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View Full Version : New Airline for Salt Lake


VictorAW
02-11-2020, 08:32 AM
David Neeleman to start yet another airline flying 30 Embraer195's & 60 Airbus 220's. Based in SLC.


https://www.ksl.com/article/46714876?fbclid=IwAR1bRbIuLVk_8_5E1CPL0G-xKbxf_OzMA46Hns6dFdrw33g3VxqQlYHNo1A


Spudhauler
02-11-2020, 08:52 AM
David Neeleman to start yet another airline flying 30 Embraer195's & 60 Airbus 220's. Based in SLC.


https://www.ksl.com/article/46714876?fbclid=IwAR1bRbIuLVk_8_5E1CPL0G-xKbxf_OzMA46Hns6dFdrw33g3VxqQlYHNo1A

I think he will headquarter it there but the flying will mostly be done out of smaller or underserved airports. Doesn't appear that he will be trying to take on Delta in one of their primary hubs.

tcco94
02-11-2020, 02:49 PM
He has already said there are no plans to service in our out of SLC. He doesn't want to go head to head with Delta. From what I read it's going to start out east coast and move west. He said the airline will fly similar to Allegiant style routes that have demand but aren't being utilized. So as of now it doesn't sound like a threat at all for SLC.

Jetblue has corporate offices in SLC too. He's from Utah (raised in Utah), so it only makes sense. But not really as their hub for flying.


deltabound
02-11-2020, 03:20 PM
Fascinating article, especially the part about a "super app" that would tie in not just airline purchases, but AirBnB and VRBO (and presumably Lyft and Uber, eventually).

China does the "super app" extremely well. Imagine having everything tied into a single super app...chat, store discounts, payment, banking, navigation, etc. (yes, there are downsides...security for one, and China has unique problems)

The fact that Neleeman is talking about this now almost makes me think he's more interested in the "super app" idea and that's the ultimate goal. SLC is a rapidly growing technology hub, so locating here makes sense (much cheaper than Silicon Valley with software engineers living in pods).

This is one to watch. But not for the airline part, at least not initially.

Aviator147
02-11-2020, 06:29 PM
Found this image scrolling social media. Apparent leak of some potential routes/city pairs. No mention of SLC being a base.

https://ibb.co/r5LCs32

sailingfun
02-12-2020, 04:23 AM
His financial plan includes paying regional airline wages to pilots.

tomgoodman
02-12-2020, 04:43 AM
His financial plan includes paying regional airline wages to pilots.


“Everybody got a plan......’til they get hit!” :rolleyes:

—Mike Tyson

sailingfun
02-12-2020, 04:45 AM
“Everybody got a plan......’til they get hit!” :rolleyes:

—Mike Tyson

Lets hope he gets hit hard!

D B Cooper
02-13-2020, 08:14 AM
https://www.yahoo.com/finance/news/american-airlines-selects-seattle-first-150731754.html

So is AA trying to compete in Seattle?

Bucking Bar
02-13-2020, 08:42 AM
https://www.yahoo.com/finance/news/american-airlines-selects-seattle-first-150731754.html

So is AA trying to compete in Seattle?

How long does that take at lift/drag max? I assume that's what they're flying, or 5 knots into the hook.

Got stuck behind one doing 0.74 into a 140 knot headwind last night.

Appears their contract is going almost as fast as their jets.

forgot to bid
02-13-2020, 10:58 AM
Serial entrepreneur.

I mean start one airline and it succeeds, maybe, you say wow.

Two? He knows what he is doing.

Three? Okay

Five? Psychological issues?

Extenda
02-13-2020, 11:08 AM
“Everybody got a plan......’til they get hit!” :rolleyes:

—Mike Tyson

I thought it was “Everybody’s got a plan until they get punched in the mouth”

either way my favorite sports quote of all time.

DWC CAP10 USAF
02-13-2020, 01:17 PM
Serial entrepreneur.

I mean start one airline and it succeeds, maybe, you say wow.

Two? He knows what he is doing.

Three? Okay

Five? Psychological issues?

He has ADHD

GogglesPisano
02-13-2020, 02:08 PM
I thought it was “Everybody’s got a plan until they get punched in the mouth”

either way my favorite sports quote of all time.

Tyson was paraphrasing von Moltke -- probably accidentally since he likely never heard of him.

Scoop
02-13-2020, 03:19 PM
Tyson was paraphrasing von Moltke -- probably accidentally since he likely never heard of him.


The elder or junior? :) It was also a quote used by one of our councils describing negotiating during C-15 TA-1, needless to say it did not go over well.

Scoop

badflaps
02-13-2020, 06:34 PM
He has ADHD
I'd like to know more about that, but I lose interest.

Lifeisgood
02-15-2020, 03:21 PM
Brilliant guy and yes he will outsmart us all.
New jets with no payments for 2 years and 3 year free maintenance. Regional pilot pay and entry pay for everyone else.
He will make a killing having lots of fun doing what he loves and will sell it in 5 years as usual.
Not too bad for a adhd kid.

Big E 757
02-15-2020, 04:42 PM
Brilliant guy and yes he will outsmart us all.
New jets with no payments for 2 years and 3 year free maintenance. Regional pilot pay and entry pay for everyone else.
He will make a killing having lots of fun doing what he loves and will sell it in 5 years as usual.
Not too bad for a adhd kid.

I starting to wish I had ADHD. I’d probably be a lot more productive.

sailingfun
02-18-2020, 07:34 AM
Brilliant guy and yes he will outsmart us all.
New jets with no payments for 2 years and 3 year free maintenance. Regional pilot pay and entry pay for everyone else.
He will make a killing having lots of fun doing what he loves and will sell it in 5 years as usual.
Not too bad for a adhd kid.

Here goes the free jets with no payment rumors again. He never got them at JetBlue and is not getting them now. Nobody hands out billions in airframes for free to startups.

gloopy
02-18-2020, 08:51 AM
Here goes the free jets with no payment rumors again. He never got them at JetBlue and is not getting them now. Nobody hands out billions in airframes for free to startups.

Yeah that's vastly overblown.

They do however get numerous baked in advantages like:

Every plane under full warranty (effectively zero MX costs) assuming they buy new planes
Good initial pricing usually
Every employee on year 1 pay/vaca/sick leave/etc thats MUCH lower than anywhere else
Massive incentive for employees to work for less/PFS (pay for seniority)
Local yocal airport Boss Hoggs giving them mass subsidies/landing fee cuts/free advertisement/pref gates etc
Dot gov gifting them preferential slots etc
And perhaps most importantly: major airline execs too stupid to squash the bottom feeders when they're most vulnerable and only recognizing the threat they are once its to late (Quarter to Quarter thinking rampant in our pathetic B-School system).

Their biggest disadvantage right now IMO will be a much smaller pool of qualified pilots and MX willing to work for business model subsidy rates (pay for seniority) compared to any of his previous attempts. Even JB was the benefactor of incredible timing. $75 Captains placated by theoretical stock options (that ended up panning out for them out of sheer luck) who became $120 Captains just before the bottom fell out and no one wanting in had anywhere else to go. The hiring landscape is radically different now. Simply thinking you will offer RJ plus rates to darken the skies with your cut throat super saver model is dellusional in this occupational pilot climate. They'll fill classes for a little while but they'll most likely rapidly have to balloon their labor costs far above the current board room fantasy projections they base their model on. And IMO they are also misjudging the competitive response from not only Legacy airlines but also LCC's and ULCCC's.

But maybe they can get the Boss Hoggs down at the "Laguardia of the South" (Silver Comet field LMAO!) to spool up a massive state fund giveaway to lure a few flights a day so Clark Howard can vomit praise on their unsustainable Skybus-esque business model for free every day. I say let them spool up, agressively poach their pilots (at least at double the rate that they hire from regionals) and overlay 80% of their top 10 routes at all times with loss leader fares. Two (way more than two actually) can play at their game, and the days of looking at other's established markets as a menu to take as you wish are hopefully over.

notEnuf
02-18-2020, 09:32 AM
Yeah that's vastly overblown.

They do however get numerous baked in advantages like:

Every plane under full warranty (effectively zero MX costs) assuming they buy new planes
Good initial pricing usually
Every employee on year 1 pay/vaca/sick leave/etc thats MUCH lower than anywhere else
Massive incentive for employees to work for less/PFS (pay for seniority)
Local yocal airport Boss Hoggs giving them mass subsidies/landing fee cuts/free advertisement/pref gates etc
Dot gov gifting them preferential slots etc
And perhaps most importantly: major airline execs too stupid to squash the bottom feeders when they're most vulnerable and only recognizing the threat they are once its to late (Quarter to Quarter thinking rampant in our pathetic B-School system).

Their biggest disadvantage right now IMO will be a much smaller pool of qualified pilots and MX willing to work for business model subsidy rates (pay for seniority) compared to any of his previous attempts. Even JB was the benefactor of incredible timing. $75 Captains placated by theoretical stock options (that ended up panning out for them out of sheer luck) who became $120 Captains just before the bottom fell out and no one wanting in had anywhere else to go. The hiring landscape is radically different now. Simply thinking you will offer RJ plus rates to darken the skies with your cut throat super saver model is dellusional in this occupational pilot climate. They'll fill classes for a little while but they'll most likely rapidly have to balloon their labor costs far above the current board room fantasy projections they base their model on. And IMO they are also misjudging the competitive response from not only Legacy airlines but also LCC's and ULCCC's.

But maybe they can get the Boss Hoggs down at the "Laguardia of the South" (Silver Comet field LMAO!) to spool up a massive state fund giveaway to lure a few flights a day so Clark Howard can vomit praise on their unsustainable Skybus-esque business model for free every day. I say let them spool up, agressively poach their pilots (at least at double the rate that they hire from regionals) and overlay 80% of their top 10 routes at all times with loss leader fares. Two (way more than two actually) can play at their game, and the days of looking at other's established markets as a menu to take as you wish are hopefully over.

It's about keeping capacity disciplined so there is pricing power. Anyone who floods the market with capacity will poison the well. They do need to be dealt with early though.

gloopy
02-19-2020, 09:16 AM
It's about keeping capacity disciplined so there is pricing power. Anyone who floods the market with capacity will poison the well. They do need to be dealt with early though.

Capacity "discipline" only works if all participate. The established airlines, including LCC's and ULCC's, should together view emerging start ups as extreme threats to their futures. Trying to queeze small additional quarterly profits while letting cancerous predatory models flourish while the bonus mongers bask in their quarterly glory is a poor stratedgy long term. Flooding capacity on very limited stretegic markets for a liited time is a wise investment that will pay billions in the long run any time a future SWA or JB or Allegiant is squashed at the Skybus level. Proportional retreating as pump and dump endless growth mode startups get to pick and choose your establsihed markets from a menu on their terms has to be fought. And even if that means a short term hit to the right of the decimal on our PS checks, its the wisest long term investment that can be made for the employees and long term investors.

Big E 757
02-21-2020, 06:53 PM
Capacity "discipline" only works if all participate. The established airlines, including LCC's and ULCC's, should together view emerging start ups as extreme threats to their futures. Trying to queeze small additional quarterly profits while letting cancerous predatory models flourish while the bonus mongers bask in their quarterly glory is a poor stratedgy long term. Flooding capacity on very limited stretegic markets for a liited time is a wise investment that will pay billions in the long run any time a future SWA or JB or Allegiant is squashed at the Skybus level. Proportional retreating as pump and dump endless growth mode startups get to pick and choose your establsihed markets from a menu on their terms has to be fought. And even if that means a short term hit to the right of the decimal on our PS checks, its the wisest long term investment that can be made for the employees and long term investors.

I agree with everything you said. The problem is that there are laws in place to prevent this, if I’m not mistaken. At some point the “victim” airline will go crying to the Justice Department using words like capacity dumping, predatory pricing, and collusion, and the airlines will be forced to play nice. It’s completely acceptable for a start up to come in and cherry pick routes and leverage their lower cost structure to under cut the established carriers, but to leverage our large networks ability to absorb small losses to then undercut them, now everything just became way too unfair and must be stopped.

gloopy
02-22-2020, 06:46 AM
I agree with everything you said. The problem is that there are laws in place to prevent this, if I’m not mistaken. At some point the “victim” airline will go crying to the Justice Department using words like capacity dumping, predatory pricing, and collusion, and the airlines will be forced to play nice. It’s completely acceptable for a start up to come in and cherry pick routes and leverage their lower cost structure to under cut the established carriers, but to leverage our large networks ability to absorb small losses to then undercut them, now everything just became way too unfair and must be stopped.

Let them try and get everyone else's lower fares thrown out in court then. They have no intrinsic right to capacity dump themselves and then squeal when others do it. Sure if a legacy put hourly 777's with dollar seats on every route they do they'd have a case. But good luck complaining about someone else agressively matching their loss leader super saver promo fares. Any airline can do that anytime they do. And it wouldn't be "collusion" anyway as a competitive response would very naturally involve some airlines fighting back harder in the northeast vs the west coast vs the midwest vs beach markets etc. If and when they try and spew a public relations outcry, fight right back about how they are using predatory robber baron business tactics to slash wages and job stability and reset the longevity clock on employees to harm the American worker and take those savings as profit. If they get a token win in court here or there so be it. It will never be enough to sustainably subsidize an unsustainable business model. Established businesses have a right to fight back extremely hard. While there are some limits, those limits should be pushed to the max. An occasional pity party settlement or DoJ fine is nothing compared to allowing a cancer to grow into a powerhouse.