AirTran, SkyWest Deal Challenges Traditional Regional Airline Role

When AirTran Airways launches service on SkyWest Airlines jets between Akron and Milwaukee, it will be challenging the business practices that have governed the regional-airline industry for years.


PSA

Under the deal, AirTran’s new Ohio-Wisconsin route will be on SkyWest planes with SkyWest crews. That’s standard for a marketing partnership between a mainline carrier and a regional partner.

But in what the two airlines call a path-blazing departure from other mainline-regional agreements throughout the United States, SkyWest will also handle marketing and scheduling, set fares and provide fuel. And the planes themselves will carry SkyWest colors.

In fact, about the only thing AirTran brings to the arrangement is passengers — who will still book on AirTran and carry AirTran tickets — and access to its larger route network.

What AirTran gets, in return, is money, because it will share revenue from ticket sales on the flight. Exact terms were not disclosed.

The deal is a throwback to how mainline and regional carriers related 20 years ago when they first cooperated on routes. Regional airlines in the 1980s had more financial exposure in partnerships. But as demand for small jets heated up, regionals became immunized from risk, industry consultant Robert Mann said. Now, the pendulum is swinging back “to a fairer balance of risk between the major and regional parties,” he said.

SkyWest President Chip Childs called the arrangement the best of both worlds because it allows SkyWest to use AirTran’s booking tools while permitting AirTran to expand into new markets.

SkyWest, based in St. George, Utah, is the country’s busiest regional carrier, with more than 400 aircraft. It flies as United Express for United Airlines and Delta Connection for Delta Air Lines.

Its contract with AirTran calls for SkyWest to operate five 50-seat CRJ200 jets between Milwaukee and six other cities, including Akron and Pittsburgh.

Passengers will carry AirTran tickets and check in at the AirTran counter, but they’ll step onto a plane painted with SkyWest’s livery.