Large stakeholders in RJET
 

Among the largest stakeholders in Republic Holdings is Greenlight Capital, founded by former Milwaukeean David Einhorn, who is also a new minority owner of New York Mets.

http://www.streetinsider.com/holdings.php?q=RJET

Corsair Capital Partners is a fairly new investor of RJET.
http://www.streetinsider.com/13Gs/Co...9/6626315.html

Are their investments indicative of what they believe will be an upcoming financially-desirable event or transaction?

This may be part of their new source of liquidity.

It's even more interesting to look at who serves on the board of directors for Republic. Included are Richard P. Schifter, partner at TPG (TPG got a seat on the board as part of the Midwest sale) and two individuals who previously worked at Wexford capital. I bet these individuals have an extensive network that they could utilize in trying to find an equity partner or additional sources of financing.

It will be interesting to see who they decide to appoint as COO of Frontier per the pilots agreement.

I recall Rick Schifter and Hoeksema announcing the sale to TPG. TH was beaming from ear to ear. I wonder what his 20/20 hindsight is thinking now.

It's more important to look back and see if their position has increased or decreased before drawing any conclusion. Major investors normally can't buy or sell in large volumes at one time or they influence the market and their profit or loss. They have to sneak in and out.

Mr. Hoeksema is probably looking at what is transpiring and see's a very similar situation to what he experienced. There are many that feel Milwaukee has a very high growth potential. It does, but at a dollar figure that would probably be marginally profitable for any airline during the best of times. As many have said, Frontier's problem is that they are not able to garner a fare premium to the competition. Something has to give in MKE for them to be successful.

I don't think F9 necessarily needs a fare "premium" over other carriers to be profitable. As long as all carriers raise their fares, they can all be profitable.

It already seems to be happening, now that WN is in charge of FL. Many routes I'm looking at are a good $50-100 higher than a year ago.

Is it enough to be profitable and offset fuel costs? Perhaps on some routes...maybe not on others.

In my non-scientific observations, fares do seem to be starting to moderate. But these higher fares will eventually lead to fewer travelers at MKE.

WN is starting to make changes at MKE, with new MKE-STL and MKE-DEN nonstops commencing September 9. Checking on a random basis, fares are matching up on the routes between WN and FL. Those fares seem do be undercutting F9, even with the big fall sale in progress.

Were you primarily looking at MKE-STL and MKE-DEN? For those who might do spot checking like this, remember that both WN and FL display a fare which excludes some taxes and fees, while Frontier displays the full fee right upfront. For example, if you search MKE-DEN-MKE for 10/12 with 10/20 return, Southwest has a $99 fare, and Frontier is $108.20 one way and $109.70 returning. But when you price both of them out, the total fare is exactly the same at $217.89. Frontier is being more up-front with their pricing display, but unfortunately this can make them look more expensive at first glance.

Not sure if this explains what you're seeing, but in general Frontier might be punished for being more upfront with fees and taxes by appearing more expensive when they are not.

I know the DOT has issued a rule change on this that will make all airlines show the total cost at the start. Basically to address the type of situation you are discussing but the Airlines have filled for a delay in getting implemented from October to next spring sometime.

Yes, you are correct; thanks for pointing out. There is a difference, however, if you want two free checked bags and no fee for canceling/changing reservation. In that case, you need to compare to Classic pricing.

The thing about WN is that their lowest fares (WGA) have a range; at the upper end, for what they charge, you can usually book F9's Classic Plus. But at the low end, the fare is competitive, especially when including the free bags and no cancel fee policy.

Yeah, that's all very true and it makes it harder than every to really compare costs.

If I ran the world (ha ha) there would be a standard way that pricing had to be displayed on the website without having to click to subsequent screens

$217.90 Total Fare (must include all unavoidable fees and taxes)

$00.00 Carry-on bag fee
$20.00 First Checked Bag ($5 discount if purchased online)
$20.00 Second Checked Bag ($5 discount if purchased online)
$00.00 Advance seat assignment (or replace with "no assigned seating")

--Any fee which cannot be avoided must be listed in the base price. That includes things like booking fees and fuel surcharges, too.

--Any generally-customary service which can be avoided but is part of the typical experience should be itemized clearly but separately.

--Any less-common or added service can be listed separately and promoted however desired, but must be shown separately. Things like premium seat assignments, change fees, free drinks, standby, entertainment, etc can be promoted as you'd like, but none of those are necessary nor customary.


It's an interesting question to wonder how Southwest's different tactics benefit or harm their bottom line. Obviously they are generally the most consistantly profitable major carrier, but do their decisions on pricing, fees, and distribution (no GDS participation) enhance or curtail their level of profit? They could be consistantly profitable for various other reasons but might be more profitable with bag fees, or by listing on Orbitz/Travelocity/Expedia, etc. Or not. I don't think it's an easy question to answer accurately.

That's the nature of fare buckets. F9 uses them too but when they rise to only Classic Plus level they show the same price for all fare levels. But those that don't book Classic Plus are still charged bag fees? That doesn't seem right. It's actually just plain wrong.

To wit I looked at MKE-DEN today and all three fares were identical.

On WN in the same situation only the Business Select fare would appear with it's priority boarding and it's higher RR2 level.

I completely agree. I never understood why, at that point, Economy inventory is not just zeroed out.