Freedom Air

STEVE CANYON

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Freedom Airlines Assumes A Role For Growing Mesa


By Jim Ott/Special to AviationNow.com

01-May-2002 4:58 PM U.S. EDT



Mesa Airlines will continue to work toward the establishment of Freedom Airlines, a new, probable non-union subsidiary that will serve America West as a Bombardier CRJ 700/900 operator even though the rationale for founding it may no longer be legally required.


Mesa chairman and CEO Jonathan Ornstein made Freedom's future clear Wednesday as he released first-quarter operating earnings of $8.7 million, a strong showing in a weak revenue environment especially when compared to the $17 million loss in the quarter last year.


The Freedom subsidiary is scheduled to be in place in the third quarter when the 70-and 90-seat CRJs are scheduled for delivery. Having a separate certificated air carrier will offer "options and flexibility," and the opportunity to isolate types of aircraft in a particular fleet, Ornstein said.


Freedom is also likely to be a non-union operation at least as it starts up at the Mesa hub in Phoenix, providing the opportunity for a low-cost structure. Its fleet will comprise some or all of the 40 CRJ 700/900 aircraft, evenly divided by type, that Mesa has on order.


A strike under way at Canada's Bombardier may delay the CRJ deliveries by "weeks rather than months," but the delay is alleviating pressures on growing Mesa and may be beneficial in the long run, Ornstein said.


Freedom's separate certification is being pursued though it may no longer be necessary, the executive said. Pilots at US Airways have ratified an agreement with US Airways clearing the way for Mesa, a code-sharing partner of US Airways, to operate aircraft beyond a 69-seat level. The restriction that befell Mesa, in the scope clause of the agreement, has been part of the US Airways' Air Line Pilots Association contract since US Airways operated Fokker F28s.


The restriction had prompted Mesa's original propose to establish Freedom Air under a separate certificate.


Ornstein said he anticipates growth of 35-40% for the Mesa operations over the next year. That growth is expected from a stronger affiliation with US Airways, continued affiliation with Frontier, America West and Midwest Express and additional Essential Air Services routes. Officials of Mesa and United Airlines are exploring options that stemmed from United's attraction to Mesa's low-cost structure, Ornstein said. In the first quarter, Mesa's cost per available seat mile was 13.3 cents, down 7.7% from last year. Its revenue per available seat mile was 14.3 cents, off 7.7%.


Mesa also operates CC Air, a Carolina-based regional carrier that shrunk by 20% of its former size as it tumbled all last year toward insolvency. Now that CC Air's pilots have ratified a five-year agreement, CC Air is likely to play a strong role in providing regional jet service to US Airways, Ornstein said. He said the former turboprop pilots at CC Air will be given the opportunity to upgrade to the regional jet and improved wages.


Net income for Mesa's quarter was $5.9 million on revenues of $230.8 million. Mesa reported a net gain of more than $1 million from investments of marketable securities, which compared to a $700,000 loss in that category in the quarter last year.


During the first quarter, Mesa added five regional jets and two more in April, increasing the fleet of small jets to 62. The carrier operates a total of 121 aircraft serving 150 cities with 879 daily departures.
 

HvyjetFO

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Now that CC Air's pilots have ratified a five-year agreement, CC Air is likely to play a strong role in providing regional jet service to US Airways, Ornstein said. He said the former turboprop pilots at CC Air will be given the opportunity to upgrade to the regional jet and improved wages.
Same old song and dance...you pilots take a pay cut and then we'll grow the airline and give you new shiny jets, quick upgrades, yada yada yada.

Don't fall for it gang. History will show that management will attempt to screw you time and time again, especially when you are a willing part of it.

Hvy
 
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