Branson wants to try and sway Dallas for DAL gates

[eolesen]

would you like to provide a source for that cut and paste?

It's straight out of the McPaper link two pages back.

what kind of market value do you suppose any regional carrier has these days?

Probably little to no value. Perhaps they should just give it to the pilots for $1, and be done with it. They'd be able to make up for the loss rather quickly: Skywest "only" spent $133M on the purchase, and in 1Q14 alone, they drove a $54M loss. Carried out over 2010 thru 2013, they've lost considerably more than they invested, and it's not getting much better.

That's why question in St. George has to be whether or not is' worth having Skywest's profitability being erased by the operating losses of ExpressJet. Simultaneously, keeping EV in the fold puts their larger contracts with the Big Three at risk should the labor situation deteriorate even further than it already may have.

30% of EV's flying is for DL, 67% is for UA, and 3% is for AA.

If the price is low enough, there's never a shortage of egos who think they could run an airline.

Perhaps UA might even consider buying them from Skywest... they certainly have the most exposure, and it would provide them with a wholly owned and a flow-thru might be enough to stem the tide of attrition for a while.

And do you think DL is going to amend its contracts with SkyWest to remove its ability to fire both of them for the performance of either one?

No need to amend the contracts. If SkyWest is no longer the owner, DL would have an interesting lawsuit on its hands for firing a third party.

So, will Southwest now file its first schedule based on a lot fewer cities - and minus the abundance of other airline hubs that were in the second set of markets they would have started if they got the two gates?

They'll file what's economically lucrative for them, but I also wouldn't be surprised to see some extra emphasis on ATL, MSP and DTW.

 

[swamt]

Gates were awarded to VA, YES wt, VA, not VX as you wish we would all speak, VA.  What other airline out here was trying to access LF with the VA title.  Get over it.  Now I ask you, WT, what gates will Delta operate out of at LF now that Delta has lost the fight for the 2 divested gates at LF? And yes YOU lost the original bet between you and I of who would not get the gates.  Now we will all see if Delta stays or goes. Will they (Delta) end up operating out of the UAL gates leased from E.J. the owners?  I bet they will... 

 

[eolesen]

Gates were awarded to VA, YES wt, VA, not VX

Uh, no.

VX is Virgin America.

VA is indeed Virgin Australia. I worked on their startup a few years back.

 

[WorldTraveler]

the whole RJ industry is not directly related to the DAL issue and certainly has no effect on WN. The impact is between DL and SkyWest who DL COULD pressure to allow access, perhaps preferentially over UA. And it is also possible that DL could gain access under DAL's other carrier accommodation processes.

The bottom line is that I'm not sure much of anyone expected DL or WN to snag the two gates from Virgin. The issue is whether DL and WN can achieve what they want at DAL despite Virgin's presence.

It is also worth noting that Virgin's departure at DFW does provide an opening for DL there if DL chooses to take it. Virgin does get about 20% share of DFW-LAX and SFO. DL is probably not interested in going after SFO but they likely could add DFW-LAX with or without DAL.

swamt,
you can go back and find our original bet (and again I commend you for being the only one to actually put your name on a bet) but IIRC was whether DL or WN would win OVER each other. Since the two gates are going to neither DL or WN, I think we both lost as far as the bet was concerned.

While I really do understand the disappointment you, Sharon, and other WN employees might have, nothing really changes in what WN can achieve at DAL. I said from the very beginning that WN has the ability to put enough seats into the DAL market to accommodate half of the top 20 markets from DFW that WN does not currently serve. WN will have to cut back the number of flights it uses to serve its inside Wright perimeter flights right now but can easily add enough flights in the top 20 markets to put more seats in the market than AA uses to serve half of the total local N. Texas market (since AA carries a lot of connections as well) plus more than what Virgin can add to DAL.
WN also needs to reduce the amount of connecting traffic thru DAL in order to maximize connections but also keep in mind that WN carries a lot of traffic to HOU from DAL which it can now carry nonstop. There is no reason to connect MCO-ABQ traffic, for example (a new O&D that will be created by WN's new DAL schedules) over DAL but instead thru other WN focus cities.

The market is there for WN to do swimmingly well at DAL and I still believe WN's plan will be to maximize the use of DAL and then seek to expand beyond DAL either internationally from DAL or at DFW.

You can be assured that a key factor that will be at play in whether WN wins approval to chip away at Wright is whether other carriers can access DAL; it would never be considered acceptable from an antitrust standpoint for WN to be able to further benefit from reductions in the WA or the 2006 agreement while other carriers can't get into DAL or serve it with enough flights to be meaningful.

I am totally supportive of all of the N. Texas limitations on aviation falling but only if the market is truly free for all carriers to come and go in the market as they can at both Houston and Chicago airports.

just a reminder that I signed WN's petition to gain the ability to serve longhaul domestic markets from DAL and their petition to gain int'l service from HOU.

 

[eolesen]

The RJ situation at Skywest with regard to OO and EV is probably more important than you'd think at first glance.

Subsidiary ExpressJet holds the lease, not parent Skywest. If XJ gets spun out or sold, so does that lease. If they're wound down, the gates could wind up with the City.

 

[WorldTraveler]

and DL's ability to reject BOTH operators' contracts with SkyWest is a huge stick which DL can use. SkyWest's future is at least 1/3 tied to DL.
BTW, there are several legal issues between DL and SkyWest Inc including the previously mentioned lawsuit. Atlantic Southeast/ExpressJet holds the lease on the terminal C gates at ATL as well.

It is hard to know how all of this comes into play but I still believe DL entered the contest to serve DAL knowing full well the stakes that were involved, with a recognition that they were coming from a difficult position because of the DOJ's preference for low cost carriers (whether right or not), and with plans to be able to succeed or or push it as far as it could.

WN pushed as far as it could, is likely to get nothing more than they already have, and will still succeed.

DL may or may not face the same fate. DAL is not the only means by which DL will grow its position in Texas where it know it is far too small compared to AA, WN, and UA.

DL also wants to protect its markets from N. Texas from being eroded by WN and Virgin's entry into some of those same markets and DL also wants to ensure that what WN gains from DL solely because WN will enter some markets, DL is able to get a similar amount of revenue from WN somewhere else in the N. Texas market.

I still believe DL one way or another will be at DAL but even if they are not, they definitely have a plan to limit any competitive impact from other carrier's growth and in fact grow DL's presence in the N. Texas market .

 

[swamt]

WT, I did some research.  Did not find the original bet as of yet, why don't you put a little effort into it too?  I know for sure the original bet was ONLY when Delta and SWA was bidding.  Then Virgin came into the game, as you posted, and gloated towards SWA.  I am posting it below, and as you can see I told from the very beginning that once VA got involved it would affect our bet as I said they would win the gates, happy reading:
 
--This may interfere with our bet WT.  Now that VA has posted why they need them and what they will do with them etc...  VA (I believe) is considered a LCC, therefore, I believe they will be given more weight than DL.  Like I said before,  if VA was to ask for them, they would be the biggest competitor, for the gates, against SWA.  They are even claiming to pull out of DFW, and this would completely restrict any further growth in N. Tx. to only 2 gates and very limited flights.  Hopefully SWA's reasons will prevail to the city of Dallas who will be making the decision on who will receive the gates and the DOJ will approve as long as all the anti-trust laws were followed.  SWA's home town city for the past 43 years plus, SWA history with keeping Dallas workers employed and keeping the airport open (the only carrier known for this), hopefully will prevail more positive to the city of Dallas.  However I will say this, VA being a LCC has some very convincing arguments on why they should be allowed to come in, more so than DL by a long shot.
 
WT, to be fair, if SWA does not get the gates, maybe the city will throw their hands up and say, screw it, DL you get one gate, and VA you get the other one.  You never know.    Wonder if we will hear of any more airlines putting in for the 2 gates at LF.  This will get very interesting...

 

[WorldTraveler]

swamt,
I REALLY am not interested in playing the blame game. WN didn't get what it wanted; the jury is still out on DL but the flights are still for sale. DL hasn't decided to throw in the towel yet.

WN will succeed in N. Texas. They are going to have fewer gates to work w/ than they have in other focus cities which means they are going to have to use them VERY efficiently. They may not be able to serve ALL of the markets they wanted to but they will have more than enough of a presence to have a very decent share of the TOTAL domestic N. Texas market.

And let's not forget that WN walked away from half of the slots at DCA; WN could have bought slots in the NE years ago. The world has scarce resources; WN chose not to act when it could have, expected they would get a handout to get caught up to the big 3 but will still have limitations just as they have.

Using what you have to the max is business. WN will work. For your sake, Sharon's, and WNmech, I hope they do.

Really.

 

[robbedagain]

actually WT  WN got a nmbr of slots at DCA from the AA/US merger and I think they'll do just fine at both DCA and at DAL

 

[WorldTraveler]

walked away in this context means won. yes, I am sure they will do fine.

 

[eolesen]

I found the bet. It's now invalid, since it was predicated on coming down to only DL and WN being interested in the gates.

http://www.airlineforums.com/topic/56733-wn-to-add-15-new-cities-from-dal/page-2#entry1059511
http://www.airlineforums.com/topic/56733-wn-to-add-15-new-cities-from-dal/page-2#entry1059712

Lots of other great claims in the multitude of DAL threads which didn't come to pass... maybe someday I'll timeline them.

 

[WorldTraveler]

which is what I said.

the only claim that matters at this point is whether DL will get into DAL... and I still stand by that they will.

DL's inventory does not appear to have been touched. Someone needs to tell them they aren't going to DAL if that is the case.

 

[eolesen]

Nah, that's not all you said. I'll save that for a slow week.

 

[WorldTraveler]

again, my point from the beginning and remains today that DL will gain access to DAL. All the other comments can be framed in the success or failure of DL to achieve its goals.

 

[Kev3188]

No, you're framing it as if we're on the outside looking in.
 
We have access now.