Last month’s rush to speculation over the effects of United Airlines’ decision to file for Chapter 11 bankruptcy protection had just spread to include conjecture about its regional affiliates when Atlantic Coast Airlines released an illuminating statement on the status of its code-share relationship with the world’s second-largest carrier. One of many creditors of the Elk Grove, Ill.-based airline, ACA confirmed that United owes it $10 million for services performed before the December 9 bankruptcy filing. ACA also acknowledged its exposure to a “number of risks” stemming from the bankruptcy, including the potential for United to reject the terms of its code-share contract and the possibility that lenders could cut off the flow of financing for airplanes.
In fact, United reportedly hopes to draw as much as $80 million in annual contract concessions from its three United Express affiliates, including Air Wisconsin and SkyWest. To help its cause, it has entertained competing bids from two other regional airlines. One of those understood to have shown interest–former United Express partner Mesa Air Group–reestablished a presence in Denver early last year to serve a new code-share partnership with Frontier Airlines. However, the Phoenix-based regional has begun to curtail its relationship with Frontier as a lingering environment of razor-thin yields results in “less than satisfactory” returns for Mesa. The pro-rate contract allows either party to adjust frequencies and/or exit markets altogether, leaving Mesa the option of redeploying its Denver-based CRJs with other partners.
