Independence Air

[whlinder]

I think the new MCO RJ service is what is replacing the reduction in flights from RDU, etc.

Does anyone know if Independence will start CLT to Florida service, connecting in IAD, once they expand their Florida service? I noticed on their website that SAV, ATL and JAX are not available from CLT via IAD.

[post="170253"][/post]​

That's just dumb on FlyI's part. They shouldn't offer the ridiculous low fares to match a competitor, but at least offer to fly someone CLT-IAD-south of CLT for whatever their fares are for CLT-IAD and IAD-south of CLT, instead of making the passenger buy 2 tickets. I doub't they'd ever be the cheapest fare, except perhaps at the last minute, but why not offer it? I guess the only reason I can think of is that they want to be portrayed as low-fare, and fares CLT-IAD and IAD-south of CLT added together wouldn't fit that description.

 

[whlinder]

Well I've been calling for more distribution channels.... those seem to be coming shortly so we'll see if that helps.

 

[richb624]

Please correct me if I made a bad mistake.

Iair's cost per ASM is about 15 cents per ASM including all costs. Assuming a 50 passenger RJ with an average 300 mile trip, this would be about $2250 cost per trip. With a 60% load factor, Iair would break even with a $70 fare.

I am convinced Iair will do well for the following reasons:

Seven of the cities have no LCC service at all. Can you imagine LUV or Airtran introducing low-cost service to seven cities in one year. Remember when LUV introduces a new cities there are usually 6-8 flights to BWI, maybe 2 to MDW and/or Florida and not much else.

USAirways and Delta, albeit serving Reagan, have very high fares to nearly all the cities Iair is serving. PIT to DCA is $300 on average for U (3rq 2003); I haven't looked up the other U fares to DCA but I know they average two or three times the break-even Iair fare.

Iair has started low fare service at several airports which, I am convinced, have lots of pent-up demand. HPN, perhaps the highest air fare airport in the US, serves a market area of over 1.5 million but because of restrictions has a limited number of flights. I am sure Lansing service will tap into the market of air travelers with no low-fare options. For example, LUV does not fly DTW to BWI.

If one, in addition to flights to the DC area, considers a connecting flight from a city north of the Mason-Dixon to the south, Iair will serve (approx.) 225 city pairs. The overwhelming majority have neither non-stop service nor a reasonable low-fare routing. For most city pairs the option is an expensive fare, a connection in PIT, PHL, CVG (the latter two in most cases less direct than through IAD). In many cases the connection is between 2 commuter affiliate flights (no better than what is offered by Iair). Unlike Iair, U or Delta offers a choice of only 3 connections daily - Iair provides a connecting flight nearly every two hours. The high frequency more than makes up for a one-hour leg on a larger aircraft.

Although these are now thin markets, based on experience of LUV and Airtran, the average size of each market could easily grow from say 6000 per year to 15,000. (Check the current average fares from cities such as Syracuse, Portland, White Plains to the smaller cities in the south.) Or a total from 1.4 million to over 3 million.

In the long-term, when flights begin from IAD to the west, it will be in a position to offer low fares from a vast array of cities without low-fare competion.

 

[AnalyzeThis]

I Air-

Good luck on your launch Monday in Pittsburgh! I already bought a ticket
on you for the fall, beats non-rev'ing!

Love the thought behind Independence and wish you all the best, I hope your workforce loves what they do and just enjoys it!

Happy Launching!

 

[Ch. 12]

Rich-

The most recently posted CASM for IAir was 22.0 cents and that is excluding some costs. I tend to think that it is actually higher b/c it is impossible to run short haul RJs in the 15 cent range. Prior to going on their own, ACA had a RASM of 18 cents at 75% LFs. Since they had some costs absorbed by UA with the service they provided, I can only assume that the CASM is higher. And since they are now charging low fares and collecting less per passenger than the UA days, I tend to think that they are seriously hurting on less than 50% LFs. They would need much more than the 75% they used to get and they aren't.

I still say they are bleeding cash and that is not a good place to be come september.

 

[whlinder]

First west coast destination, LAX, is supposed to be announced in a couple of weeks.

 

[Hope777]

I am sure they are paying thru the nose for the Fleet Service work be contracted out to USAirways. If I wanted to reduce costs, I am sure it would be more cost effective to handle their own ramp work.

 

[RDUSWF]

Three roundtrips to IAD and each of the last 4 segments have been about 75% full (the first 2 were probably less then 50%). I like the service and will continue to fly them, especially with SWF online.

I do agree with CH12 in that it is very expensive to run an RJ hub with most of your traffic being connections. This is exactly what happened to JI, if they would have maintained their smaller point-to-point service, albeit almost exclusively in and out of RDU, they would have done fine. It is when they started to expand and became more dependant on connecting traffic that thier problems really started surfacing. I wish Indepence well, but I think they would be better serviced by doing more point -to-point (example RDU-SWF) rather then connect everything through IAD.

PS. LFs is not a very good measure of success, JI was running almost 80% LFs when they filed for Chapter 11 in 2000.

 

[coolflyingfool]

I would almost think LAS would be the first West Coast city. Everyone wants to go to LAS at some time or another. I read an article which said that LAS was the city with the highest amount of O & D traffic in the U.S. Just thinking out loud........

 

[Ch. 12]

I would almost think LAS would be the first West Coast city. Everyone wants to go to LAS at some time or another. I read an article which said that LAS was the city with the highest amount of O & D traffic in the U.S. Just thinking out loud........

[post="179592"][/post]​

LAS = high loads...

...but...

LAS = terrible yields.

Keeps going back to the simple fact that high loads do not equal high revenues (or any at all). That is why LAS does not work much of the time (look at National) and that is why a hub focusing on connections to fill the planes (high loads...low yields) is not necessarily a successful venture. Especially to the locations that indy flies. There isn't that much local traffic so most of their reliance is on connections.

Vote no on LAS

Vote no on connecting RJ hub

(sorry...election year catching up to me)

 

[balloonguy]

LAS = high loads...

...but...

LAS = terrible yields.

Keeps going back to the simple fact that high loads do not equal high revenues (or any at all). That is why LAS does not work much of the time (look at National) and that is why a hub focusing on connections to fill the planes (high loads...low yields) is not necessarily a successful venture. Especially to the locations that indy flies. There isn't that much local traffic so most of their reliance is on connections.

Vote no on LAS

Vote no on connecting RJ hub

(sorry...election year catching up to me)

[post="179604"][/post]​

They chose the two Florida cities first because they want to keep the small number of Arbii that they will have when they launch service (2 or 3) to be closer to home for maintenance, etc.

 

[iflyjetz]

Link: http://biz.yahoo.com/prnews/040915/dcw049_1.html



Pertinent statement:
"During the month of August 2004, Independence Air generated 126.9 million RPMs, with ASMs of 279.1 million. Load factor for the month was 45.5%, with 342,674 passengers carried."

Not good going into winter, especially with Indy's expansion and what will be fire sales from US Airways. Speaking of fire sales, look at this link: http://biz.yahoo.com/prnews/040913/nym106_1.html

OK, let's add everything up:
1 Low LF
2 Fire sale
3 Increasing Indy Air capacity


This one isn't going to be around very long.

 

[ITRADE]

45%. OUCH!

 

[Busdrvr]

45%. OUCH!

[post="180515"][/post]​

By implication, the LF on it's "contract flights" was 72%. Hmmm, you have a 45% LF and your comp has one over 70%..... Guess there will be a glut of RJ's on the market soon...

 

[Ch. 12]

Mesa sure is making out with the RJs from all of these failed carriers. Won't be surprised to see them waiting in line right now for the chance of indy's RJs.

I cannot believe that they (Indy) aren't taking a step back from the original plan of rapid expansion into small to non-existent markets to see what they should do next. All they are doing now is draining cash with an already failed business plan.