United Low Cost | Regionals Update

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THE DARK SIDE OF LOW COST

United Airlines Forges Ahead on Low-Cost Carrier

Source: The Denver Post

Publication date: 2003-09-28

Arrival time: 2003-09-29

Sep. 28--To make its new low-cost operation a success, United Airlines must create an entrepreneurial culture, closely watch costs and attract budget travelers without competing against the main brand.

In other words, United must accomplish what no major network carrier has, despite many tries. From Continental Lite to Shuttle by United, a succession of low-cost strategies failed during the 1990s.

"It's a concept that just won't work," said Ron Kuhlmann, vice president of Unisys R2A, an aviation consulting firm. "If creating an airline within an airline is a good idea, then why not apply it to the entire company?"

http://cnniw.newsreal.com/pages/cnniw/Story.nsp?story_id=42147559&ID=cnniw&scategory=Aviation&

REGIONAL CROSSROADS

Profit-leader ACA builds its case for new low-fare venture

by Gregory Polek

During a quarter in which all the big publicly traded regional airlines turned a handsome profit, it came as little surprise that Atlantic Coast Airlines led the pack, as the Sterling, Va.-based carrier prepared to embark on the most ambitious, and perhaps riskiest, undertaking in its 14-year history. While fellow United Express carriers SkyWest and Air Wisconsin accept revisions to their fee-per-departure contracts that result in suppressed yields but further flying opportunities with 70-seat jets, ACA has refused to acquiesce, a stand largely reflected in its impressive profits for the second quarter, but one that will most likely result in the end of its relationship with United Airlines.

http://www.ainonline.com/issues/09_03/09_03_profitleaderp96.html

REGIONALS UPDATE

SkyWest Adds US Airways Code Share

The trend toward consolidation and alliances among major airlines may concern some in the Justice Department, but it hasn’t restricted opportunities for regional carriers such as SkyWest Airlines, which last month inked its first code-share deal with US Airways.

ALPA Foils US Airways’ Plans for CRJ705

Unable to convince the Air Line Pilots Association to accept further regional-airline scope-clause concessions, US Airways has converted its firm order for 25 Bombardier CRJ705s to positions for 70-seat CRJ700s and assigned the airplanes to Phoenix-based Mesa Air Group.

United Moves to Shore Up Regional Network

United Airlines completed a series of moves last month that signaled not only its intention to embark on a large-scale expansion of its regional network, but perhaps a willingness to play “hard ball” with its long-time United Express affiliate, Sterling, Va.-based Atlantic Coast Airlines. At press time finalizing contractually guaranteed rate adjustments with its bankrupt mainline partner, ACA last month watched United sign an MOU with Mesa Air Group for regional jet feed and a new code-share deal with St. Louis-based Trans States Airlines.

http://www.ainonline.com/Departments/AIN_commuter.html