ACA Better get a deal done

Astin

New Member
Hey Davetheflyer, what's the hold up w/ ACA getting a new deal signed w/ United? Everybody is giving concessions right now....I'm just curious to know what the hold up is.

PRESS RELEASE: United Air, Air Wisconsin Reach Agreement

Dow Jones International News Service via Dow Jones

United Reaches Agreement With Air Wisconsin on Amended United Express
Contract


CHICAGO, July 2 /PRNewswire-FirstCall/ -- United Airlines (OTC
Bulletin Board:
UALAQ) today announced that it has reached a Memorandum of
Understanding (MOU)
with Air Wisconsin Airlines to operate select portions of the
Company's United
Express Service. In addition to its existing fleet, the amended
agreement also
provides Air Wisconsin the opportunity to place an additional 20
regional jets
in the United Express program in Washington, Chicago and Denver. The
agreement
is for an 11-year term.

"Given our long-standing relationship with Air Wisconsin, I'm pleased
we have
reached a Memorandum of Understanding that furthers this
partnership," said Greg
Kaldahl, director-United Express at United Airlines. "Our amended
agreement
will allow Air Wisconsin to continue operating under the United
Express brand
while offering a first-rate level of service to United's customers."

The MOU is conditioned upon negotiation of final agreements as well as
approval by the U.S. Bankruptcy Court. Air Wisconsin must also
finalize
agreements on labor cost savings with its flight attendants,
mechanics and
customer service personnel in order for the agreement to become
effective.
 

Cheechako

Well-Known Member
Along those same lines- sounds like Frontier-Mesa deal is ending. . . any chance ACA will pick it up? I can only think of ACA or Chataqua picking that one up. Being they're the only ones that can do it without a confilct of interests with United.
 

Derg

New Arizona, Il Duce/Warlord
Staff member
You say "Chautauqua" and I say "Sha-ka-ka"...

You say "Mesa" and I say, "Mesaba"

Chautauqua, Sha-ka-ka, Mesa, Mesaba, let's call the whole thing off!
 

SkyKingRon

New Member
'Yo Doug, yea, totally funny!!


But can you say that and still maintain a heading?!


You say Delta, and I say Smelta, and you say Cessna and I say...
 

Mr_Creepy

Well-Known Member
[ QUOTE ]
Along those same lines- sounds like Frontier-Mesa deal is ending. . . any chance ACA will pick it up? I can only think of ACA or Chataqua picking that one up. Being they're the only ones that can do it without a confilct of interests with United.

[/ QUOTE ]

Really? You better tell Mesa that. They just signed a 2 year extension with Frontier. 5 more jets.

I got it on AOL news and unfortunately the link wont post here. Tried searching Google for the stroy and it isn't up yet I guess.
 

Cheechako

Well-Known Member
My above post was based on this article. . . just goes to show you how fast things are changing in this industry!

Frontier officials: Mesa may stop regional flights
By David Kesmodel, Rocky Mountain News
July 2, 2003

Mesa Airlines probably will stop flying regional jets for Denver-based Frontier Airlines in January, Frontier officials said today.

An expanded partnership between Frontier rival United Airlines and Mesa - announced Tuesday - puts restrictions on Mesa's ability to have partnerships with other carriers in United's hub cities, Mesa Chief Executive Jonathan Ornstein said in an interview. He declined to provide details.

Denver-based Frontier has been in talks with Mesa about renewing their 17-month-old Frontier JetExpress partnership - and ratcheting it up - before the current contract expires Aug. 31. They will extend the current arrangement until Jan. 1, 2004, Sean Menke, Frontier's vice president of marketing and planning, said in an interview.

"We probably won't go any further," he said.

Frontier has been talking to other potential regional-jet partners and will continue to be able to do so through Jan. 1, he said.

Restrictions like those place by United "are very common, particularly with United," said Tony Christello, an analyst with BB&T Capital Markets. "They are not going to want to have another major competitor's codeshare partner having the opportunity to take revenue away from them in the same marketplace."

United spokesman Jeff McAndrews declined to comment on the matter.

Under a new 10-year deal, Phoenix-based Mesa will start flying 35 regional jets under the flag of United Express in August, in addition to the 10 turboprop planes it will begin flying for United from Denver International Airport on Sunday.

"I'm sure we will work things out (with Frontier) so it is amicable, whatever the result is," Ornstein said. "We really do like those guys, but it's hard to turn down a deal for 60 aircraft. Business becomes business."

For Frontier, Mesa today flies to eight cities from Frontier's DIA hub with five aircraft. Talks on an expansion of that deal had included the possibility of adding five to 10 jets.

Mesa lost $1.5 million on Frontier JetExpress in the January-March quarter, even after the companies revised the deal.
Frontier on March 1 began paying Mesa set fees for flying Frontier JetExpress routes and keeping all the revenue. Previously, the companies incurred their own costs and divided the revenue on a prorated basis.

Mesa is "now break even or a little bit better" on the alliance, Ornstein said.

Serving fliers with regional jets has become more popular in recent years as carriers look for ways to fly shorter routes that lack enough demand to fill larger, costlier planes.
 

Kingairer

'Tiger Team' Member
[ QUOTE ]
Really? You better tell Mesa that. They just signed a 2 year extension with Frontier. 5 more jets.


[/ QUOTE ]


It isnt up on Mesa or Frontier's web site either. They did get an extension to Jan 04. Care to cut and paste?
 

Mr_Creepy

Well-Known Member
I keep forgetting what year it is


I saw Jan 1, 2004 on the news release and thought it was another year and a half.

Forgive me! I'm old.

I promise you this, though, from previous history - Mesa will not give up Frontier if it's making money unless United is going to pay more. JO has already told United to take a hike on turboprop flying once before, because it was more profitable to leave the planes where they were.
 

davetheflyer

New Member
I havnt been able to get the webcast on the Mesa site to work due to some problems with my computer, but I have heard that Mesa is planning on using Frontier and America West on the United flying. There has been some crew room talk that ACA might make a play for the Frontier flying.

Here's a press release from 7-2:

Atlantic Coast Airlines Update On Negotiations With United Airlines, Inc.


Dulles, VA, (July 2, 2003) - Atlantic Coast Airlines, the Dulles, VA-based United Express regional carrier (ACA) (NASDAQ/NM: ACAI) today announced the following with regard to its United Express program.



The Company has been engaged in discussions periodically with United Airlines, Inc. related to the terms of a new agreement to replace the existing United Express Agreements between the parties. Although the Company and United have recently exchanged proposals, the parties were unable to reach an agreement on terms the Company believes acceptable during their last discussions on June 30. The Company continues to develop contingency plans to allow it to establish an alternative to the United business in the event that satisfactory arrangements for future United Express service cannot be agreed with United. The Company would pursue such an alternative if it is considered by management to offer more favorable prospects than offered by United. The Company cannot predict the timing or outcome of any decision by United with respect to the Company's code share arrangements.
 

Mr_Creepy

Well-Known Member
I emailed JO and asked him what was going on. He says it is way too early to make any blanket statements. The "scope" deal with United may be extended to exclude Frontier for example.

He was carefully guarding his speech, not making any promises

JT
 

pljenkins

Resident Knucklehead
Mesa is going to run into the problem trying to find financing for enough jets to cover the Frontier and United flying... Plus the expansion from the Jets for Jobs deal they have with USAir. That's a bucketload of airplanes they're going the have to come up with in a real hurry, and JO has indicated some difficulty securing funding for airplanes.

Paul
 

Mr_Creepy

Well-Known Member
I don't think that will be a problem. Listen to the Webcast and you will hear a banker calling up asking about financing.

They have $100 mil in assets right now. That covers 5 airplanes right away, unleveraged! I think they will be able to finance all 35 aircraft with little difficulty.
 

IrishSheepdog

Sitting in the median
It's not that UA is dissing ACA, it's that ACA is rejecting offers from UA... I guess UA is putting something in the contract that states they can "replace" ACA in 2 years.
 

pljenkins

Resident Knucklehead
I wonder, is this clause something unique to the deal UA is trying to put together with ACA, or did the other two carriers sign off on this clause in their MOU? I can't imagine Whiskey or Skywest signing off on that clause either, and I'm sure I'd have heard about it by now if something like that was in the Whiskey deal.

P.
 
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