First Frontier, now Midwest. What's the deal?

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06-24-2009 | 11:17 AM

#21

RAHPilot5

Gets Weekends Off

Joined: Dec 2008

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From: E-170 Airbender

Quote:

Originally Posted by CANAM

I can't see RAH operating as a stand-alone carrier. Maybe BB plans on operating Frontier's A320s on behalf of one of their partners?

Wasn't a large share of Midwest owned by Northwest/Delta? Perhaps this is a way to get the EMB190 into Delta's door.

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06-24-2009 | 11:17 AM

#22

320ToBearz

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Joined: Apr 2006

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Quote:

Originally Posted by CANAM

Republic also bought out Delta's share is what I heard.

06-24-2009 | 12:18 PM

#23

rickair7777

Prime Minister/Moderator

Joined: Jan 2006

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From: Engines Turn or People Swim

Quote:

Originally Posted by IFly17

At what point do RAH's major partners get tired of BB biting the hand that feeds him? He is now in direct competition with the airlines who put the very money used to buy Frontier and Midwest in his pocket. When do they say enough and pull the plug? Why would they finance the competition?

Two part answer:

1) Current Feed Contracts: I'm certain his feed contracts specify non-compete, the exact nature of non-compete is probably spelled out clearly in the contract. BB is no fool, so he is probably not in violation at this point

Regional contracts do not normally forbid independent ops, but they do usually prohibit direct competition at a hub.

Not sure about the legal ramifications of buying an existing airline which competes in a hub (F9/DEN). Both sides could argue that one, unless the contract specifically addresses it. After all, F9 was there all along who owns them doesn't change too much in the short term.

2) New Feed Contracts in the Future: This is more challenging for the good reverend...when awarding new flying (or extending existing contracts which expire) there are few rules. If a major partnet did not like the direction RAH is headed, they could simply not renew expiring contracts, or not conisder RAH for new work.

Quote:

Originally Posted by IFly17

Does anyone think this is his grand scheme? Break away from the regional model and use all of his glorious E-jets and start his own "major" airline using his 145s as feeders? All the while paying his pilots crap wages? I think and I hope the majors will have a field day if he tries! Was Independence Air not lesson enough for him?

Good question...E-jets are big enough for a domestic airline, at least to start with. His low wages and the current low fuel prices would offset the inefficiency of the RJ's. But he would need bigger planes in the long run, especially when oil gets back up there.

And he is not locking himself into one hub (ie ACA) where he can be brutally targeted.

He needs a plan to survive the transition period...the time before he is making money as a standalone, but after he gets fired by his major partners for non-compete. The historical odds are not good...

Or maybe he just wants to run his regional business-as-usual and operate a couple of national airlines on the side as a hedge against future cutbacks in regional flying. The RAH scope will actually play to his advantage...it will force the merged pilot groups into the RAH list (if they are lucky and don't end up on the street), where he probably hopes to aggressively control wages by diluting older, wiser voices with spikey-hair/ipod-wearing regional pilots.