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» Smilin' Jack   » Specific Airline Discussions   » American Eagle, American Connection   » Connection / Props v RJs

   
Author Topic: Connection / Props v RJs
Kenneth
Post Captain
Member # 259

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Hi all!

I haven't heard much of anything about American Connection in STL and was wondering how they've fared lately, if anyone has the inside scoop.

Related to that, I'm wondering if there's any plan in the works to convert some turboprop flying to RJ's out of STL (noting that ORD for example is touted as an RJ-only operation). I have an interest in part b/c my fiance' will not fly props, therefore when we travel together to the midwest (frequently) she pushes me to book trips through ORD to avoid a prop connection. Going to her hometown of Memphis, for example, there are far better connnections through STL than through ORD (esp as Eagle has cut back to 3 round trips ORD-MEM with no evening flight) but she won't fly through STL because of the turboprops.

Good luck to all,

Ken

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IA Farm Boy
Post Captain
Member # 2024

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"Memo
To: All Employees
From: Rick Leach
Date: May 12, 2003
Re: US Airways and American Update

Because of some new developments regarding our regional jet growth plan, I wanted to make you aware of some recent conversations with our code share partners, US Airways and American. This week we were notified that our bid to add more Regional Jets at US Airways has not been accepted. In addition, because of a number of issues, we will not be taking delivery of the 4 remaining RJ aircraft that we had planned on flying in AA colors in the 4th quarter of 2003.
This news is certainly disheartening given the amount of time and effort many of us have put into preparing for the American jets and in the proposals to US Airways.
In both cases, we have run up against a new environment that we will continue to face over the coming years as we look for growth opportunities as a regional carrier. Because of events over the last 18 months, you no doubt know that the airline industry has never faced a stiffer challenge. Many carriers have had to do things that they never dreamed of in order to stay in business and still be a viable part of the nations air transportation system.

While US Airways was in Chapter 11, they had very limited options on where to get the Regional Jets that they consider so important to their future. Had we been able to pursue a deal under those circumstances, we believe that we would have been successful in obtaining more orders. However since their emergence from Chapter 11, they have made a strategic decision to take that RJ growth internally through the wholly owned carriers at US Airways.

There were many reasons that went into that decision but a few stand out. The first was timing. As I have previously stated, we were late “coming to the party”; all the RJ’s had already been committed. For us to have been successful, we would have needed to entice US Airways to redirect previously committed deliveries to us even after their emergence from bankruptcy. The second was a desire to increase the value of an owned asset as opposed to giving value to a non-owned entity. One additional reason was the cost differential between the wholly owned option and Trans States narrowed considerably from pre-chapter 11 days, making the incentive to use a non-owned carrier less than in the past.

The American story is somewhat similar. They have indicated that with the new concessions obtained in their union negotiations, they no longer have a need for scope relief and will no longer be required to sell off and remove these last four aircraft from their op specs. They also pointed out that any additional aircraft we may bring on in the future to replace these four or any additional flying, would have to be at even lower costs than current aircraft we now operate. They recently concluded negotiations with suppliers, vendors and employees to lower their costs, again negating much of the cost advantage we had enjoyed over a wholly owned carrier when American looked at us as the best source for passenger feed. This is an important point because

we would have the ability to add additional jets at American provided we can bring these aircraft in at a cost acceptable to American, meaning lower than they can currently do themselves.

Obviously the environment is getting more difficult for everyone in the industry. Trans States is no exception. We as a group need to understand the new challenges facing our company and make sure we respond with the appropriate actions to ensure we find a way to succeed in the future. What does that mean? We need to work even harder at lowering our costs through efficiency enhancements that are available or can be created within the company. We need to ensure that we redouble our efforts to run a high quality, on-time and reliable airline. We also must redouble our efforts when dealing with our work groups to ensure that we remain competitive in the marketplace.

The stark reality is that we will stagnate with current work rules and agreements which will keep us from growth and make us unable to compete vigorously in this new economy. We have already received a level of success through concessionary negotiations with our vendors and suppliers and will reemphasize our efforts in this area. We need all employees to understand that it is not business as usual, but that it will take all of us working together to ensure a long-term place in the airline industry.

The cooperation recently displayed by ALPA is encouraging to me, and we will continue to work with our unions on issues which will enhance our ability to compete. I believe that they also understand the new environment and will continue to work with us to ensure that we can compete for future opportunities.

The challenge is certainly there, I am hopeful and optimistic that all of us at Trans States are up to the challenges and difficult tasks that lie ahead. I will keep you posted on any development in these areas with American or US Airways, as well as any other emerging opportunities. "

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