United threatens Air Wisconsin contract

Air Wisconsin‘s contract to operate regional jets on United Express flights is threatened by a United Airlines effort to cut its costs. United, which is under Chapter 11 bankruptcy court protection, has issued a request for proposal (RFP) to several regional airlines to replace the regional jet capacity operated by Air Wisconsin. Air Wisconsin operates 70 regional jets on United Express flights, including twelve BAe 146-200s and five BAe 146-300s. United is seeking to cut its costs by about US$2 billion in its effort to emerge from bankruptcy. Earlier, it had attempted to impose a less generous contract on Washington-based United Express operator Atlantic Coast Airlines (ACA). ACA opted to drop out of the United Express program and establish itself as a low-cost airline, Independence Air. Ironically, Independence Air is one of the airlines invited to bid on United’s RFP. Air Wisconsin is also invited to bid on the RFP, and may retain the contract if its bid succeeds. Indeed, many see the RFP as a means for United to pressure Air Wisconsin into reducing its costs. Should Air Wisconsin not retain the contract, United would have to find another airline to operate BAe 146s or Avro RJs or lose its ability to serve the lucrative Aspen route from its Denver hub. The BAe 146 and Avro RJ are the only jets certified to operate at the popular ski resort.

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