Want to learn more about our marketing partnership with SkyWest Airlines? What it is, how will it work, why are we doing it, and how it affects you? Check out our Q&A on www.insideairtran.com
Since we announced our marketing partnership with regional carrier, SkyWest Airlines, we’ve received many questions from Crew Members. Below is a Q&A session Inside AirTran conducted with Kevin Healy, senior vice president of marketing and planning.
We will continue to update this Q&A and Inside AirTran with the latest information on this unique partnership with the world’s largest independently-owned regional airline.
Q: What exactly is this marketing partnership with SkyWest Airlines?
AirTran has partnered with SkyWest Airlines to specifically support our focus city in Milwaukee with new service to smaller markets that we would not otherwise serve; Des Moines, Iowa (DSM), Omaha, Neb. (OMA), and Akron/Canton, Ohio. (CAK) and expanded frequency to IND, PIT and STL.
This marketing partnership will also free up our aircraft for new AirTran service from MKE as well as other routes in our network – some of which we’ve already announced, some will be announced in the coming weeks – including a new destination in our network. I can’t talk about that yet, but as we announced yesterday, this marketing partnership will enable AirTran to add new nonstop service from MKE to DFW and expand our frequency to DCA this Spring with AirTran aircraft.
Q: Didn’t we try this with AirTran JetConnect? How is this different?
Great question. Our marketing partnership with SkyWest is uniquely different than what we had done with Air Wisconsin in a number of ways. First, this is a true partnership between two independent companies. Each airline provides the service under their own brand and assumes the economic risk for their own flying. Working together, we can generate revenue for each company that neither would get on their own. This new revenue will be shared on a pro-rated basis and we will work together to create cost efficiencies in operations. We will use the AirTran distribution systems to sell tickets.
While we will clearly differentiate the service provided by AirTran and SkyWest, both companies share a commitment to quality service, safety and providing great value to our customers.
Q: Is this type of partnership new to the airline industry?
We believe it is. This partnership will benefit both AirTran and SkyWest and each company’s Crew Members and customers through increased service and access to more passengers and revenue.
Q: Why did we enter into this partnership with SkyWest?
There are many reasons we believe this partnership makes sense for AirTran. One of the most important is that it allows us to continue to expand our MKE base. We simply cannot continue to grow in MKE unless we free up aircraft.
Partnering with SkyWest allows us to not only expand to new cities like DFW and add additional flights to DCA with AirTran jet service, it also give us access to smaller markets which would not otherwise be economically feasible to serve to like DSM, OMA and CAK from MKE. SkyWest customers from these cities will be able to access our network seamlessly from these markets to points all over our network.
Q: Why can’t we fly these routes ourselves?
In some cases, the cities are simply too small and without this partnership, we would not be able to add these markets to our network at all. At this point, our MKE focus city isn’t big enough to support the level of frequency in some of these markets that is necessary to compete effectively with Republic Airlines/Midwest. Our marketing partnership with SkyWest helps us build our MKE hub and creates the platform for future growth.
SkyWest will dedicate five aircraft to our MKE partnership with 18 daily roundtrips to six cities; this will provide a new source of revenue and a significant contribution to the success of our MKE hub.
Q: If SkyWest will fly routes we currently operate with B-717s. How does that help us? Does that mean a reduction in flying for us?
This agreement will not reduce AirTran flying,flying; in fact it’s quite the opposite. SkyWest CRJ-200s will free up our 717s to operate to other markets with better profit potential. In the next two months, AirTran will operate nearly 2,000 more departures than we did last November/December, an almost 5 percent increase. Our stage length and block hours (hours flying) will increase at a greater rate – our block hours will increase by more than 8 percent over the next two months versus last year. As I mentioned before, because of this partnership, we will be able to add new and exciting destinations in the near future.
Q: Does this growth create more opportunities at AirTran?
Absolutely, due to the growth we just discussed, we will be sending recall letters today for a number of pilots who, for various reasons, chose to or had to pass on the last recall, in order to fill a January training class. It is likely we will be adding crew members in other areas as well to support this new partnership.
Q: AirTran JetConnect/Air Wisconsin was discontinued because it was too expensive. Why do we think SkyWest will work?
This marketing partnership is very different than our past relationship with Air Wisconsin. Revenue will be shared on a pro-rated basis and SkyWest Airlines will control local availability, authorization levels and all seat inventory for their aircraft. SkyWest Airlines will assume fuel costs and will maintain all revenue and pricing responsibility for these routes. In short, they’re responsible for their operations and we’re responsible for ours.
Q: If this is the right way to go, why don’t we operate the CRJ-200 ourselves?
This partnership allows both AirTran and SkyWest to do what we do best. For us, that is offering the best low-cost, high-quality service in the sky using North America’s youngest all-Boeing fleet and for SkyWest, it is operating the CRJ-200 from MKE to these six cities. SkyWest is the world’s largest independent operator of the CRJ and has vast experience with this aircraft and type of operation.
Q: How are AirTran Crew Members affected by this partnership? Is this outsourcing?
No, outsourcing implies that we are paying someone else to perform flights that we would otherwise do ourselves. Partnering with SkyWest allows us to not only expand to new cities like DFW and add additional flights to DCA with AirTran jet service, it also give us access to smaller markets which would not otherwise be economically feasible to serve to like DSM, OMA and CAK from MKE. This partnership allows us to better allocate our existing crews and planes to markets that have better profit potential for us, like DFW and DCA. There are no jobs lost because of this partnership.
The simple reality is that this partnership will allow us to expand our operation and offering in MKE. In many instances, SkyWest will be paying us for support services we will provide them for these flights.
Q: How is this partnership different than a traditional codeshare arrangement?
Under a traditional codeshare, the flying by the regional carrier is done on a contract basis without regard to the number of passengers onboard, the regional partner typically paints their planes into the larger carrier’s livery and their employees wear the larger company’s uniforms.
Under this marketing partnership, revenue will be shared on a pro-rated basis and SkyWest Airlines will control local availability, authorization levels and all seat inventory for the aircraft used by SkyWest. SkyWest Airlines will also assume fuel costs and will maintain all revenue and pricing responsibility for these routes.
We have gone to great lengths to ensure that passengers flying on SkyWest aircraft will know during the booking process that these flights are operated by our marketing partner, SkyWest Airlines.
Tickets for these SkyWest flights will be available through all of our booking channels, including AirTran.com, 1-800-AIR-TRAN, travel agents and others.
Q: Why isn’t SkyWest painting their planes into AirTran colors?
A couple of reasons – first, we provide our customers with a unique and I believe industry leading product and we want to make sure we continue to meet our customers’ expectations for service. Unlike traditional code share agreements, we are not going to try to mislead our customers into believing this was our service. Instead, ours is a marketing partnership with each company flying under its own livery and inflight product.
Q: Does this partnership affect our claims of having the most consistent product in the sky or North America’s newest all-Boeing fleet?
Not at all. We maintain all the attributes that have made us successful in the past – it’s a key reason we have structured our partnership agreement to differentiate the brands.
We are also increasing our customer base from markets don’t currently fly to like Des Moines and Omaha.
Q: Will the CRJ also start flying to ATL, BWI, and MCO feeding our other “hubs”?
We have no plans to expand this marketing partnership with SkyWest beyond MKE.
Q: What approvals did AirTran have to receive before beginning this partnership?
AirTran required no approvals to enter into a partnership with SkyWest. This partnership is also consistent with all labor agreements.
Q: Why is this partnership good for AirTran?
This will provide new revenue streams to AirTran, help us support our MKE hub and provide us with growth opportunities in other routes right away. Our partnership with SkyWest is consistent with the plan that Bob has laid out to position the company in the next year to resume profitable growth in 2011.
Q: Finally, do we get passes on SkyWest?
Yes, our agreement includes a commitment to establish a pass policy with SkyWest – the details on that will come out in the next few weeks.
We hope you found this information helpful. We will continue to provide additional information as it becomes available.
Please send additional questions to insideairtran@airtranweb.com
