Life Cycle by Location at a Charter Airline

The Rocky Mountain News has a good article on the ebb and flow of business at Denver International Airport and how that effects smaller charter airlines. My only argument is the article implies that charter airlines are making the primary decision to scale back at DEN. In fact, this is a reactionary move. Charter airlines don't so much choose their locations as they choose the customers that want them to fly there. The primary customer for a charter airline is the wholesaler, from the biggies like MLT or Apple Travel down to the small ones who specialize in spring break or bowl game packages. They find the markets and partner with the charter airlines to serve the need.
Which brings us to back to Denver. For several years DEN was a great location for charter operators like Champion Air and Sun Country Airlines (when they were still pure charter). The vacation market to places like Florida, Vegas and Mexico were under served by the majors. That left the door open for wholesalers and tour operators to offer up low frequency, low cost travel packages to these destinations virtually under the radar of the other airlines in DEN. So what happened? DEN got a new airport and new competition in the form of Frontier Airlines, Southwest Airlines and a resurgent United Airlines. Over time tour operators found themselves competing with scheduled operators who were matching their prices and offering greater frequency. Their little niche had popped up on the radar screen and taken a hit.
Devastating for the charter airline, right? No so much. This is another day in the life for the charter operator and the wholesalers that feed them. Both are small and adept at switching markets lightning quick in airline terms. If they can't do that, they can't survive. You can bet that the capacity once served in DEN will find another home.

US Airlines Cash in on CRAF

Every year the Pentagon contracts with civilian airlines to make sure they have adequate reserves of passenger and cargo lift when their needs outstrip their own lift capabilities. This is the Civil Reserve Air Fleet, CRAF, and the contracts are big business, $2.3 billion worth of big business this year alone. Competition for these contracts is normally pretty intense. The contract winners have been announced for this year and I'd like to offer up a personal congratulations to the folks at Evergreen Internationl Airlines for pulling in a $1.1 billion contract along with their partners North American Airlines. They, along with FedEx pulled down the lion's share of the dollars. Nice to job to the little guys like MN Airlines (Sun Country) and Grand Holdings (Champion Air) for getting a small slice of the pie too. Every bit helps.

Things Look Bright for Sun Country Sale

An arbitor has cleared the sale of Sun Country Airlines from one privately held hand to another. Majority investors are selling their interest in the airline to businessman Tom Petters. Yes that Tom Petters, as in Petter's Warehouse, The Federated etc etc. The deal, whose terms are not disclosed, had been held up by minority investors who felt they had the right to contest the sale and make a competing offer after reviewing the books. Well the arbitor told them "ummm not so much" so the runway is cleared for Mr. Petters. It remains unknown if the new owner has any plans to alter Sun Country's current business plan.

Congratulations Tom, hope all goes well because the Twin Cities desperately needs the competition to drive fares down. By the way do you know the best to be a millionaire owning an airline? Start off a billionaire.