Independence Air
11-15-2005, 07:59 AM
#1
Gets Weekends Off
Thread Starter
Joined APC: Jul 2005
Posts: 2,242
Independence Air
Found this on www.airliners.net...Don't know anything about I Air or aviation business but this guy/gal has some strong words on the subject...
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"Library of Dumb Dead Airlines--Joe's Newsletter
I went to the Library to refresh my memory on some of the dumb ideas that have made it aloft over the years. There was Western Pacific, which thought it could survive by selling its fuselages as flying billboards. There was Branson, which only flew to the Missouri resort town. Freedom Air wanted to be the airline for in-flight smokers. There was SkyTrain and Jet Train and Jet World and Sunworld. Airlines started by travel agents (Tahoe and Ultrair) and carriers launched by displaced pilots (Pride and Kiwi). There was a conga line of carriers named National, Midway, Braniff, Eastern and Pan Am, each one predicated on the theory that adopting the brand of an already-failed airline was the key to success. There was an airline founded using old Japanese prop planes (MidPacific) and one or two named after an old widebody jet (TriStar). There were sybaritic luxury airlines (Regal, McClain, MGM Grand), misbegotten discounters (Leisure Air, Eastwind, Air South) and even an eponymous carrier started by a disgruntled founder of Southwest (Muse). But Independence Air beats all of the crashed-and-burned carriers in the Library of Dumb Dead Airlines. It is, in fact, the Dumbest Airline in American History.
In slightly less than 18 months, Independence has gone from profitable regional carrier to failed start-up. It has blown a huge horde of cash and destroyed a company that just three years ago this week was selling north of $15 a share. It has flown the wrong planes to the wrong places with the wrong schedules at the wrong prices. It has failed in big cities and small towns. Failed flying North to South and East to West. Failed flying big, new jets and small, old ones. And it did it all while defying the first-guessers who judiciously warned that Independence's business plan, such as it was, could never fly. Independence Air isn't dead yet--it hopes to keep flying during the higher-cash-flow holiday period and its bankruptcy filing envisions a court-supervised auction of assets in 60 days--but it will go to the head of the Dumb Dead Airline list the moment its final flight touches down at its Washington/Dulles hub. Because Independence Air was created with the dumbest aviation concept of all time: We got planes. We got gates. What the hell…"
__________________________________________________
"....The market understood what everyone except Atlantic Coast's management understood: Flyi had no passenger base of its own. It had no identity. Hubbing at delay-plagued Dulles was risky because United was not about to abandon its hub, US Airways was still a large player in Washington and JetBlue Airways was building capacity there. The decision to restrict ticket sales cut out travel agents, third-party Web sites and the big computerized reservation systems. Worse, RJs were impossibly inefficient and expensive to operate in the manner that Independence was proposing. Most estimates peg the RJ disadvantage at 30 percent per seat mile compared to the larger jets preferred by traditional discount airlines. Launching a low-fare airline with high-cost planes was beyond hubris. It was fiscal insanity.
__________________________________________________ _
"...For all intents and purposes, Independence Air was dead on the day it launched, June 16, 2004. At its frenzied height, it operated 600 flights a day and flew to 46 cities. It blackened the Eastern skies with suicidally large schedules to places like Huntsville, Alabama; Lansing, Michigan; Charleston (West Virginia and South Carolina); Albany, Buffalo, Syracuse and Rochester, New York; Cleveland, Columbus and Dayton, Ohio; and airports throughout the Carolinas, the Border States and Florida. Fares plummeted to as low as $29 one-way thanks to endless fare sales, yet Independence Air had months when it was filling fewer than 50 percent of its 50-seat aircraft. By the end of last year, Independence was hemorrhaging cash and gyrating like a top: It began selling seats through all the normal channels, fiddled with schedules, lopped cities off the route map, reworked fares and mortgaged what future it still had.
______________________________________________
"....When the Airbus A319s began arriving last November, there were no seatback television monitors (Independence had promised in-flight TV service, but then couldn't afford to equip the planes) and nowhere to fly the planes. First they flew to Tampa and Orlando, markets already saturated with low-fare seats. In March, Independence launched a desperate West Coast expansion: Airbus flights to Los Angeles, San Diego, Las Vegas, San Jose, Seattle and San Francisco. The problem with going West? Transcon routes were also saturated with low-fare seats. Independence's coast-to-coast fares dropped to $69 one-way. The transcon routes were dumped even before Independence trooped to the bankruptcy court on Monday.
Over these past 18 months, whenever observers would criticize Independence Air's basic concept and its day-to-day execution, an E-mail would come from someone in the airline's management. The gist of the defense: We had all these planes. What else could we do?. ........What could Atlantic Coast have done? Swallowed its corporate pride and cut the best deal possible with United. Or pursued commuter-jet flying with other airlines. Or even liquidate when it severed its relationship with United. Liquidation last year would have guaranteed Atlantic Coast shareholders a nice little payout. Now they'll be wiped out in the bankruptcy.
__________________________________
"...creating a dumb airline like Independence Air has helped no one. Not the small cities that were seduced into supporting Independence by the chimera of unsustainable low fares. Not Atlantic Coast's employees, who accepted huge concessions to help launch Independence, took more concessions this week to keep it flying and will soon lose their jobs anyway. Not the million members of Independence's iClub frequent-flyer program, which will almost surely disappear without a trace. And certainly not business travelers at large, who knew a hopeless airline concept when they flew one.
In other words, Independence Air's place as the Dumbest Airline in American History is now secure"
__________________________________________________
*********************************************
My comments: I have not flown DH yet, but at least i like their image/design. I wonder if their concept (with less frequencies and more carefully picked marketS) would have worked better with E175/E190 instead. I know they own all the CRJs,but probablly the Airbus was too big and the CRJs too small, leaving then the E planes as a better choice for such a frequent service to secondary markets with 1 hub.
--------------------------------------------------------------------------
"Library of Dumb Dead Airlines--Joe's Newsletter
I went to the Library to refresh my memory on some of the dumb ideas that have made it aloft over the years. There was Western Pacific, which thought it could survive by selling its fuselages as flying billboards. There was Branson, which only flew to the Missouri resort town. Freedom Air wanted to be the airline for in-flight smokers. There was SkyTrain and Jet Train and Jet World and Sunworld. Airlines started by travel agents (Tahoe and Ultrair) and carriers launched by displaced pilots (Pride and Kiwi). There was a conga line of carriers named National, Midway, Braniff, Eastern and Pan Am, each one predicated on the theory that adopting the brand of an already-failed airline was the key to success. There was an airline founded using old Japanese prop planes (MidPacific) and one or two named after an old widebody jet (TriStar). There were sybaritic luxury airlines (Regal, McClain, MGM Grand), misbegotten discounters (Leisure Air, Eastwind, Air South) and even an eponymous carrier started by a disgruntled founder of Southwest (Muse). But Independence Air beats all of the crashed-and-burned carriers in the Library of Dumb Dead Airlines. It is, in fact, the Dumbest Airline in American History.
In slightly less than 18 months, Independence has gone from profitable regional carrier to failed start-up. It has blown a huge horde of cash and destroyed a company that just three years ago this week was selling north of $15 a share. It has flown the wrong planes to the wrong places with the wrong schedules at the wrong prices. It has failed in big cities and small towns. Failed flying North to South and East to West. Failed flying big, new jets and small, old ones. And it did it all while defying the first-guessers who judiciously warned that Independence's business plan, such as it was, could never fly. Independence Air isn't dead yet--it hopes to keep flying during the higher-cash-flow holiday period and its bankruptcy filing envisions a court-supervised auction of assets in 60 days--but it will go to the head of the Dumb Dead Airline list the moment its final flight touches down at its Washington/Dulles hub. Because Independence Air was created with the dumbest aviation concept of all time: We got planes. We got gates. What the hell…"
__________________________________________________
"....The market understood what everyone except Atlantic Coast's management understood: Flyi had no passenger base of its own. It had no identity. Hubbing at delay-plagued Dulles was risky because United was not about to abandon its hub, US Airways was still a large player in Washington and JetBlue Airways was building capacity there. The decision to restrict ticket sales cut out travel agents, third-party Web sites and the big computerized reservation systems. Worse, RJs were impossibly inefficient and expensive to operate in the manner that Independence was proposing. Most estimates peg the RJ disadvantage at 30 percent per seat mile compared to the larger jets preferred by traditional discount airlines. Launching a low-fare airline with high-cost planes was beyond hubris. It was fiscal insanity.
__________________________________________________ _
"...For all intents and purposes, Independence Air was dead on the day it launched, June 16, 2004. At its frenzied height, it operated 600 flights a day and flew to 46 cities. It blackened the Eastern skies with suicidally large schedules to places like Huntsville, Alabama; Lansing, Michigan; Charleston (West Virginia and South Carolina); Albany, Buffalo, Syracuse and Rochester, New York; Cleveland, Columbus and Dayton, Ohio; and airports throughout the Carolinas, the Border States and Florida. Fares plummeted to as low as $29 one-way thanks to endless fare sales, yet Independence Air had months when it was filling fewer than 50 percent of its 50-seat aircraft. By the end of last year, Independence was hemorrhaging cash and gyrating like a top: It began selling seats through all the normal channels, fiddled with schedules, lopped cities off the route map, reworked fares and mortgaged what future it still had.
______________________________________________
"....When the Airbus A319s began arriving last November, there were no seatback television monitors (Independence had promised in-flight TV service, but then couldn't afford to equip the planes) and nowhere to fly the planes. First they flew to Tampa and Orlando, markets already saturated with low-fare seats. In March, Independence launched a desperate West Coast expansion: Airbus flights to Los Angeles, San Diego, Las Vegas, San Jose, Seattle and San Francisco. The problem with going West? Transcon routes were also saturated with low-fare seats. Independence's coast-to-coast fares dropped to $69 one-way. The transcon routes were dumped even before Independence trooped to the bankruptcy court on Monday.
Over these past 18 months, whenever observers would criticize Independence Air's basic concept and its day-to-day execution, an E-mail would come from someone in the airline's management. The gist of the defense: We had all these planes. What else could we do?. ........What could Atlantic Coast have done? Swallowed its corporate pride and cut the best deal possible with United. Or pursued commuter-jet flying with other airlines. Or even liquidate when it severed its relationship with United. Liquidation last year would have guaranteed Atlantic Coast shareholders a nice little payout. Now they'll be wiped out in the bankruptcy.
__________________________________
"...creating a dumb airline like Independence Air has helped no one. Not the small cities that were seduced into supporting Independence by the chimera of unsustainable low fares. Not Atlantic Coast's employees, who accepted huge concessions to help launch Independence, took more concessions this week to keep it flying and will soon lose their jobs anyway. Not the million members of Independence's iClub frequent-flyer program, which will almost surely disappear without a trace. And certainly not business travelers at large, who knew a hopeless airline concept when they flew one.
In other words, Independence Air's place as the Dumbest Airline in American History is now secure"
__________________________________________________
*********************************************
My comments: I have not flown DH yet, but at least i like their image/design. I wonder if their concept (with less frequencies and more carefully picked marketS) would have worked better with E175/E190 instead. I know they own all the CRJs,but probablly the Airbus was too big and the CRJs too small, leaving then the E planes as a better choice for such a frequent service to secondary markets with 1 hub.
11-15-2005, 09:16 AM
#2
Chief Jeppesen Updater
Joined APC: Oct 2005
Position: Executive Transport Driver
Posts: 3,080
The business plan had some merit... the implementation was all screwed up. Unfortunately for me and all of my former cohorts at IDE, much of what is written in this article is dead on.
I think the product that the employees built was an excellent one. It definately was able to build a strong customer base.
The CRJ's hurt the operation... particularly when there were 16 flights a day running empty to some of the cities served by the airline. The A319s didn't come soon enough to offset the high CASMs of the CRJs... realistically the company needed three times as many 319s as they have and 1/2 the CRJs.
I seriously doubt the company will make it past January... keeping my fingers crossed, but I'm certainly not holding my breath... I just hope the airline doesn't fold right before the holidays and screw a bunch of the loyal customers that have put their faith in the company.
I think the product that the employees built was an excellent one. It definately was able to build a strong customer base.
The CRJ's hurt the operation... particularly when there were 16 flights a day running empty to some of the cities served by the airline. The A319s didn't come soon enough to offset the high CASMs of the CRJs... realistically the company needed three times as many 319s as they have and 1/2 the CRJs.
I seriously doubt the company will make it past January... keeping my fingers crossed, but I'm certainly not holding my breath... I just hope the airline doesn't fold right before the holidays and screw a bunch of the loyal customers that have put their faith in the company.
11-15-2005, 09:32 AM
#3
New boss = Old boss
Joined APC: Mar 2005
Position: Ca B737
Posts: 2,762
It is 20/20 hind sight to point to failed airlines and cite the reason for their demise. The fact is the entire industry is a failure. The industry has lost far more money than it has made. SW seems to have the only model that works. But even it's model is failing as an on going concern. They are making money by being in the fuel hedging business. Airlines are really a lousy way to make a fortune.
11-15-2005, 05:28 PM
#4
Gets Weekends Off
Thread Starter
Joined APC: Jul 2005
Posts: 2,242
Mike,
I agree with you about making a fortune in the airlines...As a pilot it seems harder and harder if not impossible to do it...For management - its a dream job...They have made a killing on their side taking from the guys/gals flying the line...
I feel for everyone in this industry...I'm glad I didn't get into it and have stayed happy with my PPL and will be remaining in the IT world...
-LA
I agree with you about making a fortune in the airlines...As a pilot it seems harder and harder if not impossible to do it...For management - its a dream job...They have made a killing on their side taking from the guys/gals flying the line...
I feel for everyone in this industry...I'm glad I didn't get into it and have stayed happy with my PPL and will be remaining in the IT world...
-LA
11-16-2005, 06:55 AM
#5
Gets Weekends Off
Joined APC: Apr 2005
Position: 767ER capt
Posts: 1,190
This underscores the inherent truth in the airlines: We are all at the mercy of the next MBA who shows up at the front door with an ivy-league degree and a carpet bag full of bright ideas.
This industry is worse than most, because it has a macho appeal that other industries lack; It's way cooler to be on the cover of Forbes with an airplane (rather than a flange or a semiconductor) in the background.
This industry is worse than most, because it has a macho appeal that other industries lack; It's way cooler to be on the cover of Forbes with an airplane (rather than a flange or a semiconductor) in the background.
Last edited by CVG767A; 11-17-2005 at 01:40 PM.
11-16-2005, 07:22 AM
#6
Chief Jeppesen Updater
Joined APC: Oct 2005
Position: Executive Transport Driver
Posts: 3,080
Originally Posted by CVG767A
This industry is worse than most, because it has a macho appeal that other industries lack; It's way cooler to be on the cover of Forbes with an airplane in the background, rather than a flange or a semiconductor.
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