No more DUJ for US Airways Express

[whlinder]

I just thin Air Midwest wants OUT of the east Coast and the EAS business altogether.

Perhaps out of the east coast, but they are still bidding on EAS contracts. They won the contracts for Grand Island and McCook, Nebraska last year from Great Lakes. Fortunately they also codeshare with YX out of MCI, so you don't have to fly US to connect to the Air Midwest/US Express EAS flight.

 

[SegmentKing]

Air Midwest has stretched itself pretty thin over the past few years... it all made sense when Mesa had 150+ Beech 1900s flying all over the country, but now it doesn't make economical sense to have 2 Beech 1900s based out of PIT with a maintenance base in DUJ.... especially when the airline is growing the MCI operations.

Expect to see Air Midwest further consolidate back to what "Air Midwest" looked like prior to the aquisition by Mesa.

And regarding EAS, USAirways (East) had an unspoken "rule" that other USX carriers can't go after other USX carriers EAS business... which is why you have never seen Mesa go after Colgan business, and vice versa. (The WV EAS fiasco is a prime example except YV was told to put in a "token" bid, but if you look at the original rounds in 2005, YV was the only USX carrier to put in). Colgan, however, can bid the route as a UAX carrier.

 

[SegmentKing]

ANy thing that transpires to where US Airways has less of a relationship with Mesa is a customer Friendly and an imporvement to opperational soundness.

Piney,

I think you would find that Air Midwest is a totally different animal from the rest of the "mesa world". Many posters, including JaxPax, have found that the ZV-way of doing things reminds them of the USAir in the past -- when flying was fun.

While you don't like Mesa Airlines, don't throw judgement at Air Midwest ... props and jets are 2 different worlds!

 

[jetpiedmont79]

How many folks work at the MX base in DUJ?

Piney,

I think you would find that Air Midwest is a totally different animal from the rest of the "mesa world". Many posters, including JaxPax, have found that the ZV-way of doing things reminds them of the USAir in the past -- when flying was fun.

While you don't like Mesa Airlines, don't throw judgement at Air Midwest ... props and jets are 2 different worlds!

 

[JAXPax]

Piney,

I think you would find that Air Midwest is a totally different animal from the rest of the "mesa world". Many posters, including JaxPax, have found that the ZV-way of doing things reminds them of the USAir in the past -- when flying was fun.

While you don't like Mesa Airlines, don't throw judgement at Air Midwest ... props and jets are 2 different worlds!

I'll agree.... Air Midwest seems to be people enjoyed their jobs... primarily smaller stations that are very service-oriented. Never had a surly Air Midwest person (and believe me, if there were a Frequent Beecher Program, I'd be Platinum).

 

[JS]

I'll agree.... Air Midwest seems to be people enjoyed their jobs... primarily smaller stations that are very service-oriented. Never had a surly Air Midwest person (and believe me, if there were a Frequent Beecher Program, I'd be Platinum).

I agree! Air Midwest runs a very good operation. It's the polar opposite of RJ Mesa.

 

[EMBFA]

Air Midwest and Colgan operate as a pro-rate carrier, meaning they pay US about $11 per passenger to fly as USX. These carriers assume the risk of operating the flight. This is unlike carriers such as Air Wisky, Trans States, Mesa(MesaJET), Republic, and Chautauqua that get paid a flat fee per block hour, monthly mgt fee,and others for operating these flights, regardless of 1 passenger or 50 on board.

A Beech 1900D is about $1100 / hr (profit element included).

Hope this helps.

Actually, Trans States operates for USX on an "at-risk" basis like Colgan does on its non-EAS routes. RP/CHQ, Mesa, and Air Wis are capacity purchases like described above. Trans States relationship with US is unique for rejional jets.

It shines a light on the level of service provided by these RJ "providers" when you consider the last bit... they are paid a flat fee regardless. Guaranteed profit in a difficult industry. All they have to do is take off, and get paid.

 

[the turtle]

I used to pilot the DCA-Greenbriar run...great stuff watching the high-and-mighty get off the shuttle bus and board The Mighty Beech!!!

Took former Chief Justice Renquist often...he was a funny guy

 

[FM2436]

From the Boyd Group's Monday, May 7th, Hot Flash: Lengthy read, but interesting.

http://www.aviationplanning.com/asrc1.htm

Small Communities In For Some Unexpected Shocks
Air Service Development -
The New Rules of Engagement

Speaking of air service development, as of May 4, approximately 75 grant applications have been filed under this year’s Small Community Air Service Development Grant Program. After culling out the crackpot and just-in-from-Mars proposals, the DOT will still be left with a least 40 applications that really have strong potential for success in improving air service at the communities involved.

But, in the future, the hurdles to gaining more service will will be going up sharply and unexpectedly for most small communities. Quietly and unnoticed, there are emerging changes in the core economic dynamics of the airline industry that are going to savage air service levels at many small and rural communities.

Take it to the bank: with or without federal grants, with or without incentives, with or without schemes like "free" ground handling, "travel banks" or other trendy mechanisms, rural airports are about to face air service challenges that will make the last decade look like the Good Old Days.

In the past, an air service proposal that indicated strong net-new feed through a major carrier’s hub would generally get at least a one-one-one audience from the Planning Department, particularly if came with some SCASD loot or other financial goodies to offset the risk. But that's no longer a given. The reason is simple: The costs of providing rural air service are about to skyrocket beyond the ability of many communities to support it.

Four New Airline Industry Dynamics. Some very big and very fundamental shifts are quietly taking place in the structure of major carrier systems, and they’re all going to make recruiting air service at smaller communities a whole lot more difficult and more expensive. In some cases, it will be outright impossible.

Trend: End of The Small Turboprop Era. Today, there are a lot of communities that are receiving service from comprehensive network carrier systems, provided by contract operators of 30- to 34-seat turboprops. The traditional and current economics of these airliners are great for service at communities that have limited traffic demand. American, Delta, United and Northwest all have these aircraft in their system fleets. Some are operating on a cost-plus contract with the major, others are on an at-risk basis.

But there's this little thing called age - those aircraft are getting older and the number in operation will continue to decline over the next decade.

Here's the kicker: there are no viable new replacements for S340s and EMB-120s. Just as the air service bar rose in the 1980s and 1990s as C99s, Twin Otters, and C-402s went out of service, this is going to be the case with the decline in 30-34 seat turboprop fleets. Ominously, as noted next, 50-seat jets are not the solution, either.

That means that some communities are going to find themselves odd-man out.

Trend: RJ Operational Costs & Availability. Moving up the traffic-generation chain, some larger "small" airports that today are dependent on service from 50-seat RJs aren't completely safe, either. In the future, some of these airports will also find themselves unexpectedly facing a shortfall in their ability to support viable air service. That's because the cost equation for 50-seat jets is going up, and fleets are beginning to shrink.

Therefore, not only is the revenue hurdle for air service increasing, but the availability of 50-seat RJs will be declining. The next step up - 70-seat RJs - have even higher sector costs. Many smaller communities simply may find that their traffic generation cannot expand as fast as airline operational costs, when small turboprops and 50-seat RJs get parked and replaced by larger, albeit more ASM-efficient, airliners.

Result: reduction or complete loss of scheduled flights, even at some communities that today have fully-viable air service.

Trend: Feed Quality, Not Passenger Volume. Hub operations are at or near capacity, and, even in the face of high demand, major carriers are not adding much net-new mainline capacity. Therefore, the strategic value of feed provided by small jet providers is being carefully scrutinized. This is particularly true of feed from smaller communities.

With system load factors in the 80%+ range, major carriers are a lot more picky regarding the "quality" of the feed traffic they go after. If that potential connecting traffic generated by serving East Wonderland Municipal is simply going to displace passengers off of already-full airplanes, the deal makes no sense. If they're mostly discretionary passengers on their way to Disney World, they've got a lot less value than current or potential feed from another airport that has a larger business travel component. One major carrier now claims that new feed traffic can result in as much as an 80% spill rate at one of its major hubs.

Add this to the fact that at some hubsite airports, facilities are getting tight. Weak quality of feed traffic, and/or the wrong mix of local and flow passengers, can be lethal to an airport's chances of getting or keeping service when there's a shortage of parking positions at the hub.

Volume of passengers is not the name of the game. Quality of the revenue is what will count in the future.

Trend: SJPs & Pay-To-Play. Historically (which in the airline business means for maybe the last five years) the trend has been major carriers paying small jet providers within some variation of a cost-plus arrangement. The SJP just files the plane where the major tells it to, and gets a payment at the end of the month. No risk, no worries, no need for expensive infrastructure like sales, reservations, or revenue-accounting. Just a happy vendor. (That's over simplified, but it will do for the purposes of this discussion.)

Those days are coming to an end. Increasingly, instead of major carriers paying these SJPs on a cost-plus basis, the trend will be going in the opposite direction. There will be more at-risk flying, and with the emerging glut of 50-seat jets, we'll be finding some SJPs desperate to place excess airplanes. That means that majors will move gradually toward actually charging a “brand-use†fee to the SJP the operator for some, or even all, of the flying it does. That means, then, that those operators are going to be looking at sure-thing, slam-dunk markets for their excess jets. Small airports need not apply.

What all this means is that, a) the machinery that has traditionally had the operational costs to serve small communities will be getting more scarce in the future, B) the incremental new feed from smaller communities is becoming less and less valuable to major carrier systems, and c) the entities that would be operating such markets – the SJPs – are being pushed into taking more of the risk – or, in some cases, all of the risk – of such flying.

Add it all together, and a small community that sashays into a major carrier’s planning department, flashing a PowerPoint showing silly MIDT-generated maps, sloppy DOT O&D data, and whining about how much leakage it has, will get summarily tossed out of the building - assuming it can get an appointment in the first place. A whole lot more juice is going to be needed in the future to get and keep service at smaller airports.

How 'Bout New Independents Coming Along? There has been, and will continue to be, a lot of conjecture regarding the "opportunity" this all represents for new, third-tier airlines. The idea is that new independent operators will take those parked S340s -or even 50-seat RJs - and fill in the gaps left when the service formerly supported by comprehensive network carriers is terminated. Fuggetaboudit.

Remember that the main reason these aircraft got parked in the first place was economics. That won't substantially change if Air Fred decides to fill in the alleged service voids - even if they actually can find pilots that are willing to work for slave-ship wages at at a time when major carriers are desperate to hire them. Even if they can get a code-share with a major, the opportunities to make any kind of viable return on investment are between slim and none.

Take a look at the ExpressJet experiment. Saddled with around 49 excess ERJs, they're trying to fly under their own brand - in big-city markets only - as a third-tier carrier. The cost of the ERJs demands that ExpressJet try to find markets that can access what appear to be strong traffic flows. Their route map is entirely populated with destinations like Raleigh-Durham, Fresno, Kansas City, and Ontario - none of which are small, under-served communities. Communities like Merced, Ogdensburg, Aberdeen, Gainesville, and Pellston aren't in the cards for such third-tier experiments.

Air-Taxis: Non-Starters. Then we have the air-taxi solution, where supposedly some entity will get a fleet of Cirrus or Eclipse or Adam aircraft, and take advantage of all that pent-up demand in underserved small communities. It's the latest mantra. It's the solution to the future. It's also complete hogwash.

The first of these was Point2Point, a Cirrus operator that was supposed to be the next-generation airline system, providing service throughout the Dakota region. Last week, after a year or so of supposedly bringing new air service vitality to small communities, Point2Point checked into airline heaven.

It was an idea based on emotion, weak assumptions and bad research - from the start.

After blasting through a $1.5 million SCASD grant, plus a couple hundred thousand dollars in local money, Point2Point was found sleeping with the fishes last week. Like we predicted it would. (And, by the way, where were all those other aviation consulting firms on this issue?)

Tumble to it: air taxi operations are very expensive, and they don't meet the needs of the general flying public. Adam and Eclipse will be facing robust demand for their aircraft. But when the dust settles, on-demand air-taxi operations won't be anywhere near the market factor the trendies are predicting.

Historic Traffic Data Is Just That - History. So, what's the future for rural and small air service? First, the traffic bar to support service is going to go up - suddenly and unexpectedly for some communities. Service will increasingly be operated by aircraft larger than 50-seats, which means communities must be able to generate significantly higher system revenues, including international flows.

Second, only the connectivity provided by a comprehensive network carrier system (which some people still mis-labeled as "legacy" airlines) will be viable for such communities. As noted above, independent, no-brand service is not a solution. If the airport cannot support the higher costs of CNC service, the community is going to need to find regional access alternatives.

Third, inbound-generated traffic is often the only segment that can materially grow at a small community - more consumers flying into the airport for business. That means consumers domestically and internationally must be able to identify the service, and that means having brand identity. Air Fred won't have it. Neither will air-taxis.

But then that means that there needs to be some economic generator that induces more people from more places to fly into the small community. So, the data that comprehensive network carrier systems will need to see before they will even consider adding service at a small community are hard points of evidence demonstrating that the feed quality going forward is such as to strengthen its network.

Therefore, the the small communities that have the inside track to recruiting new service as well as keeping what's already in place, with or without incentive money, are those that have some major economic growth story to tell. Like the new Kia foundry. The Intel plant. The investment by Haier in a white goods factory.

The challenge is in identifying future traffic flows, and the "quality" of the air traffic demand those economic investments will generate.

Historical data is less and less valuable. Jive-time MIDT analyses (which are semi-accurate at best), raw DOT O&D numbers (which are inaccurate), or “ticket lift†studies (say what?) are mostly for amateur entertainment. These outdated schemes tell nothing about the future. Or about much else, for that matter.

What the carrier needs to see are the new traffic flows that will be generated by the establishment of a major new industry in town (like Toyota at Tupelo, or Israel Aero at GTR) and that will result in significant new high-yield passengers. Then the challenge is to quantify what that means in terms of net-new system revenue. That's what will get the airline's attention, not lovely maps showing the zip codes where a non-representative portion of last year's passengers supposedly booked their seats.

Admittedly, it is a complex matter to not only project new future emerging traffic flows, but also to determine when they will manifest as enplanements as a new industry expands in the region. But it has to be done - at least, it has to be done if the community wants to keep the air service it has and build more in the future. Remember again, the fleets that are available at CNCs to serve smaller communities are not getting bigger. The competition will be intense to keep what's left.