Things in the Sky

Yesterday, Republic announced earnings of $0.41/share, which is a bit worse than expected. But let’s look at the exciting stuff/

First, “During the quarter, the Company removed twelve 50-seat aircraft from its Continental operations.” Hm, I didn’t know that Continental was sizing down that operation a bit.

On the Frontier front, nothing much was mentioned in the release, and right now things just need to move through bankruptcy court. If I recall correctly, there are still a few days left for competing bids to be filed. Everything should be taken care of next month.

Next, the airline reported, “On July 10, 2009 the Company invested $7.5 million of cash in Mokulele Airlines, increasing our investment from 55% to approximately 89% of Mokulele’s common stock.” Maybe I was just paying attention, but I hadn’t heard about that additional investment.

Finally, with Midwest:

In addition to the 12 E170 aircraft currently operated for Midwest, the Company expects to operate nine 99-seat E190 aircraft and twelve 37-50 seat aircraft, all of which will be placed into service between July 2009 and January 2010. The E190 aircraft will be sourced on short-term leases and the 37-50 seat aircraft will be sourced from the Company’s existing fleet of aircraft or on short-term leases through a third party lessor.

So, there will be an E190 to replace each 717, as was pretty much expected. As for the RJs, here’s how the ERJ looks in Midwest colors.

OK, I really am going on vacation today. I promise. The flight is at 1 this afternoon, and the first of many guest posts will be up very soon, but I just found this story to be really interesting, and wanted to write a post on it.

Yesterday, we saw yet another development in the soap opera known as Milwaukee. The day after Southwest announced its intent to serve the city, Midwest came along and announced a new phase in its relationship with Republic: later this year (August and September) the airline will begin flying two E190 aircraft on behalf of Midwest. The planes will seat 100, and 20 of those seats are “Signature Service.” Apparently, this was rumored back in March.

There are a few things that are interesting with this announcement.

First, it’s definitely unique that Republic will be doing the flying. As Flight notes, union scope clauses restrict the kinds of aircraft (often evalualted by the number of seats) that can be flown by regional carriers. For example, take a look at US Airways. The E170/175s are flown under the US Airways Express brand and are flown by Republic. The E190s, however, are considered mainline aircraft. The Flight article says Midwest has no such scope clause restricting this kind of arrangement.

Second, take a look at this tidbit from the press release from 2008 announcing that Republic would begin flying E170s for Midwest:

It [Midwest] also said that the airline services agreement with Republic would result in additional furloughs for Midwest pilots, flight attendants and maintenance staff until Midwest can operate the Embraer 170 fleet on its own FAA operating certificate. The airline said it expected this process, which includes training for its flight crews and maintenance staff, would take eight months to a year.

Unless I’m missing something completely obvious, yesterday’s press release did not have anything similar. So, what’s up here? Will Midwest pilots still be flying the E170s eventually, and will they ever fly the E190?

Third, take a look at this quote:

“The addition of the E190s will provide us new flexibility in terms of our route network and range, with the potential to once again fly nonstop to the West Coast from our Milwaukee hub,” said Timothy E. Hoeksema, Midwest Airlines chairman, president and chief executive officer.

The press release promises that it will announce what routes the aircraft will be flying “in the near future.” I’m looking forward to seeing what cities will get its service back. LA? Seattle? Who knows. The bad thing for Midwest is that AirTran has since started service to some major West Coast cities out of Milwaukee.

Fourth, the press release mentions that this move is “part of a comprehensive fleet plan.” According to this post on FlyerTalk, it is being rumored that the 717s might be eliminated for good. Such a move could certainly be possible. As reported earlier, Midwest used to have 25 717s, and 16 have since been returned to Boeing, who has leased 25 717s to Mexicana’s Click operation. The article does mention that it is possible that the other nine aircraft could come from Midwest. I think it’s certainly possible that the E190 can be a replacement for the 717 – just look at the capacity. In their current configuration, the 717s seat 99 passengers, and the E190s will seat 100. It will be interesting to see if more E190s are on the way.

Finally, what does this mean for Midwest as an airline? Let’s say that the 717s do go away. If the E170s aren’t operated by Midwest in the future, then the airline essentially becomes only a brand, as all of its flying will be done by Republic (E170/E190) and SkyWest (CRJ-200).

I wouldn’t be surprised if ALPA’s website www.dontoutsourcemidwest.com gets an update soon.

Anyway, now that I have that out of my system, it’s really time to leave!