United/aca Transition Agreement

[Cosmo]

ACA just announced that it and United have reached an agreement for ACA to transition out of the United Express program in three phases this summer between June 4 and August 5. The agreement is subject to approval by United's bankruptcy judge, and the next hearing is scheduled to be held on April 16. You can read ACA's press release here.

Presumably this means that United has now lined up all of the new service that will be needed at IAD and ORD to replace ACA's current flights, and I assume that we'll shortly see a United press release describing how it will be done. Time will tell.

 

[Cosmo]

Well, that didn't take too long -- here's the United press release.

There were three comments that I found to be very interesting in this press release. The first dealt with the wide range of carriers that will be serving IAD and ORD ...

Chautauqua Airlines, Republic Airlines and Shuttle America, which are newly-announced partners in United Express, will operate United Express service out of Dulles and O'Hare. Existing partners Air Wisconsin, Trans States and Mesa will also serve O'Hare and Dulles, with SkyWest serving O'Hare as well.

... the second reiterated United's commitment to IAD ...

"United is committed to its full schedule of flights at Dulles -- a key hub for the company -- and to offering customers competitive fares and superior service. United will provide high-quality service to all of the markets currently served by United Express using ACA now and in the future," said Doug Hacker, executive vice president-Strategy.

... and the third was a not-too-subtle jab at ACA.

"The new and existing partners who will serve Dulles and O'Hare bring to United Express experience and excellent reputations for service and performance," said Pete McDonald, executive vice president-Operations. "We now have the opportunity to improve the flight experience with United Express for our passengers."

It will be interesting to watch how this upcoming competitive battle shapes up at IAD.

 

[ITRADE]

"Its time to say sayonara..."

 

[Rob]

"Its time to say sayonara..."

To whom? The ACAI's folks have a good biz reputation in Washington for being smart and successful. They have no doubts about how big a fight they're in for.

I don't know how it will come out, but don't dismiss this little outfit until you've seen what they can do. Among people I talk to (for sure not a scientific sample), UAL is considered ok but not "loved" in Washington enough to hold their customers if a better deal is available.

Since I live in a Maryland burb, I usually use DCA or BWI; with nothing at stake personally, this little brawl should be interesting to watch.

 

[USFlyer]

Make no mistake, UA, US and others will compete vigorously to retain its customers and market share in the DC area. Also don't forget the high number of corporate agreements that both UA and US have in the area. I'm curious whether ACA has any plans to partner with another carrier (e.g., jetBlue) from a FF standpoint.

 

[whlinder]

Make no mistake, UA, US and others will compete vigorously to retain its customers and market share in the DC area. Also don't forget the high number of corporate agreements that both UA and US have in the area. I'm curious whether ACA has any plans to partner with another carrier (e.g., jetBlue) from a FF standpoint.

The same way US fought vigorously with MetroJet? Boy they sure showed WN at BWI that they will defend their turf!

ACA is no WN, but they won't be a cake walk. At first I was skeptical of their plan, but I think they have a chance.

Reading their whole plan, I remember them mentioning no partnerships with other airlines in order to keep costs low.

 

[whlinder]

What's the over-under on how long it will take for this news to prove that "US and UA are destined to complete a UCT/ICT with US taking over everything"?

 

[Cosmo]

At least the subject is being discussed here on the United board, so a certain pilot can't complain about "trespassers" on the US Airways board. B)

 

[jbguppy]

Rob,
ACAI's reputation has been built on nothing. They have never run an operation that has been worthy of any comment other than being a poor express partner in terms of reliability and customer service. Your confidence that they should not be dismissed is interesting considering that they are about to have an overmwhelming majority of their revenue stream cut off. They are about to engage in opening up a business in the most competitive marketplace in the US. They will do so while having most of their lifeblood (cash) shut off over a 60 day period.

Their unwillingness to negotiate away their price gouging on a bankrupt company will likely spell their corporate demise. It has been reported they were offered the same deal that skywest, Air Wisconsin, and Mesa currently operate under. This certainly falls under the category of be careful what you ask for, you just might get it.

Considering they are about to be competitively assailed on all fronts by many different airlines, I agree on one thing - it will be interesting to watch.

JB Guppy

 

[UnitedChicago]

I love how some ACA folks claim that ACA was the victum of United trying to stiff them in a new contrat. As noted - all other regional carriers accepted the new contract so it can't be that terrible.

It's been reported many times that ACA was studying morphing into a low-cost carrier before 9/11 and before United's ch11.

Of course people will point to the Mesa hostile takeover attempt and United' involvement. That was a last ditch attempt to retain ACA only after it was published that ACA had a formal plan to become indpendent.

My point is that it's not accurate to portray United as the villian here. It's the other way around. Don't forget - ACA wouldn't exist without United.

I just wonder what person would pass up United's comparable fares and FF program in favor for Independant Air. Time will tell...

 

[Rob]

Considering they are about to be competitively assailed on all fronts by many different airlines, I agree on one thing - it will be interesting to watch.

I agree - and that fight probably won't go that many rounds before the winner will be obvious. With other airlines semi-desperate for feed support, ACA probably has a fallback if they lose.

 

[Flying Titan]

I just wonder what person would pass up United's comparable fares and FF program in favor for Independant Air. Time will tell...

Hmmm... let's see....

All jet service - on new or re-furbished aircraft; seatback IFE, leather seats, lower fares with a simplified fare structure, and high-frequency scheduling

- vs. -

competition from a mix of "express" carriers - some offering RJs some offering exciting aircraft such as the Saab 340, no IFE, and more fares and restrictions than your travel agent can count.

Nah, it'll never work. Who would ever fly an airline like that?

Seriously, I don't know if this will work even if they do attract passengers. I have a major problem with the idea of a low-fare carrier making a successful run with 50-seat aircraft because there just doesn't seem to be enough volume to make these flights profitable (even when the planes are full). Still, ACA has enough money to be around long enough to pose a major problem for the weakened legacy carriers that dominate IAD and the east coast (UA, US, and DL). These carriers can only take so many hits before one of them falls and, make no mistake, this is definitely another punch.

 

[ITRADE]

Hmmm... let's see....

All jet service - on new or re-furbished aircraft; seatback IFE, leather seats, lower fares with a simplified fare structure, and high-frequency scheduling

- vs. -

competition from a mix of "express" carriers - some offering RJs some offering exciting aircraft such as the Saab 340, no IFE, and more fares and restrictions than your travel agent can count.

Three words - frequent flier miles.

 

[UnitedChicago]

exactly. united will match or come close to any IA fare. hmmmm - i'll choose more FF miles than on board entertainment. Only UEX doesn't provide IFE.

 

[Flying Titan]

Hmmm... let's see....

All jet service - on new or re-furbished aircraft; seatback IFE, leather seats, lower fares with a simplified fare structure, and high-frequency scheduling

- vs. -

competition from a mix of "express" carriers - some offering RJs some offering exciting aircraft such as the Saab 340, no IFE, and more fares and restrictions than your travel agent can count.

Three words - frequent flier miles.

No doubt that FF programs are among the most powerful customer loyalty tools ever invented, but they don't have the same pull that they did just a few years ago.

JetBlue doesn't seem to have any trouble drawing passengers away from the legacy carriers with exactly the mix of amenities I mentioned before. Of course, a lot still depends on good service and effective marketing - but it will take more than a strong FF program to beat back this effort if it's done correctly.