Business History Books » Business Plans » Love Field mini-update
Love Field mini-update
Question:
> Finally! Some news that actually makes sense. Now AA > can use those > "unacceptable" ground level gates….
Ten bucks says Legend used their "proposal" to AA to get the Delta deal signed faster. I think that Delta Connection carrier Comair is still going to use those ground level gates, though. Space at Love Field is steadily getting rather limited now with this announcement. I bet AA is running back to the Dallas City Council saying, "Wait! We take it back! We don’t want you to defer the east concourse vote until August! Vote now so we can use our ‘office space’ by July 1!" 
* Sent from AltaVista http://www.altavista.com Where you can also find related Web Pages, Images, Audios, Videos, News, and Shopping. Smart is Beautiful
Response:
>DALLAS and FORT WORTH, Texas, June 26 /PRNewswire/ — Delta >Connection carrier Atlantic Southeast Airlines (ASA), a wholly >owned subsidiary of Delta Air Lines (NYSE: DAL – news), will >inaugurate regional jet service to Atlanta July 1, 2000 from new >gate facilities at the Legend Executive Terminal instead of the >main terminal at Love Field.
Finally! Some news that actually makes sense. Now AA can use those "unacceptable" ground level gates….
Response:
Check out this link. Look’s like you’re right. http://biz.yahoo.com/prnews/000626/ga_delta_c.html Delta Connection to Operate From Executive Terminal At Love Field Beginning July 1, 2000 DALLAS and FORT WORTH, Texas, June 26 /PRNewswire/ — Delta Connection carrier Atlantic Southeast Airlines (ASA), a wholly owned subsidiary of Delta Air Lines (NYSE: DAL – news), will inaugurate regional jet service to Atlanta July 1, 2000 from new gate facilities at the Legend Executive Terminal instead of the main terminal at Love Field. ASA previously was scheduled to operate 50-passenger Canadair regional jets from Gates 21 and 22 at the main terminal, under a short-term contract with the Department of Aviation. The new location is at the corner of Lemmon Avenue and Lover’s Lane, where Legend Airlines has built a new terminal with convenient customer parking. ASA will operate from Gate 6 at the Legend Executive Terminal. Customers who have booked travel on ASA will be contacted about the change in gate locations. “The City of Dallas Department of Aviation was very cooperative in offering gate space in the main terminal, but additional negotiations with Legend Airlines gave us the opportunity for more suitable facilities in the Legend Executive Terminal,” said Mark A. P. Drusch, Delta’s senior vice president – network management. “We appreciate the cooperation and consideration extended by the Department of Aviation, even though we have selected a different gate location for our Delta Connection service.” “As we launch Delta Connection service from Love Field with six daily ASA flights to and from Atlanta, we believe our customers will appreciate the convenient location in the Legend Executive Terminal,” said David Siebenburgen, president and CEO of Delta Connection, Inc. Amenities at the Legend Executive Terminal include: * The closest parking garage of any major airport in the mainland U.S. – only 40 feet from the terminal. * Private work environments with Internet access * Full-service business center includes modem connections, telephones and the latest business news * Roomy, club-like seating throughout the terminal Delta Connection, Inc., a wholly owned subsidiary of Delta Air Lines, manages the Delta Connection carrier program. Delta Connection carriers include wholly owned subsidiaries ASA and Comair, and additional regional carriers Atlantic Coast Jet, SkyWest and Trans States. With 148 regional jets in service today, Delta Connection carriers operate the largest fleet of regional jets in the world. SOURCE: Delta Air Lines, Inc. Got questions? Get answers over the phone at Keen.com. Up to 100 minutes free! http://www.keen.com
Response:
> Here’s the math, based on 10,985 pax during the month > of May. > 10,985/31 = 354 pax/day on average > Legend has 18 daily flights (4 each way DAL-LAX; 4 > each way DAL-IAD; 1 each > way DAL-LAS). > 354/18 = just under 20 > 20/56 = 35.7% > 20/50 = 40% > How do you come up with 50%?
The article stated that Legend had on average 24 pax per flight and you’re only dividing by 20. If Legend was forthcoming with the reporter about the total number of flights for May, then she got her numbers right. I checked Legend’s schedule and they offer fewer flights on the weekends, so you can’t assume that Legend flies 18 flights per day every day in a month. If Legend is only allowed to fly with 50 seats, then with an average of 24 flying per flight, you’re looking at being one pax short of half-full (i.e. 50%). * Sent from AltaVista http://www.altavista.com Where you can also find related Web Pages, Images, Audios, Videos, News, and Shopping. Smart is Beautiful
Response:
Sheryl asked: >What is the source of your statement that >Legend is allowed to operate with only 50 >seats?
I believe this is the article that he was referring to. From the Dallas American leads Legend slightly in passengers 06/13/2000 http://dallasnews.com/business/95400_amrlegend_13bu.html Note the statement: "During the month, Legend operated 65 fewer flights than American, and the lease on its terminal prohibited it from selling more than 50 seats." I’m wondering if AA would have also been limited to 50 seats per flight if it had agreed to Legend’s offer. If so, that may be another reason that AA declined the offer. Mike
Response:
>Note the statement: "During the month, Legend operated 65 fewer flights >than American, and the lease on its terminal prohibited it from selling >more than 50 seats."
This is even more bizzare! The same people that own the airline own the terminal. Why would they restrcit themselves to 50 seats?
Response:
Thanks Mike. If you have any source of loads for a 30 day period since Legend has been offering the full schedule it currently offers, I would be most interested in that percentage as well.
– Hide quoted text — Show quoted text -> Sheryl asked: >What is the source of your statement that >Legend is allowed to operate with only 50 >seats? > I believe this is the article that he was referring to. From the Dallas > American leads Legend slightly > in passengers > 06/13/2000 > http://dallasnews.com/business/95400_amrlegend_13bu.html > Note the statement: "During the month, Legend operated 65 fewer flights > than American, and the lease on its terminal prohibited it from selling > more than 50 seats." > I’m wondering if AA would have also been limited to 50 seats per flight > if it had agreed to Legend’s offer. If so, that may be another reason > that AA declined the offer. > Mike
Response:
068.remarq.com>, travelnut > I live in Dallas and have been following this topic rather > closely. I think that Legend was only using this gate offer > as a way to smoke out American’s true
intentions about what – Hide quoted text — Show quoted text -> they want to do with the East Concourse (hey, I’m > into "read between the lines" stuff). AA backed off the > City Council, didn’t they, when this new option came up? > Now the City’s going to wait on it. Think about it, do you > think Legend really thought that AA would accept the deal? > Even if they did, AA’s pax would be walking through > LEGEND’s terminal and seeing LEGEND’s amenities with > LEGEND’s own private parking instead of the usual mess at > Love Field. No wonder AA said "no" to the deal…they’d > lose pax to Legend after they saw what they weren’t getting > elsewhere. > I think Sheryl is misinformed on load factor. The Dallas > Morning News more than a week ago stated that Legend flew > 10,985 pax in May while AA flew 14,114. AA also had 65 more > flights a month than Legend, plus Legend is only allowed to > operate with 50 seats (lease) while AA had 56 to sell. You > do the math, it’s at about 50% load factor for Legend, > which is pretty good for a new airline that’s only been > flying for two months (especially against AA). The article > said that AA only had on average 3 more pax per flight than > Legend. AND AA stated that they continued to contact DFW > pax to convince them to fly out of Love instead. I wouldn’t > really calling that kicking butt. (I’ll try to find the > article and post if I can still get the link, all I have is > hard copy right now). > I checked out Legend’s website as well, and noticed some of > the same older items. I called their HQ and tried to talk > to someone in MIS, but the receptionist told me noone was > available, but that she heard they were planning to upgrade > their site in the near future — don’t know how near, > though. > OK, that’s my two-cents (or two dollars worth)… > * Sent from AltaVista http://www.altavista.com
Where you can also find related Web Pages, Images, Audios, Videos, News, and Shopping. Smart is Beautiful It is sad to me the tactics America is using to try to put Legend out of business. I was on a DFW to LAX flight and AA called and asked me to fly out of their prieum service from Love. They even paid for taxis between love and DFW both ways. They are sure going to extremes to make thier load factors look good. Can anyone stop AA? Before you buy.
Response:
>Why shouldn’t Legend sell some of its >excess capacity to its competitor and >reduce its own fixed overhead? I consider >this a very logical real-estate deal. Not to >mention, it frees up additional capital that >Legend can use to invest in new aircraft >and expand its routes.
I can understand Legend wanting to lease some of their gates for additional capital, but why didn’t they offer that space to ASA/Delta Express when they announced they would begin flights at ATL next month? When Legend’s service was delayed from the end of February until April, wasn’t it Delta that picked up the slack? Doesn’t Legend code share with Delta? I know their FF miles are interchangeable. One of the articles posted said that Legend had 6 gates and was expecting to have 5 in use by the end of the year. That still leaves 1 gate. ASA is only operating 6 roundtrips a day between DAL-ATL. That could easily be done out of one gate. FWIW, I have seen a rumor that Comair might also inagurate service to CVG from DAL but that hasn’t been officially announced and I don’t know how many flights would be planned. For another thing, if Legend has this stipulation in it’s lease that jets departing their terminal can only carry a maxumum of 50 passengers (instead of 56) then it wouldn’t matter to ASA. The jets they will be using only hold 50 as it is. Ditto for CoEX. I would think this restriction "would" matter to AA ( and "should" matter to Legend, as well.) If the terminal has suddenly become more valuable to the investors than the airline, why not rent the excess space to ASA/ Delta and CoEX? Then figure out a way to install two more jet bridges, so that by the time Legend needs 5 gates, there would still be three available for the other two carriers. That would free up all three jet bridges in the area that AA is now sharng with CoEX and AA could use those in the interim. Dallas wouldn’t have to make a decision to re-open the rest of the East Concourse, which no doubt would set off a new round of lawsuits. The four ground-level gates would still be available for any new commuter carriers who wish to serve DAL. Dallas could get on with the master plan for Love Field. Legend would still have the advantage of having the better terminal and AA would have the advantage of being able to fly 56 pax out of DAL as opposed to Legend’s 50 and eveyone would (theoretically) be happy. Mike
Response:
- Hide quoted text — Show quoted text ->Ah…but is it really that "Inconceivable"? From a business perspective, >it’s >not that strange. In fact, it’s very much akin to code-sharing. AA will >operate out of Love Field one way or another. Currently, it’s leasing space >from Continental Express, which it really doesn’t compete with. Legend, >OTOH, >has this brand-new, expensive terminal with excess capacity. Why shouldn’t >Legend sell some of its excess capacity to its competitor and reduce its own >fixed overhead? I consider this a very logical real-estate deal. Not to >mention, it frees up additional capital that Legend can use to invest in new >aircraft and expand its routes. >It may be a logical real estate deal, but it’s nuts from a competitve >standpoint. (Code sharing only works when the airlines in question have >minimal >overlap.) While leasing gates certainly does help Legend with overhead and >cashflow, consider this: >Legend has three perceived advantages in the market: >1) More legroom. (AA matched this.) >2) Lower walkup fares. (AA matched this.) >3) A better location than DFW for business travellers. Better parking, less >walking. >Whoops! The only AAdvantage that American can’t match is the Legend terminal. >Now Legend gives that away and American plays it’s trump card: Those AA >frequent >flyer miles. >Legend loses very quickly. >The only thing I can figure out is that Legend’s investors have looked at >Legend’s books and seen that the long term viability of Legend is out the >window. Now, they just want to recover some of their investment in the >terminal >facility.
As I said in a response to Sheryl, Legend obviously sees the writing on the wall. AA is not leaving Love. They still have the option of the crappie gates that Love’s already offered them. And as you said, AA has already matched them in every other respect. Legend’s terminal is a competitive advantage, but hardly one that will steal a sizable amount of market share away from AA. Therefore, what does Legend have left? They have an opportunity to considerably reduce their fixed overhead and redistribute the saving into improving the quality of their REAL product (providing passengers a premium in-flight experience) in hopes of creating a distinction between themselves and their competition. Or, they can succumb to the competitive pressure that the vast majority of airline startups face, and close their doors. –Tom To e-mail me, remove no-junk from address.
Response:
>As I said in a response to Sheryl, Legend obviously sees the writing on the >wall. AA is not leaving Love. They still have the option of the crappie gates >that Love’s already offered them.
I don’t think so. Dallas offered AA the 4 ground level gates in the North Concourse. AA turned them down and Comair (Delta) took them. So AA hasn’t a lot of choices. Continental has them on a month to month lease where they are. (I thought Continental was going to start new CLE service in June. What happened to that?) AA can break their lease and try to start using their new East Concourse gates. At which time they will immediately be subject to a lawsuit from Dallas, Legend, and who knows who else? AA doesn’t have much else of a choice. The wildcard here is the City Council vote mentioned in the article. 5 members want a full up vote on whether or not to let AA use the East Concourse. How many members are there? How many are sympathetic to AA? (As an aside, has anyone looked at those 2 ground level gates on the east side of the North Concourse? Even if they pull down the fence and prevent the tower people from parking there, there’s not much room to bring in any planes.) >And as you said, AA has already matched them >in every other respect. Legend’s terminal is a competitive advantage, but >hardly one that will steal a sizable amount of market share away from AA. >Therefore, what does Legend have left? They have an opportunity to considerably >reduce their fixed overhead and redistribute the saving into improving the >quality of their REAL product (providing passengers a premium in-flight >experience) in hopes of creating a distinction between themselves and their >competition. Or, they can succumb to the competitive pressure that the vast >majority of airline startups face, and close their doors.
I hope you are right. I’d really like to see Legend succeed. What I sense is that the Legend investors have already given up on making Legend go. Especially if Sheryl is right about the load factors. Now they are looking for an exit strategy. If Legend tanks soon, that new terminal will be a white elephant. AA will quickly lose interest in using Love and no longer need the gate space. The Legend people will be stuck with a defunct airline and an empty building as it’s not likely that any other airline will want to go head to head with AA. OTOH, Suppose they sign a long term lease with AA first then let Legend shut down. Since the airline and terminal companies are separate, they let Legend go bankrupt and get a reasonable return on the terminal. AA gets stuck with paying rent on both the East Concourse AND the Legend gates. Neither of which they particularly want… You know, there hasn’t been a good soap opera like this since Dallas went off the air! I can just see JR pulling strings at AA and Cliff Barnes with his investors in Legend. Tune in next week….
Response:
The plot thickens. From the Fort Worth Star-Telegram in an article posted last night it appears that AA will not be sharing gates at Legend’s terminal after all. The offer was only good through December 31 and this was unacceptale to AA. AA has also asked the City of Dallas to to delay voting on whether or not to allow AA to use the 3 gates in the East Concourse. American seeks delay in Dallas vote 06/22/2000 http://www.startelegram.com/news/doc/1047/1:BIZ54/1:BIZ540622100.html This seems odd. Wasn’t it AA who got the petition together in the first place to get the City of Dallas to vote quickly on the matter? From the article, I got the impression that AA doesn’t think they have enough support in the city council for the vote to pass, so I think they are just buying time. As long as CoEX contines to share gates, AA can manage it’s current schedule. Most of AAs flights operate out of the recently installed third jet bridge. The remaining few AA flights use the CoEX jet-bridges between CoEx’s flights to CLE & IAH. However, with the added service to LGA planned by AA at the end of August, space might then become a problem. I think AA is hoping by August that: A) Legend will be history or B) They will have more support on the Dallas City Council and hopefully be allowed to use the space in the East Concourse. All IMHO, of course. Mike
Response:
I live in Dallas and have been following this topic rather closely. I think that Legend was only using this gate offer as a way to smoke out American’s true intentions about what they want to do with the East Concourse (hey, I’m into "read between the lines" stuff). AA backed off the City Council, didn’t they, when this new option came up? Now the City’s going to wait on it. Think about it, do you think Legend really thought that AA would accept the deal? Even if they did, AA’s pax would be walking through LEGEND’s terminal and seeing LEGEND’s amenities with LEGEND’s own private parking instead of the usual mess at Love Field. No wonder AA said "no" to the deal…they’d lose pax to Legend after they saw what they weren’t getting elsewhere. I think Sheryl is misinformed on load factor. The Dallas Morning News more than a week ago stated that Legend flew 10,985 pax in May while AA flew 14,114. AA also had 65 more flights a month than Legend, plus Legend is only allowed to operate with 50 seats (lease) while AA had 56 to sell. You do the math, it’s at about 50% load factor for Legend, which is pretty good for a new airline that’s only been flying for two months (especially against AA). The article said that AA only had on average 3 more pax per flight than Legend. AND AA stated that they continued to contact DFW pax to convince them to fly out of Love instead. I wouldn’t really calling that kicking butt. (I’ll try to find the article and post if I can still get the link, all I have is hard copy right now). I checked out Legend’s website as well, and noticed some of the same older items. I called their HQ and tried to talk to someone in MIS, but the receptionist told me noone was available, but that she heard they were planning to upgrade their site in the near future — don’t know how near, though. OK, that’s my two-cents (or two dollars worth)… * Sent from AltaVista http://www.altavista.com Where you can also find related Web Pages, Images, Audios, Videos, News, and Shopping. Smart is Beautiful
Response:
What is the source of your statement that Legend is allowed to operate with only 50 seats? Their website says their planes are configured with 56 seats. http://www.legendairlines.com/LegendaryService/SafetyAndComfort.html and http://www.legendairlines.com/LegendaryService/LegendClass.html and I’ve never before heard 50 mentioned. Here’s the math, based on 10,985 pax during the month of May. 10,985/31 = 354 pax/day on average Legend has 18 daily flights (4 each way DAL-LAX; 4 each way DAL-IAD; 1 each way DAL-LAS). 354/18 = just under 20 20/56 = 35.7% 20/50 = 40% How do you come up with 50%? And their employee/pax ratio would be significantly higher than an airline using equipment with twice the number of seats. I realize they do not have their own employees outside of DAL (or possibly only a very limited number), but still, their cost/pax is significantly higher than what is typical in the airline industry.
– Hide quoted text — Show quoted text -> I live in Dallas and have been following this topic rather > closely. I think that Legend was only using this gate offer > as a way to smoke out American’s true intentions about what > they want to do with the East Concourse (hey, I’m > into "read between the lines" stuff). AA backed off the > City Council, didn’t they, when this new option came up? > Now the City’s going to wait on it. Think about it, do you > think Legend really thought that AA would accept the deal? > Even if they did, AA’s pax would be walking through > LEGEND’s terminal and seeing LEGEND’s amenities with > LEGEND’s own private parking instead of the usual mess at > Love Field. No wonder AA said "no" to the deal…they’d > lose pax to Legend after they saw what they weren’t getting > elsewhere. > I think Sheryl is misinformed on load factor. The Dallas > Morning News more than a week ago stated that Legend flew > 10,985 pax in May while AA flew 14,114. AA also had 65 more > flights a month than Legend, plus Legend is only allowed to > operate with 50 seats (lease) while AA had 56 to sell. You > do the math, it’s at about 50% load factor for Legend, > which is pretty good for a new airline that’s only been > flying for two months (especially against AA). The article > said that AA only had on average 3 more pax per flight than > Legend. AND AA stated that they continued to contact DFW > pax to convince them to fly out of Love instead. I wouldn’t > really calling that kicking butt. (I’ll try to find the > article and post if I can still get the link, all I have is > hard copy right now). > I checked out Legend’s website as well, and noticed some of > the same older items. I called their HQ and tried to talk > to someone in MIS, but the receptionist told me noone was > available, but that she heard they were planning to upgrade > their site in the near future — don’t know how near, > though. > OK, that’s my two-cents (or two dollars worth)… > * Sent from AltaVista http://www.altavista.com Where you can also find
related Web Pages, Images, Audios, Videos, News, and Shopping. Smart is Beautiful
Response:
– Hide quoted text — Show quoted text ->> >>And finally, this surprising article was in the Dallas Morning News >> >>today: >> >>American in talks to lease >> >>Legend gates >> >>06/22/2000 >> >>http://dallasnews.com/business/100000_legend_22bus.A.html >> >>This whole thing seems odd to me and I just can’t see this as being good >> >>for Legend. >> >This is truly bizarre… A investment company that has a major stake in >> >Legend >> >owns the new terminal, and gets Legend’s permission to lease gates in >what is >> >one of their only means of differentiating themselves from AA. >> >Unbelievable! (or, as one of my favorite movies would have it: >> >Inconceivable!) >> Ah…but is it really that "Inconceivable"? From a business perspective, >it’s >> not that strange. In fact, it’s very much akin to code-sharing. AA will >> operate out of Love Field one way or another. Currently, it’s leasing >space >> from Continental Express, which it really doesn’t compete with. Legend, >OTOH, >> has this brand-new, expensive terminal with excess capacity. Why shouldn’t >> Legend sell some of its excess capacity to its competitor and reduce its >own >> fixed overhead? I consider this a very logical real-estate deal. Not to >> mention, it frees up additional capital that Legend can use to invest in >new >> aircraft and expand its routes. >> –Tom >Different strokes for different folks, I guess. To me, it’s about as poor a >business decision as possible. It guarantees that AA *will* be able to >compete with Legend, which AA currently does not have on a long-term basis. >Clearly, Legend will not make it, with their 25%-35% loads which, IMO, have >no chance of increasing with AA offering competing service from the same >airport. Legend’s only chance at survival is if AA is in some way forced to >leave DAL. >It may be a logical "real estate deal." It’s a death notice for a startup >airline trying to gain entry into markets controlled by AA. These investors >clearly have a conflict of interest and they obviously consider the long >term viability of their real estate deal of greater importance than the long >term viability of the airline. And sure, the story says Legend approved >this. But what it doesn’t say is what percentage of that vote comes from >the investors. >As an aside, I perused through Legend’s website last night. VERY >disappointing. I read on another board that Legend is currently offering >web specials. In fact, they are, if you happen to choose a flight where one >is available. However, there was absolutely no mention anywhere on the >website that there is such a special in effect!! So there is no way for the >customer to know that if they choose a different flight on the same day or >even a different day if their plans are flexible, they could save hundreds >of dollars. Their FAQ page was written before the airline began service and >hasn’t been updated since. It clearly contains things that shouldn’t even >be on their website at this point (ex. jack screw inspections). If Legend’s >website is any indication of their having their act together, this airline’s >days are numbered. > The fact you seem to miss is that the Love Field has already offered AA gate > space, but of a much lower quality than AA would like to accept. Therefore, AA > already has a fallback position and *will* operate out of Love — one way or > another. Legend, OTOH, seems to have realized this undeniable fact and is > considering its options
Last I read, AA said the space they had been offered was unusable for their needs. In fact, they have spent millions on different space that they are not allowed to use for flight operations. Do you have more current information?
Response:
- Hide quoted text — Show quoted text -> >>And finally, this surprising article was in the Dallas Morning News > >>today: > >>American in talks to lease > >>Legend gates > >>06/22/2000 > >>http://dallasnews.com/business/100000_legend_22bus.A.html > >>This whole thing seems odd to me and I just can’t see this as being good > >>for Legend. > >This is truly bizarre… A investment company that has a major stake in > >Legend > >owns the new terminal, and gets Legend’s permission to lease gates in >what is > >one of their only means of differentiating themselves from AA. > >Unbelievable! (or, as one of my favorite movies would have it: > >Inconceivable!) > Ah…but is it really that "Inconceivable"? From a business perspective, >it’s > not that strange. In fact, it’s very much akin to code-sharing. AA will > operate out of Love Field one way or another. Currently, it’s leasing >space > from Continental Express, which it really doesn’t compete with. Legend, >OTOH, > has this brand-new, expensive terminal with excess capacity. Why shouldn’t > Legend sell some of its excess capacity to its competitor and reduce its >own > fixed overhead? I consider this a very logical real-estate deal. Not to > mention, it frees up additional capital that Legend can use to invest in >new > aircraft and expand its routes. > –Tom >Different strokes for different folks, I guess. To me, it’s about as poor a >business decision as possible. It guarantees that AA *will* be able to >compete with Legend, which AA currently does not have on a long-term basis. >Clearly, Legend will not make it, with their 25%-35% loads which, IMO, have >no chance of increasing with AA offering competing service from the same >airport. Legend’s only chance at survival is if AA is in some way forced to >leave DAL. >It may be a logical "real estate deal." It’s a death notice for a startup >airline trying to gain entry into markets controlled by AA. These investors >clearly have a conflict of interest and they obviously consider the long >term viability of their real estate deal of greater importance than the long >term viability of the airline. And sure, the story says Legend approved >this. But what it doesn’t say is what percentage of that vote comes from >the investors. >As an aside, I perused through Legend’s website last night. VERY >disappointing. I read on another board that Legend is currently offering >web specials. In fact, they are, if you happen to choose a flight where one >is available. However, there was absolutely no mention anywhere on the >website that there is such a special in effect!! So there is no way for the >customer to know that if they choose a different flight on the same day or >even a different day if their plans are flexible, they could save hundreds >of dollars. Their FAQ page was written before the airline began service and >hasn’t been updated since. It clearly contains things that shouldn’t even >be on their website at this point (ex. jack screw inspections). If Legend’s >website is any indication of their having their act together, this airline’s >days are numbered.
The fact you seem to miss is that the Love Field has already offered AA gate space, but of a much lower quality than AA would like to accept. Therefore, AA already has a fallback position and *will* operate out of Love — one way or another. Legend, OTOH, seems to have realized this undeniable fact and is considering its options If, as you say, Legend is currently unable to fill its planes, it may never be able to. But that doesn’t alter the fact that Legend has high quality excess gate capacity that it can sell at a premium to AA, thus, lowering its own fixed costs, which may ultimately improve Legend’s chances of surviving against AA. On that note, only time will tell! –Tom To e-mail me, remove no-junk from address.
Response:
– Hide quoted text — Show quoted text ->>And finally, this surprising article was in the Dallas Morning News >>today: >>American in talks to lease >>Legend gates >>06/22/2000 >>http://dallasnews.com/business/100000_legend_22bus.A.html >>This whole thing seems odd to me and I just can’t see this as being good >>for Legend. >This is truly bizarre… A investment company that has a major stake in >Legend >owns the new terminal, and gets Legend’s permission to lease gates in what is >one of their only means of differentiating themselves from AA. >Unbelievable! (or, as one of my favorite movies would have it: >Inconceivable!) > Ah…but is it really that "Inconceivable"? From a business perspective, it’s > not that strange. In fact, it’s very much akin to code-sharing. AA will > operate out of Love Field one way or another. Currently, it’s leasing space > from Continental Express, which it really doesn’t compete with. Legend, OTOH, > has this brand-new, expensive terminal with excess capacity. Why shouldn’t > Legend sell some of its excess capacity to its competitor and reduce its own > fixed overhead? I consider this a very logical real-estate deal. Not to > mention, it frees up additional capital that Legend can use to invest in new > aircraft and expand its routes. > –Tom
Different strokes for different folks, I guess. To me, it’s about as poor a business decision as possible. It guarantees that AA *will* be able to compete with Legend, which AA currently does not have on a long-term basis. Clearly, Legend will not make it, with their 25%-35% loads which, IMO, have no chance of increasing with AA offering competing service from the same airport. Legend’s only chance at survival is if AA is in some way forced to leave DAL. It may be a logical "real estate deal." It’s a death notice for a startup airline trying to gain entry into markets controlled by AA. These investors clearly have a conflict of interest and they obviously consider the long term viability of their real estate deal of greater importance than the long term viability of the airline. And sure, the story says Legend approved this. But what it doesn’t say is what percentage of that vote comes from the investors. As an aside, I perused through Legend’s website last night. VERY disappointing. I read on another board that Legend is currently offering web specials. In fact, they are, if you happen to choose a flight where one is available. However, there was absolutely no mention anywhere on the website that there is such a special in effect!! So there is no way for the customer to know that if they choose a different flight on the same day or even a different day if their plans are flexible, they could save hundreds of dollars. Their FAQ page was written before the airline began service and hasn’t been updated since. It clearly contains things that shouldn’t even be on their website at this point (ex. jack screw inspections). If Legend’s website is any indication of their having their act together, this airline’s days are numbered.
Response:
- Hide quoted text — Show quoted text ->And finally, this surprising article was in the Dallas Morning News >today: >American in talks to lease >Legend gates >06/22/2000 >http://dallasnews.com/business/100000_legend_22bus.A.html >This whole thing seems odd to me and I just can’t see this as being good >for Legend. >This is truly bizarre… A investment company that has a major stake in >Legend >owns the new terminal, and gets Legend’s permission to lease gates in what is >one of their only means of differentiating themselves from AA. >Unbelievable! (or, as one of my favorite movies would have it: >Inconceivable!)
Ah…but is it really that "Inconceivable"? From a business perspective, it’s not that strange. In fact, it’s very much akin to code-sharing. AA will operate out of Love Field one way or another. Currently, it’s leasing space from Continental Express, which it really doesn’t compete with. Legend, OTOH, has this brand-new, expensive terminal with excess capacity. Why shouldn’t Legend sell some of its excess capacity to its competitor and reduce its own fixed overhead? I consider this a very logical real-estate deal. Not to mention, it frees up additional capital that Legend can use to invest in new aircraft and expand its routes. –Tom To e-mail me, remove no-junk from address.
Response:
Thanks for the great update, Mike.
– Hide quoted text — Show quoted text -> Just returned to AUS from DAL yesterday and thought I would post a few > photos I took a couple of months ago that I finally had time to scan. > Here’s an exterior shot of the East Concourse, where AA has renovated > space and is asking the City of Dallas for permission to use: > http://www.geocities.com/charmsdad/images/airport/dal9.jpg > American’s ticket counter in the main lobby: > http://www.geocities.com/charmsdad/images/airport/dal3.jpg > Aerial view of lobby taken from the mezzanine at the Frontiers of Flight > Museum. Continental Express ticket counter is to the right of the plate > glass windows underneath the blue sign. The brown counters to the right > of that are for the Frontiers of Flight Museum. To the right of that is > the area where it appeared that ASA/Delta Express was building their > counter. > http://www.geocities.com/charmsdad/images/airport/dal4.jpg > Different aerial view of main lobby showing AA’s counter to the left of > the plate glass windows: > http://www.geocities.com/charmsdad/images/airport/dal6.jpg > Entrance to all three concourses. > http://www.geocities.com/charmsdad/images/airport/dal5.jpg > Southwest is in West Concourse to the left, ASA/Delta’s Gates are being > renovated in the North Concourse straight ahead just over the "hump" and > CoEX and AA are in the first section of the East oncourse to the right. > AA recently added a third jetway to the west of the original two it was > sharing with CoEX. > I had just a minute to run over to Gates 21 and 22 on the North > Concourse. The office that had been on the west side of he North > Concourse had been completely gutted and was in the "paint and drywall" > state. The vacant gate on the other side had had the old carpet ripped > up and also looked to be in the "paint and drywall" stage. Looks like a > lot of work to be done before July 1, when ASA begins flights to ATL. > And finally, this surprising article was in the Dallas Morning News > today: > American in talks to lease > Legend gates > 06/22/2000 > http://dallasnews.com/business/100000_legend_22bus.A.html > This whole thing seems odd to me and I just can’t see this as being good > for Legend. > Mike
Response:
>And finally, this surprising article was in the Dallas Morning News >today: >American in talks to lease >Legend gates >06/22/2000 >http://dallasnews.com/business/100000_legend_22bus.A.html >This whole thing seems odd to me and I just can’t see this as being good >for Legend.
This is truly bizarre… A investment company that has a major stake in Legend owns the new terminal, and gets Legend’s permission to lease gates in what is one of their only means of differentiating themselves from AA. Unbelievable! (or, as one of my favorite movies would have it: Inconceivable!)
Response:
>Ah…but is it really that "Inconceivable"? From a business perspective, it’s >not that strange. In fact, it’s very much akin to code-sharing. AA will >operate out of Love Field one way or another. Currently, it’s leasing space >from Continental Express, which it really doesn’t compete with. Legend, OTOH, >has this brand-new, expensive terminal with excess capacity. Why shouldn’t >Legend sell some of its excess capacity to its competitor and reduce its own >fixed overhead? I consider this a very logical real-estate deal. Not to >mention, it frees up additional capital that Legend can use to invest in new >aircraft and expand its routes.
It may be a logical real estate deal, but it’s nuts from a competitve standpoint. (Code sharing only works when the airlines in question have minimal overlap.) While leasing gates certainly does help Legend with overhead and cashflow, consider this: Legend has three perceived advantages in the market: 1) More legroom. (AA matched this.) 2) Lower walkup fares. (AA matched this.) 3) A better location than DFW for business travellers. Better parking, less walking. Whoops! The only AAdvantage that American can’t match is the Legend terminal. Now Legend gives that away and American plays it’s trump card: Those AA frequent flyer miles. Legend loses very quickly. The only thing I can figure out is that Legend’s investors have looked at Legend’s books and seen that the long term viability of Legend is out the window. Now, they just want to recover some of their investment in the terminal facility.
Response:
Just returned to AUS from DAL yesterday and thought I would post a few photos I took a couple of months ago that I finally had time to scan. Here’s an exterior shot of the East Concourse, where AA has renovated space and is asking the City of Dallas for permission to use: http://www.geocities.com/charmsdad/images/airport/dal9.jpg American’s ticket counter in the main lobby: http://www.geocities.com/charmsdad/images/airport/dal3.jpg Aerial view of lobby taken from the mezzanine at the Frontiers of Flight Museum. Continental Express ticket counter is to the right of the plate glass windows underneath the blue sign. The brown counters to the right of that are for the Frontiers of Flight Museum. To the right of that is the area where it appeared that ASA/Delta Express was building their counter. http://www.geocities.com/charmsdad/images/airport/dal4.jpg Different aerial view of main lobby showing AA’s counter to the left of the plate glass windows: http://www.geocities.com/charmsdad/images/airport/dal6.jpg Entrance to all three concourses. http://www.geocities.com/charmsdad/images/airport/dal5.jpg Southwest is in West Concourse to the left, ASA/Delta’s Gates are being renovated in the North Concourse straight ahead just over the "hump" and CoEX and AA are in the first section of the East oncourse to the right. AA recently added a third jetway to the west of the original two it was sharing with CoEX. I had just a minute to run over to Gates 21 and 22 on the North Concourse. The office that had been on the west side of he North Concourse had been completely gutted and was in the "paint and drywall" state. The vacant gate on the other side had had the old carpet ripped up and also looked to be in the "paint and drywall" stage. Looks like a lot of work to be done before July 1, when ASA begins flights to ATL. And finally, this surprising article was in the Dallas Morning News today: American in talks to lease Legend gates 06/22/2000 http://dallasnews.com/business/100000_legend_22bus.A.html This whole thing seems odd to me and I just can’t see this as being good for Legend. Mike