Atlantic Coast Airlines (ACA) has seen its United Express designation terminated, clearing the way for the regional to set up its own low-cost operations under a new banner, Independence Air, writes David Field.
The Independence business plan - low fares throughout the eastern USA, initially using 50-seat Bombardier CRJs and later Airbus A320 family aircraft - has drawn widespread attention and some scepticism, but the company is confident that the discount plan will work in the bargain-hungry eastern part of the nation. Standard & Poor's analyst Betsy Snyder calls the Independence plan risky, but will not rule out the possibility of success.
The airline takes delivery of the first of 25 A319/A320s in September to add services to Florida, the US midwest and West Coast. Publicly traded ACA will retire its remaining BAE Systems J41 turboprops by mid-year as part of the transition.
The ending of the United Airlines feeder contract "clears a significant hurdle in the ongoing transition of ACA from a fee-per-departure carrier to a new identity", says the airline. "The Independence Air operation at Washington Dulles will be the largest low-fare hub in America." It will, however, face low-fares competition from Southwest Airlines' major operation at Baltimore/Washington, about 70km (45 miles) away.
For United, the termination of the ACA relationship is another step towards emerging from bankruptcy court reorganisation later this year. United has also lined up new partners at Dulles to provide feed. United has renegotiated its fee-per-departure pacts with other feeders at its other hubs, lowering its costs. It was United's demands for lower costs that led ACA to rebel and form its Independence concept.
Source: Flight International
