Whiskey DeltaCapacity purchase agreement (CPA). Does this mean that the regional airline would recieve its revenue on the basis of the capacity it provides to the airline it is feeding, and not on the basis of number of passengers flown? So a similar agreement to a wet-lease charter?
We operate under a CPA with CO. CO pays a flat hourly rate for our airplanes. In other words, they bought all our seats at a fixed rate for the 5 year span of the CPA. Our profits are capped at 10% so anything above the hourly rate + 10% profit margin CO pockets the extra. We get paid no matter how many folks are flying in the back so we do everything we can not to cancel a flight. It’s a rather moot point though as we seem to always be in an oversold situation at the gate.
Obviously it’s great for the regional partner as you have a guaranteed income for the life of the CPA. As long as the passenger loads are reasonable it’s good business for the parent carrier. There are obviously downsides for both sides. The parent company is locked into a fix expense that can hurt during tough economic times as you can’t shop around for a lower cost operator/feeder. The regional partner operates how/where/when the parent company wants them to. It plays havoc on crew scheduling/hiring/staffing.
CO deciding to withdraw 69 airplanes from our CPA could be just a political move in order to get a rate adjustment or could not be. Obviously rumors are a plenty right now.
Whiskey DeltaWe (ExpressJet) just had 69 airplanes pulled from our Capacity Purchase Agreement by CO. We have first rights to those 69 airplanes, the only stipulation is that we can not fly them for CO or in/out of their 3 US hubs if we decide to keep them. One possible rumor is that we’d operate those as a part of this new European operation. We must figure out what we are going to do with those 69 airplanes, or if we want them at all, in the next 6-9 months. As you can see from the article that matches up with the time frame they quoted for the European operations.
2006 is already looking to be an interesting year.
Whiskey DeltaWhile their timing was terrible when they launched the airline, they, management, did not do a good job.
The timing was awful but not because of anything the management team did. No one saw the spike in fuel prices coming which almost crippled every airline out there, not to mention a new start up.
Unlike Jetblue, Independence didn’t have the luxury of waiting until their fleet size was appropriate and their PR push was over. UA forced their hand permitting only a few months of planning.
UA was financially supporting another regional airline (Mesa) in the hopes that they could buy out ACA, giving UA control over the gates and terminals at IAD. ACA owned both and wasn’t willing to give them to UA which is what United was offering in their contract renewal. Either they gave those up and took pay cuts or UA would go elsewhere for regional service in IAD. So either they slit their own throats to protect a losing business contract or they had to go on their own using the infrastructure they own. They decided to leave UA.
The name was not recognized by most Americans. I asked several guys I am friendly with if they ever flew them. They had no clue who the carrier was.
Do most folks on the East coast know who Horizon, Alaskan or Frontier are? The Independence Airline route structure was very East Coast centralized which would mean most folks in the central/western US would have little reason to know about them. I know we had several large billboards for them at the airports in Ohio and they ran TV ads in the larger markets on the East Coast. They ran nationwide advertisements for their few coast-to-coast routes as well. Folks in DC were well aware who they were.
Also, the RJ fleet was wrong. The needed more A319’s.
Obviously they knew that a sizable portion of their operations would need to be the A319’s but it wasn’t like they would show up with 25 new airplanes the day they launched Independence. Several analysts blamed their lack of A319’s as the reason they failed. Strangely none of them seemed to have any idea how an airline goes about buying more jets. They don’t grow on trees. They seem to forget that Jetblue had years to prepare their launch as they organized while ACA only had a few months.
As a hub, Dulles is a good location. There is a local base to draw passengers from, and the airport is located in a reasonable part of the US where connection traffic will work.
IAD is a great airport for a LCC given that a majority of the Legacy airline operations out of there are International or long-haul domestic.
A lot of people got hurt because of this. Also, a lot of money was lost. Its a shame!
I think Delta, US Airways or United have each lost more money in 2005 that Independance lost of it’s entire life. There are more folks on the street from each of the Legacy carriers than Independence ever employeed at their peak.
It’s odd how there is so much finger pointing at the Indy failure while the Legacy carriers are losing more money and firing more and more employees than Indy ever could. The only reason that Indy folded wasn’t because their business plan was any worse than the Legacy’s, it’s that given their size they couldn’t afford the financial charges to go into Chapter 11 protection. Without that protection how many airlines (much larger and with better fleets) would have folded in the last 3 years?
Whiskey DeltaIndependence Air’s management should get the award for complete incompetence! The concept was stupid. They had the wrong aircraft. They were making a reasonable profit flying for UA and gave it all up. A lot of people lost a lot of money. In addition, what idiot sends out furlough notices to all its employees a week before they plan to shut down. Hello! That is waving a red flag to its customers! But don’t you worry! Management will be taken care of! I am sure there is a slush fund somewhere out there!
PATHETIC!
Bkonner
One of my best friends was a Captain there when they made the decision to go it alone. I can tell you that Indy was the best option they had at the time as UA was giving them an unworkable ultimatum. It was never a simple matter of attempting to break away from UA to just start a new airline. Trust me, UA was treating them like crap when ACA broke away.
Sure their fleet was wrong at the start but they were making the appropriate shift. They ditched their J41’s and DoJet’s and quickly made their A319 order. Things don’t change overnight.
I also believe that the furlough notices were sent out to aide the employees in gaining unemployment benefits earlier. Without the notices the employees would have to wait to apply until they were actually out of a job.
Whiskey DeltaWow, these pictures have brought back a lot of memories. Thanks for taking the time Skymonster to scan and post your pictures.
Whiskey DeltaHence we can clearly conclude who is responsible.
It’s always easier to blame the dead guy in order keep the living (persons/company) clear of the inevitable lawsuits. Plus, we’ve yet to see a dead pilot be able to speak on his own behalf. Instead, we have hundreds, if not thousands, of “experts” judging the actions of a few in perfect hindsight. Nothing like a board of suits spending years to judge an action that someone had only seconds to comprehend let alone react to.
Whiskey DeltaLarge aircraft are still sensitive to wakes. I remember seeing a few pictures of 707’s and DC-8’s who had engines removed by the wakes of similar aircraft they were following. Sure, the dangers for a 747 are different than a C152 but there are still risks.
Isn’t only the 753 considered a Heavy aircraft? I believe I have also heard the Heavy callsign for 739’s as well but I could be mistaken. I know there was an attempt to get the 737NG’s recategorized as the wakes off their new wings packed quite a punch when compared to the previous 737’s. I know the few times I’ve gotten rocked rather hard by a previous airplanes wake it was reported as a 738 or 739.
Whiskey DeltaIt might be argued that the US airlines are flying more people than they can afford to…
Flying more people than they can afford to? That’s about the most illogical statement I can think of regarding airlines. One would think that an airline “flying not enough people” would be an issue but not too many people.
The issue is there is too many seats flying around even if there are enough folks to fill all those seats. The purchasing power is in the hands of the consumer and not in control of the airlines. As soon as supply (of available seats) drops enough the airlines will have the power to raise ticket prices.
Would a fleet reduction by AA do anything to remedy this situation? Not for the AA woes. If AA reduced it’s fleet significantly there could be a enough of a drop in Available seats to put the cost control back into the hands of the airlines. If that did happen where would more of that advantage go? AA’s competitors would come out ahead since AA reduced it’s own fleet while others retained theirs and now they would reap the benefits of less flying seats.
The problem is that the entry cost for new airlines is WAY TOO LOW. Find some financial backing, a few airplanes and you have an airline. Meanwhile the operating cost of that new airline (as well as the addition of available seats) only hurts the rest of the industry. A Legacy carrier can’t compete with the low labor costs of a new airline (everyone’s on new employee pay) and the addition of more seats into the market drives down the value of the Legacy carrier’s own seats.
New carriers are very sensitive to swings in the economy and fuel costs. So these new guys come in and do their damage to the airline marketplace then end up folding in a few years anyway because they never got enough market share to weather rising fuel costs or a downturn in the economy. After they’re gone the remaining carriers easily suck up the business but are now suffering financially as a result of their competing against the new guy.
Notices were given 2 days ago to the Independance Airlines employees that they’ll be out of business in a month or so. A few months ago Transmeridian Airlines folded. Earlier in the year Southeastern airlines disappeared overnight not to mention the disappearance of Pan Am III again. ATA will be barely a memory shortly which also resulted in Chicago Express shutting down.
Meanwhile we’ve seen the arrival JetBlue and talks of Virgin starting an airline in the US. The government needs to stop permitting any guy with a few million in the financial backing and a couple airliners from starting a new company.
Why do aircraft owners want to deregister retired planes?
If it’s not airworthy then why would it be registered?
Also, are preserved heritage planes registered under the original numbers?
I know warbirds and the like have “new” registration numbers. I’m sure if a heritage airplanes registration complied with current standards (N-xxxx for the US) then it would be retained, if not, then a new one would be issued.
Whiskey Deltawow 5 of the top 10 and 7 of the top 20 are US…maybe thats why they’r all broke..
What logic can possibly be behind this statement?
475 according to this site ?
http://registry.faa.gov/aircraftinquiry/nameSQL.asp?nametxt=american+airlines&sort_option=5&page=1
It doesn’t seem that this list is very accurate given the aircraft listed on there. Just on the first page alone they show their Fokkers which have been gone for a while. My personal favorites on that list are the Vultee V-1A, Lockheed Orion 9D, Stinson A, Douglas DC2 and Curtiss-Wright T-32-C Condor II. 🙂 Unless I’ve just missed these in DFW I believe quite a number of the aircraft on the list are long retired. Not that I wouldn’t mind seeing a few DC2’s around. 😀
Whiskey DeltaI hope everyone has a safe travel season. Merry Christmas and have a wonderful 2006.
Whiskey DeltaLooks real sharp.
Whiskey Delta737’s have them too.
Whiskey Deltagot a 145.
I would like to request the CO Express livery please. 🙂
Whiskey DeltaAny ERJ’s? 🙂
Whiskey DeltaGlad to hear it. Of all the airlines over in the US, CO seems to be the only Major thats really got it together.
Of the Legacy Carriers, CO is the only one doing well by a long shot. They might actually post a loss for the year due to the losses that were a result of the 2 hurricanes. Up to that point they were turning a profit.
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