Air Wisconsin-Air Tran deal brings more CRJs to Atlanta

 - May 7, 2008, 12:04 PM

Orlando, Fla.-based low-fare carrier AirTran Airways took a page from the book of North America’s full-service airlines last month when it enlisted Air Wisconsin to replace some of its Boeing 717 capacity from Atlanta with 50-seat Bombardier CRJs. The seven-year code-share deal, scheduled to take effect November 15, allows Air Wisconsin to fly two daily round trips from Atlanta to Greensboro, N.C., and Pensacola, Fla., and four daily round trips between Atlanta and Savannah, Ga., as AirTran JetConnect.

The deal represents AirTran’s first attempt at developing a regional feed network alongside its traditional mainline services. It also extends Air Wisconsin’s code-share activities outside its Chicago- and Denver-based United Express network for the first time since United Airlines bought the Appleton, Wis.-based company from its original owners in 1992.  

Now flying 17 BAe 146s, 10 Dornier 328 turboprops and 27 Bombardier CRJ200s as United Express, Air Wisconsin expects delivery of another 25 CRJs for its United networks next year. The AirTran deal tentatively calls for the use of another 10 CRJs based in Atlanta, enough to contribute another 100 daily flights. Air Wisconsin plans to add roughly 150 more employees in Atlanta by the end of next year, by which time it expects to fly a total of 89 airplanes.

According to Air Wisconsin, the contract with AirTran in no way reflects a deteriorating relationship with United, on whose behalf it continues to add service and replace mainline airplanes on marginal routes. In fact, on October 31 United replaced two daily nonstop flights between Chicago and Colorado Springs, Colo., with three CRJ flights by Air Wisconsin and another two by Sterling, Va.-based Atlantic Coast Airlines.

However, as the Air Line Pilots Association negotiates concessions to help save United from bankruptcy, growth opportunities with United for its regional partners may hinge on what new scope-clause language ultimately arises, particularly if ALPA at some point convinces the courts to declare an end to force majeure. Unlike fellow United Express affiliates SkyWest and Atlantic Coast, Air Wisconsin has served exclusively at the pleasure of the Chicago-based major for the past 10 years. To Air Wisconsin and an increasing number of independent regional airlines, spreading risk through diversification into multiple code-share deals makes sound business sense in these uncertain times.

If nothing else, the move certainly emphasizes Air Wisconsin’s return to a more aggressive growth strategy after nearly a decade marked by a somewhat conservative approach to business. Learning from the past mistakes of the “original” Air Wisconsin, which nearly collapsed under the weight of its own unchecked expansion in the early 1990s, the current owners adhered to an ethic of cost containment and gradual growth from the time they bought the airline from United in 1993 until they placed a landmark order for 51 CRJs last year.

After flying a uniform fleet of BAe 146s until February 1998, Air Wisconsin inherited 10 Dornier 328s when it bought the bankrupt Mountain Air Express to augment its presence in Denver. Four months later it placed an order for its first four Canadair Regional Jets, marking the start of a new, more aggressive posture. Although at the behest of United the airline shrank its Dornier fleet from a peak of 23 airplanes to its original complement of 10, its rapidly growing CRJ fleet has more than compensated for the turboprop capacity shed from Chicago.   

Meanwhile, the Air Wisconsin-AirTran deal also reflects the growing stature of the low-fare, no-frills segment of the U.S. air-transport industry. In a similar move, Denver-based low-fare carrier Frontier Airlines signed a code-share contract with Mesa Air Group last fall, marking the first attempt to develop a separate regional network by a low-fare airline since Frontier signed a short-lived code-share deal with Mountain Air Express in January 1998. Since it inaugurated service between Denver and Oakland, Calif., on October 22, Mesa now flies 50-seat CRJs to seven cities from Denver as Frontier JetExpress.

Contrary to the original concept of a “feeder” network, however, both the Frontier and the planned AirTran regional partnerships took hold out of desire to open new service to unproven markets or maintain point-to-point service to declining markets. In the case of AirTran, Air Wisconsin will replace two mainline round trips between Atlanta and Savannah, Ga., with four round trips in a CRJ. Air Wisconsin will also add two round trips to Greensboro and Pensacola to AirTran’s existing twice- daily Boeing 717 service to those cities.

“Developing a regional partner to feed AirTran Airways has been our goal for some time,” said AirTran president and COO Robert Fornaro. “With the launch of AirTran JetConnect, we’ll be able to re-deploy our Boeing 717s in longer-haul, more profitable markets and facilitate growth in larger markets we currently do not serve.”