Only One Airline Is Likely To Survive

[USA320Pilot]

Only One Airline Is Likely to Survive Regional Shakeout

Stocks of the two have become all-or-nothing bets, potentially valuable if the plans work, probably worthless if they fail

WASHINGTON (Post) - Washington's hometown airlines, US Airways and Atlantic Coast Airlines, are revving their engines for the Battle of Washington, a discount-fare dogfight only one of them may survive.

See Story

United Tries To Spoil Debut Of Ex-Partner

Independence Air's chairman and chief executive, said he expected competition from United, but nothing like this

WASHINGTON (Post) - Dulles-based Independence Air's first flight isn't scheduled for another two weeks, but that's not stopping United Airlines from trying to make the launch as difficult as possible.

See Story

Respectfully,

USA320Pilot

 

[USA320Pilot]

Washington Shakeout?

ARLINGTON (theHub.com) - Washington Post columnist Jerry Knight is predicting an airline shakeout in the Washington region with US Airways, United, Delta, and Independence Air vying for business in what Knight calls “a discount-fare dogfight.â€￾ In two weeks, new low-fare airline Independence Air (formerly Atlantic Coast Airlines) will begin flights out of Washington Dulles International Airport, and plans to serve 35 cities and operate 300 daily flights from Dulles by the end of the summer. Some of the cities that it will serve are ones previously served by Atlantic Coast as United Express flights and others are new markets where Independence Air will compete with legacy carriers such as US Airways, United and Delta.

Knight also reports that Atlantic Coast executives are counting on the success of the carrier’s radical transformation from a contract carrier flying feeder flights for bigger airlines into a low-cost, brand-name airline, as Washington's version of Southwest or JetBlue. As US Airways works to transform its cost structure to compete in today’s industry, the stakes will be high if Independence attracts the Dulles passengers it hopes for, since there is a 90 percent overlap between Independence Air's flights from Dulles and cities served by US Airways from the three Washington area airports. According to the columnist, it would be hard to envision a scenario in which all airlines would succeed.

Respectfully,

USA320Pilot

 

[Fly]

On the other hand, BB&T Capital Markets recently cautioned that Atlantic Coast's transformation into Independence Air has "a higher probability of failure than success."

 

[USA320Pilot]

Fly:

Fly commented: On the other hand, BB&T Capital Markets recently cautioned that Atlantic Coast's transformation into Independence Air has "a higher probability of failure than success."

USA320Pilot: Independence Air is going to offer deep discounts, which will pressure both of our companies during a time when we can least afford it, but their plan has never been tried or accomplished and I believe will ultimately fail. Independence Air will have no frequent flyer program, no clubs (except Dulles), no interline baggage check-in, no alliances, and predominantly 50-seat RJs.

Thus, with United, Delta, and US Airways matching their fares, the company is going to have a hard time attracting customers.

Why ride a 50-seat RJ when you can ride a mainline jet with amenities?

Regards,

USA320Pilot

 

[oldiebutgoody]

...Why ride a 50-seat RJ when you can ride a mainline jet with amenities?

Regards,

USA320Pilot

EXACTLY what LUV and JBLU are saying about UAIR! Now you see why UAIR is probably through, no matter what the employees do! Even you-know-who agrees!

 

[whlinder]

You're days late with the first article, and the second article doesn't even mention US Air.

Why Fly I instead of UA, DL or US? If IAD is your most convenient airport, if they need to get you where you need to go at a reasonable price with a good schedule, if you're tired of putting up with the attitude of UA's IAD CSRs... there are plenty of reasons.
And no interline bag transfer/no alliances are not going to be the reasons FlyI fails if it does; WN has continually proven that these are not requirements to run a profitable airline. FlyI will have a frequent flyer program, did you even read the second article you posted? 50 seat jets vs. big planes might drive off some travelers, but how many routes will they be going head to head with big jets? And how many travelers actually know what kind of plane they're on?

I am skeptical about their ability to successfully transform themselves into what they envision as well, but at least give some rational reasons as to why you think that.

 

[the turtle]

Sure, Midway. Give it a couple of years (tops) and mesa will pick up the scraps.

 

[usair_begins_with_u]

Plain and simple.. USAir is being packaged for sale... the sum of the parts is in fact, greater than whole. Big Daddy Bronner knows this, he's not stupid. He's shrewd.. he'll blame the whole failure on labor, and come out smelling like a rose.

:unsure:

 

[Bear96]

... if you're tired of putting up with the attitude of UA's IAD CSRs...

HA! Spend an afternoon at ACA's concourse with THEIR (soon to be Independence's) CSRs and the UA CSRs will seem like angels.

 

[sfb]

Independence Air is going to offer deep discounts, which will pressure both of our companies during a time when we can least afford it, but their plan has never been tried or accomplished and I believe will ultimately fail. Independence Air will have no frequent flyer program, no clubs (except Dulles), no interline baggage check-in, no alliances, and predominantly 50-seat RJs.

Thus, with United, Delta, and US Airways matching their fares, the company is going to have a hard time attracting customers.

Why ride a 50-seat RJ when you can ride a mainline jet with amenities?

Regards,

USA320Pilot

"Independence Air is going to offer deep discounts, which will pressure both of our companies during a time when we can least afford it"

Actually, those discounts are Independence Air's business model. Call it rationalizing fares. Their walkup fares (which yield 40-50 cents/mile, incidentally) are, in many cases, a deep discount from US Airways' average fare on many routes. US management needs to learn how to make money with a rationalized fare structure.

"Independence Air will have no frequent flyer program"

See iClub, Independence Air's frequent flyer program -- which lacks capacity controls and is structured to encourage people to pay higher fares.

"no clubs"

US Airways offers clubs in nine cities of the 35 being added initially by Independence -- or 26%. And clearly the clubs kept people from flying Southwest at BWI, right?

"no interline baggage check-in, no alliances"

This has kept jetBlue and Southwest from succeeding, right?

"and predominantly 50-seat RJs"

This differs from US Airways in that they don't offer passenger-preferred turboprops, right?

"Thus, with United, Delta, and US Airways matching their fares, the company is going to have a hard time attracting customers."

This is the only place I agree with you (well, I also agree with the "no one has ever tried to be a LCC with RJ's" part) -- but it seems to me that the basic plan is to stimulate enough traffic to fill everyone's planes. Plus, DCA slots are limited and no one else aside from UA really has the terminal space at IAD to put up a real competitive response -- it'll be interesting to see how UA tries to compete there.

"Why ride a 50-seat RJ when you can ride a mainline jet with amenities?"

Of the 35 destinations announced for Independence Air, US offers mainline (or Shuttle) service to BOS, BDL, PIT, and PVD (plus UA codeshare to ORD) -- and they will beat US in frequency in every single market save BOS and ORD. The Florida markets (served mostly with mainline aircraft by US) will also get A319's from Independence. And, moreover, they'll offer jets on every route -- no turboprops like you'll still get on some US Airways routes from DCA.

 

[WorldTraveler]

I think the only conclusion one could reach is that Independence will most hurt US and UA, the two airlines with the biggest share of the Washington, DC market and the two airlines that are most financially vulnerable. No, it is not likely that all of the present airlines with large DC presences will survive, possibly including Independence but US and UA will probably long be gone by the time Indy fails.

 

[Fly]

Just because you keep re-typing it World, doesn't mean it will happen. BTW, United is a business, where does all the hatred come from?

 

[USA320Pilot]

If US Airways successfully restructures into a LCC/Hybrid, either in or out of bankruptcy, with a CASM of about 7.5 cents (with fuel about 90 cents per gallon), I doubt Independence Air will survive.

However, US Airways management has let it be known, both privately and publicly, the company will be involved in M&A activity in the future. Since no legacy carrier has access to the capital markets, I believe a venture capitalist will emerge, maybe TPG or RSA, to provide the equity investment necessary for a transaction to proceed.

Respectfully,

USA320Pilot

 

[usair_begins_with_u]

If US Airways successfully restructures into a LCC/Hybrid, either in or out of bankruptcy, with a CASM of about 7.5 cents (with fuel about 90 cents per gallon), I doubt Independence Air will survive.

Those are some mighty big ifs you are tossing out there 320... Let me try, this could be fun!!

If there were a magic money tree in the back yard of Dr. Bronners mansion..

 

[usair_ ends_ with_ me]

Plain and simple.. USAir is being packaged for sale... the sum of the parts is in fact, greater than whole. Big Daddy Bronner knows this, he's not stupid. He's shrewd.. he'll blame the whole failure on labor, and come out smelling like a rose.

:unsure:

time to teach daddy bronner a big fat lesson then.
how much more are we going to take from these 'robber barrons'???
i say lets burn down this popsicle stand right now!