Originally Posted by
Cujo665
Independence started off in huge debt; owed lots of money on equipment and aircraft. Both comparisons you’re talking about were fee for departure carriers with tons of debt. Bad recipie. The Air Tran deal was not a go it alone endeavor, it was a bad CPA, but did stem the bleeding for AW while they reorganized.
Via owns all the aircraft outright, has very very little debt, and is flush with cash. They weren’t flying full. Check the FAA load reports.
AW was FFD, not the same either.
Um. Wrong. Independence Air had the highest funding of any startup carrier. The problem is they blew through $125 million in cash until the Airbus got on the property. Once the company got rid of some of the 50 seaters and were down to 12 319s and 30 crjs it was making money, but not enough to overcome the hole Skeen had dug for himself by flying 90 CRJs around by themselves. Skyrocketing fuel prices during 2004 and 05 didn't help either. I worked there. The planes were full after the first couple of months and people in DC loved the airline.
So if you want to tell yourself this will work in an environment where oil prices are going up go ahead. But Fly I, Expressjet, and Air Wisconsin all tried it and eventually had to give in to the fact that the CASMs on 50 seaters just don't work in a LCC or ultra LCC model, particularly when you don't have some kind of narrowbody in the mix to lower overall CASMs.
Good luck. You're gonna need it.