Regional Airline/Major Airline relationships...


New Member
If a major airline is not doing so hot, will its regional companies perform poorly as well? (If more bad news comes from US Airways, does this mean that Mesa will be effected in a bad way?)
...Lets say that United announces that its going to furlough more peple and cut more routes...Will ACA have to do the same?
Depends. They may very well shift some of those routes to ACA. Maybe those routes can't be served profitably with a 737 or A319, but they can with an RJ. So maybe they say, okay, we are no longer flying from city A to city B with a 737 but we'll shift that to ACA and their RJs.

Not sure if the union has to approve that or not.
I see...You know, I heard a while ago that ACA may seperate from United, does anyone know if thats still a plan, or was that just a rumor?
Both maybe?

I see the issue in two lights:

As a pilot, I say k!ckass because it's going to be exciting to be part of a startup as such. The competition is really going to heat up because USAir is on the ropes, UAL is gathering strength and SWA is going to totally heat things up in that region.

However, if I was a shareholder, I'd probably lean towards the Mesa acquisition because Mesa is a proven, stable airline with a higher probability of providing a better return on investment than rolling the dice on a metamorphisizing regional airline. History is pretty fickle when it comes to 'new' airlines.

Crazy days my friend. My pal Bob is looking into nursing.
In response to the original question, No. The fortunes of regional partners don't always follow the fortunes of the major they're allied with. The regionals have had a lot of growth the past few years as the airlines have shifted to smaller jets on less-dense routes.

As to ACA/Mesa/Independence, I'm with Doug I think. I'd like to see Indy Air succeed, it'll sure be exciting. And I certainly think that having less people working for Ornstein is a good thing. From a shareholder's point of view, though, being acquired by Mesa has far less risk than becoming an independent airline.

That said, I wish ACA the best of luck. I've got some friends who work there.

It all depends. Right after 9/11, ATA mainline reduced its flight schedule by 20%, however we (it's wholly owned regional) kept running at 100%, then added flights a few months later (and were hiring). Now, we have slowed hiring, but ATA is hiring at a very brisk pace, and adding routes. It might reverse again where we are hiring quite a bit and adding routes and aircraft in 6 months, who knows...
As far as Indy Air goes, the recent injunction preventing Mesa from replacing our board of directors paves the way for the low-fare carrier. Even though the injunction isn't permanent, the investigation and final ruling could be a long time away and Independence Air is proceeding in the meantime.

The next big hurdle is to get released from our current UAL contract. We havn't been awarded a new contract under the bankruptcy court, but we still have obligations under the old one. UAL can't leave bankruptcy protection until the IAD UEX flying is taken care of and they can't send in Mesa because Mesa doesn't have the airplanes or the gates. It's a catch-22.

I see a slim possibility that we will get an interim contract to cover UEX flying until Mesa can get up to speed while we still proceed with IA. We'll just have to see what happens.

As far as stockholders are concerned, I think that some do agree with Doug about the risk of the new venture. The market hates uncertainty and Mesa's offering represents a certainty, even if unpleasant.

On the other hand, Mesa's fortunes are largely tied to two companies who were recently/currently bankrupt and who stand a good chance of re-entering bankruptcy in the near future. If that happens, what will happen to Mesa's already razor thin profit margins? If they liquidate, how will Mesa pay for all those jets?

Indy Air is starting with an existing fleet and infrastructure of respectable size and lot of money in the bank. Additionally, a USA Today article on 12-18 indicated that we expect to retain the DAL flying.

Tie that together with the fact that JetBlue, ATA, AirTran and Southwest are either operating, planning or looking at using RJs and you can take a lot of anxiety out of ACA's plans.
Consistent with my oversimplification of airline stuff, I think the relationship between the big airplane airline and the small airplane airline is like a cruise ship.

When the cruise ship is doing well, the big boat is fine as well as the dingy. But if the ship starts to sink, the dingy starts getting brisk business from passengers being shifted off the big boat.

However, there's a big chain connecting the big boat and the dingy that if the big boat sinks, it's going to drag the dingy down with it.

Unless, of course, you're an independent or go solo like ACA.

If American sinks, Eagle's toast.

If Delta sinks, ASA and Comair are toast.

If United sinks, Skywest would probably be ok, but could make up some of the lost business as Continental connection or United Express.