is that F9 is losing money because BELFs above 80% are VERY BAD.

To do a simple example, lets say F9 had CR7s and E170s. The E170 is flying a market up against WN and it costs $200 per seat to operate the flight, but the average fare is $100. The BELF is 200%. The CR7 is flying a route of the same length and it costs $200 per seat to operate the flight, but the fare is $250. The BELF is 80%. Is it fair to say that the E170 can't make money? Of course not...it's just because of the market it is assigned.
 
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RE: Chautauqua Parking All F9 ERJ's?

Tue Sep 13, 2011 3:30 am

Quoting SLCPilot (Reply 81):
Again, I disagree. It is BB that brings his views to the workplace, and has informed his employees of his views. In a previous F9 thread I posted the "abortion newsletter" obtained from the public domain that some said didn't exist. He has opened the door to this discission, and therefore it seems appropriate to this thread as well.

Just because he has "opened the door" doesn't mean it's relative to every thread. Maybe we should discuss the beliefs of every CEO when commenting in these threads. If not, why not? Because it isn't relevant? Well, it really isn't relevant to "Chautaqua Parking All F9 ERJ'S?" either.

Regardless of what you or I believe about his religious views, I think it's polarizing to bring it up in these threads, particularly when some people choose to present it in with their own spin.

Quoting bjorn14 (Reply 104):
BB has no clue how to run a branded airline.

Well, go back 3 years, 5 years, 10 years - how ever far you'd like - and it would appear that most CEO's have no clue how to run a branded airline.

-Dave
-Dave


MAX’d out on MAX threads. If you are starting a thread, and it’s about the MAX - stop. There’s already a thread that covers it.
 
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mariner
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RE: Chautauqua Parking All F9 ERJ's?

Tue Sep 13, 2011 3:55 am

Quoting enilria (Reply 115):
Basically what that all means is that F9 is losing money because BELFs above 80% are VERY BAD.

And a belf of over 100% is worse.

As to the smaller ERJ's, since you have been saying - for months - that they can't make money in the Frontier situation, the routes they fly, the numbers I have seen confirm exactly that. So I really don't know why there is an issue - or why you try and involve me.

Of course, the numbers only relate to Frontier. They are the only specific numbers (of this nature) I have seen and it is a Frontier situation that we are discussing. I have never claimed to know the numbers they would be in any other situation.

mariner

[Edited 2011-09-12 20:56:40]
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bjorn14
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RE: Chautauqua Parking All F9 ERJ's?

Tue Sep 13, 2011 10:30 am

Quoting mariner (Reply 107):
On a number of the ERJ routes there was no competition

Well not directly on O&D traffic but on the CX traffic which may have moved pax to other airlines.
"I want to know the voice of God the rest is just details" --A. Einstein
 
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RE: Chautauqua Parking All F9 ERJ's?

Tue Sep 13, 2011 11:33 am

"I disagree with the comment about BB"

I don't. This situation reminds me of Indy Air or Pan Am II buying Carnival:

Thoughtless actions and rudderless movement.

A regional/mainline combo has never been tried successfully because they are 2 different business models. What does Republic no about marketing for example? Nada. But F9 does right? They were very successful in DEN prior to being bought, right? Oh wait...

So basically you have a large regional with 5 certificates, a small LCC with a hub that is a blood bath, and leadership that can not seem to be able to decide what type of aircraft to order, what routes to fly, and for whom to fly them.
 
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enilria
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RE: Chautauqua Parking All F9 ERJ's?

Tue Sep 13, 2011 1:02 pm

Quoting mariner (Reply 117):
As to the smaller ERJ's, since you have been saying - for months - that they can't make money in the Frontier situation, the routes they fly, the numbers I have seen confirm exactly that. So I really don't know why there is an issue - or why you try and involve me.

Given that the ERJs are not operating in low yield routes (with maybe one or two exceptions), that is probably as well as they are going to do and thus it confirms my earlier comments about the viability of the ERJs.

Quoting mariner (Reply 117):
Of course, the numbers only relate to Frontier. They are the only specific numbers (of this nature) I have seen and it is a Frontier situation that we are discussing. I have never claimed to know the numbers they would be in any other situation.

Anyway, it isn't a valid comparison between types...it just means F9 is in a lot of trouble.
 
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enilria
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RE: Chautauqua Parking All F9 ERJ's?

Tue Sep 13, 2011 1:21 pm

Quoting jfklganyc (Reply 119):
Thoughtless actions and rudderless movement.
Quoting jfklganyc (Reply 119):
What does Republic no about marketing for example? Nada.
Quoting jfklganyc (Reply 119):
So basically you have a large regional with 5 certificates, a small LCC with a hub that is a blood bath, and leadership that can not seem to be able to decide what type of aircraft to order, what routes to fly, and for whom to fly them.

I think these are strong points and the dismissal of SM only exacerbated the situation since he was not replaced by anyone with a similar background. Ironically, with SM at Pinnacle he faces the opposite problem that BB faces with F9.

Let's elaborate on your points. What are the strengths and weaknesses of a CPA carrier?

Strengths of CPA airline management
Labor costs= CPAs live by keeping labor costs low and playing labor groups off each other. They have done the same at F9 and have been successful in this area, although probably at the expense of customer service. Rating: A
Operational reliability= CPAs don't get paid without operating, so they operate. F9 did a wonderful job after the storm wiped out a huge portion of their fleet, even paying for extensive sub-service. I doubt Ryan Air or Air Asia would have done the same due to the cost. Rating: A


Weaknesses of CPA airline management
Marketing= CPAs do no marketing at all. Ian Arthur is gone from F9 and RJET has slashed F9's marketing budget to fanfare as if it is an obviously good decision. It was not. The most successful airline, WN, advertises extensively. Rating: C (only because they can coast for a while on past glory)
Distribution= CPAs do no distribution or sales. F9 was leading in terms of its website with multiple tiered products. Development ceased as soon as RJET took over. Rating: C (same reason as marketing)
Route network= CPAs do not do route planning. Nothing could be more obvious than this one. F9 now behaves just like a CPA. They chase a guaranteed return. Whether it be moving planes to DL, taking any subsidy they can find, or running charters for Apple; F9 is eager to not have to live with their own bad decisions. The only route planning skill they have shown is the ability to cut and run. Rating: F-
Fleet= CPAs are very good at negotiating the price on airplanes and getting them cheaply, BUT only after the CPA partner has told them how many they need and when. In the absence of the latter, F9 has negotiated very good deals with Airbus...and Embraer...and Bombardier... Did we miss anybody? The Boeing order must be in the works. Once again, where they have gone wrong is the part that is usually spoon-fed to them. "How many do they need and when". They ordered way too many planes from way too many manufacturers chasing "a good deal" and can't even seem to occupy their existing fleet. The worst part is that saddling the company with all these orders makes it unsellable which was supposedly their goal. BTW, did they ever firm the NEOs? Rating: D

This is going to be a Harvard Case Study on application of the wrong management principles to a seemingly similar, but actually VERY different business.
 
Flighty
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RE: Chautauqua Parking All F9 ERJ's?

Tue Sep 13, 2011 3:05 pm

Quoting mariner (Reply 117):
I have never claimed to know the numbers they would be in any other situation.

Break-even load factors usually vary for every single route and every single airline. Even in a fleet, different owners of aircraft (or lease conditions) could result in different BELF for each plane. In a nutshell, BELF is a projection by outsiders who aren't in the airline business.
 
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RE: Chautauqua Parking All F9 ERJ's?

Tue Sep 13, 2011 4:27 pm

Quoting enilria (Reply 98):
Well, in all honesty, FLYi had both a revenue and a cost problem. They tried to build an LCC hub against an entrenched legacy using the highest cost airplane ever employed in LCC service (except maybe F9 and the E135 LOL). That was crazy from day 1. Oil would probably have needed to be -$25 for them to breakeven.

I don't think it's all that different for the E145 at MKE. At least at IAD, Independence had a very large market from which to draw. MKE doesn't draw as naturally from Chicago as IAD does from the entire D.C. metro area, and the motivation to drive to MKE from Chicago is blunted by the large WN presence at MDW in virtually every market served non-stop by F9 from MKE. DH served a large number of markets with no other LCC service to WAS/BWI.

F9 wasn't trying to put anywhere near the capacity into the market that DH tried, but then again, MKE is a lot smaller, too. And the unit cost for DH's 50-seat CRJ's was comparable to RP's 50-seat ERJ's.

Quoting enilria (Reply 98):
Well, there are also all these subsidy deals they keep taking.

True. If there is a good business case for a market, it probably works with or without the subsidy. I suppose if people are willing to give them free money to try something they would have anyway, it makes sense, but if it distorts their choices of routes then it's harmful.

Quoting enilria (Reply 99):
As I documented, the E190 is not a magic airplane economically. It is only slightly better than the E170 and does not gain "free" seats thanks to the larger engine and associated fuel burn.

I think the "magic" at Republic lies in the fact that the labor cost per hour of the E170 and E190 is the same, due to the company's decision to "deactivate" one seat on the E190.

Quoting bjorn14 (Reply 104):
Market cap for RJET is $135.7MM after paying $108MM for F9 me thinks they way over paid for what was essentially a brand with no real assets

The market cap is sitting at one quarter of the book value of RJET's assets, which says a lot about Wall Street's skepticism regarding the prospects for the business. Based on the fixed-fee business's pre-tax net income of about 40 cents per share for the first six months, RJET should be trading in the $10-15 range if they had no branded subsidiary -- but it's trading at $3, so the branded operation has a very large negative value to the enterprise as a whole.

Perhaps the strategy is to just give the majority share of Frontier to the labor groups agreeing to concessions, lock Frontier into long-term CPA agreements for capacity, and hope that the labor groups at Frontier will take whatever ongoing cuts are necessary to preserve their jobs and equity.

Quoting FRNT787 (Reply 109):
If they were ready to cut and run for $25 million, then why did they just agree to pump another $70 million into it. The BOD obviously has at least some faith in the restructuring plan and the man implementing it.

I don't think the BOD was actually investing $70 million into branded; they were just going to let branded borrow more against its own assets (which is fine if they intend to spin it off).

Quoting mariner (Reply 117):
As to the smaller ERJ's, since you have been saying - for months - that they can't make money in the Frontier situation, the routes they fly, the numbers I have seen confirm exactly that. So I really don't know why there is an issue

I think the issue has been the spirited defense of the use of ERJ's -- ostensibly to backfill for the exit of the E170's -- and the denial that branded is the red-headed stepchild of the business when there's someone else willing to pay for CPA. There's no real coherent planning for branded when the fleet planning amounts to flying what no one else wants.
 
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RE: Chautauqua Parking All F9 ERJ's?

Tue Sep 13, 2011 6:28 pm

Quoting ScottB (Reply 123):
I think the "magic" at Republic lies in the fact that the labor cost per hour of the E170 and E190 is the same, due to the company's decision to "deactivate" one seat on the E190.

I have observed that they crew it with 3 FA's, at least sometimes.
 
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mariner
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RE: Chautauqua Parking All F9 ERJ's?

Tue Sep 13, 2011 6:39 pm

Quoting ScottB (Reply 123):
I think the issue has been the spirited defense of the use of ERJ's -- ostensibly to backfill for the exit of the E170's

I really don't think that Frontier should be blamed for what some a.net posters say and the major thing I have defended is timing.

The problem didn't reveal itself in full force until last Q1 and the primary issue became the E170's, because a solution presented itself first.

This is apart of a very complex and comprehensive restructure and these things don't happen overnight

Quoting ScottB (Reply 123):
and the denial that branded is the red-headed stepchild of the business when there's someone else willing to pay for CPA

I'll continue with that denial. I know it has become common currency among the Frontier bashers, as the subsidy thing has, but not I.

I think something very important is happening here which I've discussed in the appropriate thread. I don't feel like expanding on it here because I don't want wars in two threads.

I'll limit my comments here to this particular issue and the facts that I know.

mariner

[Edited 2011-09-13 11:54:35]
aeternum nauta
 
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enilria
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RE: Chautauqua Parking All F9 ERJ's?

Tue Sep 13, 2011 7:14 pm

Quoting ScottB (Reply 123):
F9 wasn't trying to put anywhere near the capacity into the market that DH tried, but then again, MKE is a lot smaller, too. And the unit cost for DH's 50-seat CRJ's was comparable to RP's 50-seat ERJ's.

I suppose the parallel is in both cases they attempted to fly 50 seaters or smaller as an "LCC". I just give F9 a little more credit than FLYi. FLYi put $59 fares in those markets thinking they could run 7 flights per day and make money. F9 didn't trash their own markets to levels that couldn't make money. That was FLYi's horrible flaw, moreso than anything that F9/RJET has done, but in either case it is simply two different points on the wrong side of scale tipped toward red ink.

Quoting ScottB (Reply 123):
it makes sense, but if it distorts their choices of routes then it's harmful.

It has definitely done that.

Quoting ScottB (Reply 123):
Quoting enilria (Reply 99):
As I documented, the E190 is not a magic airplane economically. It is only slightly better than the E170 and does not gain "free" seats thanks to the larger engine and associated fuel burn.

I think the "magic" at Republic lies in the fact that the labor cost per hour of the E170 and E190 is the same, due to the company's decision to "deactivate" one seat on the E190.

Fair point, but I still don't think the economics are more than a few points difference.

Quoting ScottB (Reply 123):
There's no real coherent planning for branded when the fleet planning amounts to flying what no one else wants.

Well stated.

Quoting Flighty (Reply 124):
I have observed that they crew it with 3 FA's, at least sometimes.

I hope one was non-revving.

Quoting mariner (Reply 125):
The problem didn't reveal itself in full force until last Q1 and the primary issue became the E170's, because a solution presented itself first.

We should all be glad no legacy wants Airbus under CPA or this thread would be a memorial.

Quoting mariner (Reply 125):
the facts that I know.

 
 
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mariner
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RE: Chautauqua Parking All F9 ERJ's?

Tue Sep 13, 2011 7:21 pm

Quoting enilria (Reply 126):
We should all be glad no legacy wants Airbus under CPA or this thread would be a memorial.

I'm not going to bite, no matter how hard you try.

I have already made my position clear on this subject - see post #125 - and I see no basis for that statement and I have no idea what your smiley means after the subsequent quote of me.

mariner
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n7371f
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RE: Chautauqua Parking All F9 ERJ's?

Tue Sep 13, 2011 9:00 pm

Got a notice that Frontier has informed the DOT it is pulling the EAS flights to Northern Wisconsin & Michigan. No other specs given.
 
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mke717spotter
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RE: Chautauqua Parking All F9 ERJ's?

Tue Sep 13, 2011 9:06 pm

Quoting n7371f (Reply 128):
Got a notice that Frontier has informed the DOT it is pulling the EAS flights to Northern Wisconsin & Michigan. No other specs given.

There were a handful of other EAS routes up for bid at the end of August and there was some talk that F9 might jump in on some of them, but obviously that's not gonna happen anymore. In fact, the two EAS routes they currently fly were one of the few justifications they had for keeping the ERJs around.
Will you watch the Cleveland Browns and the Detroit Lions on Sunday? Only if coach Eric Mangini resigned after a loss.
 
n917me
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RE: Chautauqua Parking All F9 ERJ's?

Tue Sep 13, 2011 9:38 pm

Yep.. You are correct, IWD, IMT & MBL are closing.
 
ScottB
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RE: Chautauqua Parking All F9 ERJ's?

Tue Sep 13, 2011 9:58 pm

Quoting mariner (Reply 125):
I'll continue with that denial. I know it has become common currency among the Frontier bashers, as the subsidy thing has, but not I.

Actions (the ones emanating from Indianapolis, not New Zealand) speak louder than words. As you say yourself:

Quoting mariner (Reply 97):
The ERJ operation at MKE represents about 40% of the loss in the first half of the year.

Much of that precedes the removal of E170's from the branded operation -- so it was obviously known that the ERJ's were a disaster before they were slated to replace the E170's going into CPA for Delta. Ostensibly it was to be a stopgap until new E190's were to arrive, and yet those aren't going to MKE after all (are they even coming?).

Quoting mariner (Reply 125):
The problem didn't reveal itself in full force until last Q1 and the primary issue became the E170's, because a solution presented itself first.

I doubt MKE has made money since RAH bought what was left of YX, and I strongly suspect that the ERJ's have been a major contributor to the ongoing losses. The "solution" of putting the E170's into CPA is clearly better for RAH as a whole, no doubt, but the backup plan for branded was a steaming pile of poo.

Quoting n7371f (Reply 128):
Got a notice that Frontier has informed the DOT it is pulling the EAS flights to Northern Wisconsin & Michigan. No other specs given.

If that is indeed true, the ERJ operation at MKE is done; the EAS flights at the very least were guaranteed to make a meager profit.
 
ScottB
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RE: Chautauqua Parking All F9 ERJ's?

Tue Sep 13, 2011 10:10 pm

Quoting n7371f (Reply 128):
Got a notice that Frontier has informed the DOT it is pulling the EAS flights to Northern Wisconsin & Michigan. No other specs given.

Yep. Some of the relevant docket ID's:

RHI: DOT-OST-2000-8327
MBL: DOT-OST-1996-1711
IWD: DOT-OST-1996-1711

I couldn't find IMT.
 
mikefrommke
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RE: Chautauqua Parking All F9 ERJ's?

Tue Sep 13, 2011 10:17 pm

Quoting ScottB (Reply 131):
Ostensibly it was to be a stopgap until new E190's were to arrive, and yet those aren't going to MKE after all (are they even coming?).

6 will be coming online through next year. Nothing has been stated about the remaining 18 from the LOI.

Quoting ScottB (Reply 131):
I doubt MKE has made money since RAH bought what was left of YX, and I strongly suspect that the ERJ's have been a major contributor to the ongoing losses. The "solution" of putting the E170's into CPA is clearly better for RAH as a whole, no doubt, but the backup plan for branded was a steaming pile of poo.
MKE has been losing money for a lot of airlines for a long time. It was losing money for YX before RJET bought them, and there is no reason to believe that the purchase would have made it profitable all of a sudden. The ERJs in MKE was a YX decision.

Given that these routes will end in March, I wouldn't be terribly surprised to hear that this is also the date the rest of the ERJs get parked. Which routes will be cut and which will get upped to the E90? I'm assuming this corresponds with the E90s being used for MSN-MCO and DSM-MCO being freed up as well as some new birds coming, so there should be some lift to support this.

[Edited 2011-09-13 15:29:11]
 
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mariner
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RE: Chautauqua Parking All F9 ERJ's?

Wed Sep 14, 2011 9:24 am

Quoting ScottB (Reply 131):
Actions (the ones emanating from Indianapolis, not New Zealand) speak louder than words.

There are no actions emanating from New Zealand. Only words.

Quoting ScottB (Reply 131):
Much of that precedes the removal of E170's from the branded operation -- so it was obviously known that the ERJ's were a disaster before they were slated to replace the E170's going into CPA for Delta.

The full force of the issue only revealed itself in Q1. Solutions had to be found, and they take time. I think it would have been spectacularly foolish to have dumped that number of aircraft, with nowhere to send them, prior to the summer, when higher load factors, to some extent, alleviated the problem, as did the somewhat lower price of oil.

Quoting ScottB (Reply 131):
Ostensibly it was to be a stopgap until new E190's were to arrive, and yet those aren't going to MKE after all (are they even coming?).

Ask the IBT.

I'm always ready to discuss these things, but if this is the level of the debate:

Quoting ScottB (Reply 131):
The "solution" of putting the E170's into CPA is clearly better for RAH as a whole, no doubt, but the backup plan for branded was a steaming pile of poo.

I don't see the point in attempting a response.

mariner

[Edited 2011-09-14 02:27:23]
aeternum nauta
 
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JBo
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RE: Chautauqua Parking All F9 ERJ's?

Wed Sep 14, 2011 12:48 pm

Quoting ScottB (Reply 132):
RHI: DOT-OST-2000-8327
MBL: DOT-OST-1996-1711
IWD: DOT-OST-1996-1711

I couldn't find IMT.

Correction, IWD is DOT-OST-1996-1266.

IMT is not involved at all with F9, but their DOT file is DOT-OST-1999-5175 for reference.
I'd take the awe of understanding over the awe of ignorance any day.
 
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enilria
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RE: Chautauqua Parking All F9 ERJ's?

Wed Sep 14, 2011 1:48 pm

Quoting n917me (Reply 130):
Yep.. You are correct, IWD, IMT & MBL are closing.

How long did that last? A few months?

Quoting mariner (Reply 134):
The full force of the issue only revealed itself in Q1.
Quoting ScottB (Reply 131):
Much of that precedes the removal of E170's from the branded operation -- so it was obviously known that the ERJ's were a disaster before they were slated to replace the E170's going into CPA for Delta. Ostensibly it was to be a stopgap until new E190's were to arrive, and yet those aren't going to MKE after all (are they even coming?).

As we have endlessly stated, the ERJs have surely been losing since oil topped $70 or $80 which was a long time ago. 1Q was not a period where oil was at record levels and it was actually not the low point for MKE revenue either. I'd be fairly certain the prior Fall was worse.

Quoting mikefrommke (Reply 133):
MKE has been losing money for a lot of airlines for a long time. It was losing money for YX before RJET bought them, and there is no reason to believe that the purchase would have made it profitable all of a sudden.
Quoting ScottB (Reply 131):
I doubt MKE has made money since RAH bought what was left of YX,

When has it ever made money? At least F9 has had profitable periods. YX hasn't made money in such a long time.

Quoting mikefrommke (Reply 133):
Nothing has been stated about the remaining 18 from the LOI.

...or the Airbus NEOs. Aren't they still an LOI? They got the labor agreements that were supposedly the sticking point, but there is no firm order is there??? Perhaps the overall viability of the company has actually now been factored into the ordering of aircraft. They must have actually hired someone to do fleet/route financial analysis instead of using a monkey and a ouija board.

Quoting mikefrommke (Reply 133):
Given that these routes will end in March, I wouldn't be terribly surprised to hear that this is also the date the rest of the ERJs get parked.

Maybe, but given F9 fleet planning they will probably operate a tiny fleet ala the Q400 for months just to fly these 3 routes. LOL
 
mikefrommke
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RE: Chautauqua Parking All F9 ERJ's?

Wed Sep 14, 2011 2:07 pm

Quoting enilria (Reply 136):
Maybe, but given F9 fleet planning they will probably operate a tiny fleet ala the Q400 for months just to fly these 3 routes. LOL

That may be so, but the ERJ doesn't have the same small fleet problems as the Q400. CHQ has a pretty substantial fleet of ERJs, so if they can find a way to generate revenue with only 3 birds then more power to them.
 
ScottB
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RE: Chautauqua Parking All F9 ERJ's?

Wed Sep 14, 2011 2:23 pm

Quoting JBo (Reply 135):
Correction, IWD is DOT-OST-1996-1266

Cut-and-paste error...   

Quoting enilria (Reply 136):
When has it ever made money?

YX (and so presumably MKE) was modestly profitable in 2006 and the first half of 2007; one would assume that was part of why FL was willing to buy them.

Quoting mikefrommke (Reply 133):
MKE has been losing money for a lot of airlines for a long time. It was losing money for YX before RJET bought them, and there is no reason to believe that the purchase would have made it profitable all of a sudden. The ERJs in MKE was a YX decision.

And yet RAH has owned the former YX operation/network for over two years at this point, and they are only now getting around to fixing MKE?
 
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enilria
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RE: Chautauqua Parking All F9 ERJ's?

Wed Sep 14, 2011 2:36 pm

Quoting mikefrommke (Reply 137):
That may be so, but the ERJ doesn't have the same small fleet problems as the Q400. CHQ has a pretty substantial fleet of ERJs, so if they can find a way to generate revenue with only 3 birds then more power to them.

True, so then I would think they will not stay in the other money losing MKE markets all Winter only to drop them in March.

Also, even if routes like PIT were making money before (doubtful), the loss of connections from the demise of the MKE "hub" will kill them...particularly when tied to a forced increase in aircraft size.

Quoting ScottB (Reply 138):
YX (and so presumably MKE) was modestly profitable in 2006 and the first half of 2007; one would assume that was part of why FL was willing to buy them.

OK, so they had a full year profit 5 years ago. Eek...

Quoting ScottB (Reply 138):
And yet RAH has owned the former YX operation/network for over two years at this point, and they are only now getting around to fixing MKE?

Let's cut through it. They thought they could beat AirTran, so they stuck with it. They realize now that they can't beat WN. The question is whether WN will really stay large in MKE. I doubt they will, but F9 doesn't have the money to wait it out. They probably will return if WN pulls back.
 
FRNT787
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RE: Chautauqua Parking All F9 ERJ's?

Wed Sep 14, 2011 3:14 pm

Quoting enilria (Reply 136):
...or the Airbus NEOs. Aren't they still an LOI? They got the labor agreements that were supposedly the sticking point, but there is no firm order is there??? Perhaps the overall viability of the company has actually now been factored into the ordering of aircraft. They must have actually hired someone to do fleet/route financial analysis instead of using a monkey and a ouija board.

...or it may just have something to do with the IBT. But why let that get in the way of trying to get some one-liners out?
 
mikefrommke
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RE: Chautauqua Parking All F9 ERJ's?

Wed Sep 14, 2011 3:33 pm

Quoting enilria (Reply 139):
True, so then I would think they will not stay in the other money losing MKE markets all Winter only to drop them in March.

They may decide to keep the ERJ on a few of the stronger routes until March when they can put the E90 on them. Putting the E90 on them would be a greater loss in the winter months, but dropping the route altogether would hurt future sales. Come March, they upgauge to the E90 and hope that by fall next year WN has made some cuts at MKE so the E90 can stick.

Quoting enilria (Reply 139):
I doubt they will, but F9 doesn't have the money to wait it out. They probably will return if WN pulls back.

That seems to be the current plan. I agree they need to find a way to make money regardless of what the competition does, but if WN does pull back like a lot of people expect them to, I would guess F9 would be the one to take advantage of it assuming that they can make money without the competition.
 
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Jamake1
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RE: Chautauqua Parking All F9 ERJ's?

Wed Sep 14, 2011 3:56 pm

Quoting enilria (Reply 139):
They probably will return if WN pulls back.

This is such a fascinating...albeit sad...discussion. I find your viewpoints especially compelling, Enilria.

From all that I have read with regard to the current situation at F9 and RAH, it seems that from my vantage point of casual observer that WN really went on the offensive against F9...both in DEN and MKE...following WN's unsuccessful bid. With WN having come away from the failed deal fully armed with F9's proprietary information (from having viewed their books during F9's restructuring) to take full advantage of that carrier's more vulnerable state, do you suppose this was WN's intent?

Secondly, do you suppose WN will stay in the MKE market until such time that F9 is forced into another bankruptcy filing?

Thoughts?
Come fly the sun.
 
ScottB
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RE: Chautauqua Parking All F9 ERJ's?

Wed Sep 14, 2011 4:12 pm

Quoting enilria (Reply 139):
Let's cut through it. They thought they could beat AirTran, so they stuck with it. They realize now that they can't beat WN. The question is whether WN will really stay large in MKE. I doubt they will, but F9 doesn't have the money to wait it out.

Perhaps, but I think AirTran had just as much at stake in MKE and the advantage of OO being willing to take on the RJ risk. Maybe WN keeps the pressure on in MKE as a bit of payback to BB for the Frontier auction.
 
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enilria
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RE: Chautauqua Parking All F9 ERJ's?

Wed Sep 14, 2011 4:25 pm

Quoting FRNT787 (Reply 140):
...or it may just have something to do with the IBT. But why let that get in the way of trying to get some one-liners out?

Well, that is a possibility, but I still question ordering all these aircraft with the company in relatively dire straits.

Quoting mikefrommke (Reply 141):
They may decide to keep the ERJ on a few of the stronger routes until March when they can put the E90 on them. Putting the E90 on them would be a greater loss in the winter months, but dropping the route altogether would hurt future sales. Come March, they upgauge to the E90 and hope that by fall next year WN has made some cuts at MKE so the E90 can stick.

Given the direction in MKE, it would be very risky to upgrade routes from ERJs to double-sized E190s, but given past behavior that is a possibility. Even if they limped through the Summer like that, what would be the plan for next Fall/Winter?

Quoting mikefrommke (Reply 141):
but if WN does pull back like a lot of people expect them to, I would guess F9 would be the one to take advantage of it assuming that they can make money without the competition.

It would be a pity in that many people would have shredded their F9 frequent flyer card by then, but it's the price of poker I guess.

Quoting jamake1 (Reply 142):
Quoting enilria (Reply 139):
They probably will return if WN pulls back.
This is such a fascinating...albeit sad...discussion. I find your viewpoints especially compelling, Enilria.

Thank you. I appreciate that, but hear it rarely on the F9 threads.

Quoting jamake1 (Reply 142):
From all that I have read with regard to the current situation at F9 and RAH, it seems that from my vantage point of casual observer that WN really went on the offensive against F9...both in DEN and MKE...following WN's unsuccessful bid.

I'm going to diverge from that a bit. I think WN decided to attack F9 long before that. I used to document how WN added every station in its network to DEN that overlapped F9 as their initial growth strategy. People said it was a coincidence and that UA was the target. Then they attempted to buy F9 in Ch11 and people on here said it would destroy jobs. IMHO, WN entered PHL (what is it now 10 years ago?) and immediately struggled against US. US filed Ch11 and emerged strong enough to eventually push them "out" of most markets. We are still seeing that unwind now. WN learned from that you can't kill a legacy, there is no winning. So, they decided to go after LCCs because 1) they have lower CASM (and are thus a threat) and 2) they can be killed (not too big to fail). WN entered DEN to attack F9, they absolutely entered SFO to keep VX from stealing as much intra-Cali traffic, they entered IAD to prevent the other LCCs from getting a beachhead post-FLYi, and more recently they have entered BOS/LGA partially because of B6. In the latter case, I don't think B6 is the primary motivation because B6 is somewhat immune to attack due to their position in slotted airports. I suspect they entered MKE as a triangulation to both pressure FL and F9. It was a 2 for 1. It drove down the price of FL to purchase and may be the death of F9. UA or F9 must ultimately buy F9 or it is going to be a long painful death, barring fuel crashing or the economy spiking. The dirty little secret is that F9 was born to be a UA* carrier, but UA was unable to code share on mainline A/C despite being able to code share on the BAE-146 which wasn't that different in size from the 737-200. Since then, there have been many overtures by F9 to UA, but they have always been rebuffed. In the last few years there were attempts to share Lynx with UA, but ultimately it never happened. WN is smarter than UA (by a lot). They know it is cheaper to buy than fight.
Quoting jamake1 (Reply 142):
With WN having come away from the failed deal fully armed with F9's proprietary information (from having viewed their books during F9's restructuring) to take full advantage of that carrier's more vulnerable state, do you suppose this was WN's intent?

Certainly that aided them in applying additional pressure (capacity) in markets where F9 was viable.

Quoting jamake1 (Reply 142):
Secondly, do you suppose WN will stay in the MKE market until such time that F9 is forced into another bankruptcy filing?

WN will never "leave" MKE. The question is really whether they will maintain the AirTran capacity. I can say with great certainty that they will not. DSM is definitely going to go away and DCA is virtually guaranteed to move to MDW. That probably starts the ball rolling downward. F9 pulling back only makes it easier for them to back down there. They will not leave, however. I expect they will always retain 20-25 departures which is enough to make the market lower yield than it was in the YX-only era.
 
toltommy
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RE: Chautauqua Parking All F9 ERJ's?

Wed Sep 14, 2011 4:47 pm

Quoting enilria (Reply 144):
WN learned from that you can't kill a legacy, there is no winning.
Quoting enilria (Reply 144):
They know it is cheaper to buy than fight.

But didn't WN just buy a fight at ATL? If they are retreating from US, how will they fare against DL? FL has a traditional hub at ATL, which will likely be dismantled in favor of WN's focus city type operation. How does WN win in ATL?
A300/A310/A319/A320/A321/A332/A333 / 707/712/727/732/733/734/735/738/739/752/753
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ScottB
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RE: Chautauqua Parking All F9 ERJ's?

Wed Sep 14, 2011 5:19 pm

Quoting enilria (Reply 144):
I'm going to diverge from that a bit. I think WN decided to attack F9 long before that. I used to document how WN added every station in its network to DEN that overlapped F9 as their initial growth strategy. People said it was a coincidence and that UA was the target. Then they attempted to buy F9 in Ch11 and people on here said it would destroy jobs.

Again I disagree on WN's strategy with respect to DEN. I still think they are and were in it to marginalize United at DEN. The "coincidence" in the overlap with F9, in my opinion, results more from the fact that they were adding the large O&D markets from DEN, which were also the markets which F9 was most likely to serve. There is far more overlap between WN and UA at DEN.

Honestly, I think LUV's attempt to purchase Frontier out of bankruptcy was rooted in opportunism -- it would have almost instantly given them the DEN market presence they ultimately wanted. If the bid for bankrupt Frontier had had more planning behind it, I suspect they would have thrown their hat into the ring far earlier and perhaps might have gotten the showstopper labor issues ironed out in time.

Quoting enilria (Reply 144):
WN will never "leave" MKE. The question is really whether they will maintain the AirTran capacity. I can say with great certainty that they will not. DSM is definitely going to go away and DCA is virtually guaranteed to move to MDW. That probably starts the ball rolling downward. F9 pulling back only makes it easier for them to back down there. They will not leave, however. I expect they will always retain 20-25 departures which is enough to make the market lower yield than it was in the YX-only era.

True, although I expect MKE to end up with 40 or so WN departures. There's just not much money to be made on near-monopolies from MKE to DCA and DFW (well, until 2014 for DFW).
 
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mariner
Posts: 19473
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RE: Chautauqua Parking All F9 ERJ's?

Wed Sep 14, 2011 5:30 pm

Quoting enilria (Reply 136):
As we have endlessly stated, the ERJs have surely been losing since oil topped $70 or $80 which was a long time ago. 1Q was not a period where oil was at record levels and it was actually not the low point for MKE revenue either. I'd be fairly certain the prior Fall was worse.

I'll just repeat myself. The full force of it and the need for a dramatic solution only revealed itself last 1Q as oil began its run to $110 plus (WTI) in April 2011.

Nymex WTI:



That doesn't mean it wasn't a considered problem prior to that, and nothing happens in isolation.

The basis of the restructure being that the airline must be able to survive with oil (WTI) well in excess of $100.

mariner

[Edited 2011-09-14 10:43:14]
aeternum nauta
 
kingcavalier
Posts: 412
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RE: Chautauqua Parking All F9 ERJ's?

Wed Sep 14, 2011 5:46 pm

Quoting enilria (Reply 144):
I used to document how WN added every station in its network to DEN that overlapped F9 as their initial growth strategy. People said it was a coincidence and that UA was the target.

Coincidence had nothing to do with it but where else was WN supposed to add service from DEN except to the large markets, cities that were already in their network. There was a reason UA and F9 flew DEN to LAS. Was WN not supposed to add LAS when it reentered DEN? You say it was to attack F9. I say it was WN doing what they wanted a not worrying about pissant F9. I think WN's additions were natural. Now, if WN starts serving DRO from DEN, then I might raise an eyebrow and question some ulterior motive. Even with WN's shared routes from DEN, F9 still (will) serves 36 airports from DEN that WN does not.

ANC
ASE
BIL
BKG
BZN
CAK
COS
CUN
CZM
DAY
DFW
DRO
DSM
FAI
FSD
GRB
GRR
HDN
ICT
JAC
LIR
LIT
MSN
MZT
PHF
PSP
PVR
PVU
RFD
RSW
SBA
SDF
SJD
SJO
TYS
ZIH

And if airports like TOL & STS have their way, we could see F9 birds landing there from DEN in the not so distant future.
Travel is fatal to prejudice, bigotry, and narrow-mindedness
 
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enilria
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RE: Chautauqua Parking All F9 ERJ's?

Wed Sep 14, 2011 5:56 pm

Quoting TOLtommy (Reply 145):
But didn't WN just buy a fight at ATL?

I think the goal is wholly different. WN tried to bore their way into PHL with the goal of finally polishing US off. They had been growing by chasing US back to 1990 when WN basically replaced PSA in California. Eventually, WN took BWI from US with hardly a fight and with the added bonus of gaining control of PHX, WN attacked in PHL and lost...thanks to the Ch11 laws.

WN has no allusions of killing DL and if they do, they are ill-founded. They bought an existing customer base and they hope to migrate that customer base to what WN intends to become in ATL...which will be very different from what FL was. It remains to be seen whether that is good for DL or bad. If WN is really selling 717s to DL as is rumored it would appear to be a bit of carrot rather than a stick.

Quoting TOLtommy (Reply 145):
FL has a traditional hub at ATL, which will likely be dismantled in favor of WN's focus city type operation. How does WN win in ATL?

Destruction of the hub will mean less Florida and more of everything else IMHO. The net is still probably negative because some of the tiny stations will go away.

Quoting ScottB (Reply 146):
There is far more overlap between WN and UA at DEN.
WN serves 49% of F9's DEN markets non-stop (32 of 65). They only serve 35% of UA's (43 of 121). That's the way DOT calculates overlap. ASM overlap would be even moreso.

Quoting ScottB (Reply 146):
True, although I expect MKE to end up with 40 or so WN departures. There's just not much money to be made on near-monopolies from MKE to DCA and DFW (well, until 2014 for DFW).

It depends upon how much they want to avoid competing with MDW and how concerned they are about F9 returning.

[Edited 2011-09-14 10:57:08]

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