The point with Cape Air is... some regionals don't require that leverage. Allegiant as well. Yes, a start-up. But perhaps also a trend. We will see.

But interesting to note... Southwest and Cape Air are both making money. And they are both stand-alone airlines. Hmmm....

Actually, I-Air didn't "attempt to compete" with UAL per se, it was more incidental to what happened. Picking up and moving to an entire different airport wasn't feasible. Add to that, ACA/I-Air held the leases on those gates for something like 20 more years and a decent lease rate.

Part of the market research that went into it discovered that people would GLADLY drive all the way to BWI to take advantage of SW's low fares. As opposed to paying higher fares out of IAD where AA, UAL, and USAir dominate. The NoVa area is huge, and that's a large market of passengers.

The business plan was to capture the flier who drove all the way to BWI and draw them back to IAD with a low cost option. As has been mentioned, when carriers in bankruptcy match fares, it's hard to compete. Add to that the same thing that helped do XJT/Branded operations in, fuel had just about doubled from start up to shut down.

Southwest hasn't made money lately.

Think about what you are saying.

Allegiant and Cape Air are not your typical airline models. Regionals are used to move traffic to a hub then to their connection. Both Allegiant and Cape Air are designed to move passengers to a specific destination and they maximize their revenue through diversifiying the O side of the equation and limiting the D side (whereas most airlines try to maximize both). Allegiant also gains 25% of it's revenue through incidentals, for a time a unique position, that is now trying to be emulated by all with their fees. Allegiant's primary competitor is the regional airline and AAA. Their direct flights are competing against two-leg flights or a 90min drive to the nearest hub of a major.

Any airline, regional or otherwise, can survive on it's own provided it is well managed and marketed. Regionals biggest problem is their lack of marketing and infrastructure as they rely on their major partners to do all the lifting here. This two items require A LOT of startup capital to invest and is a major hurdle to overcome.

Oh my. Someone busting out the old "Cape Air isn't a real airline because they don't fly jets" routine. :D

Let me set you straight: I've flown a jet at a 121 regional, and I currently fly for Cape Air. It's the same job in smaller airplanes. We have 56 C402s and 2 ATR-42s, carried over 650,000 passengers in 2007, have more operations in/out of Boston Logan than any other carrier on a daily basis, and with the exception of the ATRs, do it with "Cape Air" plastered in big letters on the tail.

If you want to get into the "real airline" debate, we win. Not to put down jet regionals in any way (I'm still looking forward to taking recall to XJT if that ever happens), but RJ operators provide feed for a mainline operator. We provide our own transportation under our own name on our own ticket stock. Can Eagle say the same?

I couldn't agree more.

Cape Air has done what should be done: match the aircraft to the market.

Night...you hit it on the head. Cape Air is the poster child for filling a niche market and not over-expanding into something they aren't.

Five to Seven flights a day from Dulles to Lansing, Michigan and just about every airport in upstate NY with seven pax per leg all paying $39 intoductory fares didn't do much for Indy Air either.

I was worried I'd have to pass the hat for de-ice fluid.


Oh, and maybe the fact that a great deal of the CRJ's were not RVSM certified had an affect on the fuel costs as well.