Fly I Hits Chapter 11

[Ch. 12]

Nobody had tried this model before... granted, it was a large gamble, but I won't agree that there was a 0% chance of being successful. I give the Flyi kids lots of credit for giving it their best shot. Unfortunately, though, it looks like Ch. 7 is not far off.

You're right that nobody had tried this before but I cannot give Flyi mgmt ANY credit for giving it a shot. Reason being is that they went into a market with traditionally high fares and didn't just reduce them slightly (ala B6, WN, or FL entering a market) but rather slashed them to already unprofitable levels. And then they continued to offer junk fares as their main product. We're not talking discount here. If they were a large carrier, the DOJ would have snapped them up long ago for predatory pricing but they were never in a position to be a predator. Also...even though IAD was largely missed by the lowfare carriers, BWI was just down the road and offered quite low fares. Again...I agree that this had never been done before but it wasn't even an intelligent biz decision. (and I haven't even mentioned the RJ decision which was...even if untried...never a sound decision). I could offer 1 penny combo meals at McDonalds b/c nobody has done it but I know from the outset that it will NEVER make money. It is too bad that they didn't take YV up on their acquisition attempt. Employees and shareholders would be MUCH better off today...and that's saying alot for a Mesa employee.

 

[whlinder]

What's the old phrase ... "It seemed like the right thing to do at the time..."

The recent filing by Mesaba shows that hanging on as a feeder for a Ch-11 legacy isn't necessarily a guarantee of success either. Kudos to FlyI for the attempt to find a different way to succeed. Maybe if fuel had prices had held down... Maybe if they didn't face so much Ch 11 competition in their markets .... Maybe if ....

Best Wishes and Good Luck in the afterlife.

Yeah it is hard to say any management team is worse than what FlyI's has proven to be. The worst part is that they place most of the blame on fuel, yet they would have lost money in Q2 if they had gotten all their jet fuel for free. That is just horrific management.

Outside factors (fuel) are simply speeding up the demise of this airline. There is a laundry list of things they could have done better from the start.
1. Been in the GDS'
2. Better pricing
3. Better marketing
4. Better loyalty program
5. More point to point flights/less reliance on hub connecting traffic, which would lead to better aircraft utilization and lower costs.

 

[corl737]

... even though IAD was largely missed by the lowfare carriers, BWI was just down the road and offered quite low fares.

SWA reported lower traffic in BWI the past couple of quarters attributed primarily to I-air's Dulles flights offering lower-than-low fares. It will be interesting to see where that traffic goes now ... back to SWA at BWI or to JB or "Theodore" at IAD. (AirTran is building a good presence at BWI, too.)

 

[boxer]

Playing the Blame Game

Flyi, the parent of Independence Air, said it filed for bankruptcy in part because of "extremely aggressive" competitive responses from larger airlines. In a filing, the airline said United Airlines and US Airways matched Independence Air's fares, cut restrictions, and increased advertising. Flyi filed for bankruptcy protection Monday. A US Airways spokesman said it takes all competition seriously and noted the market is very competitive because of excess capacity. <http://r.smartbrief.com/resp/xIqkxifLCwxtttClVO>The Washington Post (free registration) (11/9)

 

[bigman60]

Playing the Blame Game

Flyi, the parent of Independence Air, said it filed for bankruptcy in part because of "extremely aggressive" competitive responses from larger airlines. In a filing, the airline said United Airlines and US Airways matched Independence Air's fares, cut restrictions, and increased advertising. Flyi filed for bankruptcy protection Monday. A US Airways spokesman said it takes all competition seriously and noted the market is very competitive because of excess capacity. <http://r.smartbrief.com/resp/xIqkxifLCwxtttClVO>The Washington Post (free registration) (11/9)

Well what were they expecting?

 

[corl737]

Well what were they expecting?

As soon as they tried to operate against TWO Ch-11 airlines they were doomed! Still, as you said, even healty airlines would have competed well.

 

[Winglet]

Soon as they decided to operate high CASM RJs without the benefit of a sweetheart Pay-for-Departure guaranteed profit contract from a sugar-daddy major, they were doomed.

 

[Salmon37]

Soon as they decided to operate high CASM RJs without the benefit of a sweetheart Pay-for-Departure guaranteed profit contract from a sugar-daddy major, they were doomed.

Agreed. You can't make it in a $.07 CASM world with $.20 CASM airplanes.

 

[ringmaruf]

SWA reported lower traffic in BWI the past couple of quarters attributed primarily to I-air's Dulles flights offering lower-than-low fares. It will be interesting to see where that traffic goes now ... back to SWA at BWI or to JB or "Theodore" at IAD. (AirTran is building a good presence at BWI, too.)

The fare wars at IAD/DCA were only half the reason WN's traffic was hurting at BWI. The other is that WN cannibalized itself a bit when it opened PHL, as a number of pax were going there who previously flew them out of BWI.

 

[corl737]

The fare wars at IAD/DCA were only half the reason WN's traffic was hurting at BWI. The other is that WN cannibalized itself a bit when it opened PHL, as a number of pax were going there who previously flew them out of BWI.

Agree. Fortunately the increase in system-wide traffic attributable to the opening of PHL greatly outpaced the decline in BWI numbers.