Airline affiliates and CPA's

Airline Analysis

by Robert G Herbst

Mainline Affiliates

February 29, 2008 was the last update for this page.

        Over the past few years legacy airlines have increased capacity and revenue by contracting with regional type airlines operating primarily smaller jets [under 70 seats]. These "contracts" are known as "capacity purchase agreements".

        In addition to capacity purchase agreements, American, Delta, Northwest and USAir also operate their own regional jet carriers.

        Tables below provide the affiliate impact for the airlines covered by this website since year 2003. A summary of each airlines regional affiliation is provided below the table.

        Graphs provide side-by-side comparisons for selected metrics.

American affiliate data

2003

2004

2005

2006

2007

Affiliate % of total consolidated revenue

8.73%

10.08%

10.40%

11.12%

10.82%

Affiliate % of total consolidated expense

9.48%

11.06%

11.97%

12.45%

12.63%

Affiliate ASM % of total consolidated ASM's

4.95%

5.86%

6.73%

7.23%

7.32%

RJ % of total consolidated jet fleet [1]

18.57%

23.19%

24.84%

25.58%

26.07%

Operating RASM (calculated consolidated)(cents) [2]

10.01

10.07

10.94

11.99

12.46

Operating CASM (calculated consolidated)(cents) [3]

10.66

10.29

11.13

11.56

12.07

Total consolidated revenue (million)

$17,403

$18,608

$20,657

$22,490

$22,833

Total consolidated expenses (million)

$18,532

$19,029

$21,008

$21,675

$22,131

Total consolidated capacity (ASM's)(million)

173,806

184,850

188,826

187,575

183,320

Total mainline & affiliate jet fleet (operating)

910

930

903

886

Affiliate passenger revenue (million)

$1,519

$1,876

$2,148

$2,502

$2,470

Affiliate expense (million)

$1,757

$2,104

$2,515

$2,698

$2,796

Affiliate ASM's (million)

8,597

10,835

12,714

13,554

13,414

Affiliate jets (RJ's)

169

211

231

American has capacity purchase agreements with two wholly-owned subsidiaries of AMR, American Eagle Airlines, Inc. and Executive Airlines, Inc.

American also has capacity purchase agreements with two regional airlines, Chautauqua Airlines, Inc. and Trans States Airlines, Inc.

Under these arrangements, American pays the American Connection carriers a fee per block hour to operate the aircraft. The block hour fees are designed to cover the American Connection carriers’ fully allocated costs plus a margin. Assumptions for certain costs such as fuel, landing fees, insurance, and aircraft ownership are trued up to actual values on a pass through basis. In consideration for these payments, American retains all passenger and other revenues resulting from the operation of the American Connection regional jets

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United affiliate data

2003

2004

2005

2006

2007

Affiliate % of total consolidated revenue

10.24%

11.77%

14.04%

15.00%

15.22%

Affiliate % of total consolidated expense

11.82%

14.08%

15.67%

14.96%

15.40%

Affiliate ASM % of total consolidated ASM's

9.30%

9.91%

10.30%

RJ % of total consolidated jet fleet [1]

38.56%

38.93%

36.40%

Operating RASM (calculated consolidated)(cents) [2]

11.19

12.17

12.73

Operating CASM (calculated consolidated)(cents) [3]

11.33

11.88

12.07

Total consolidated revenue (million)

$14,933

$16,413

$17,304

$19,334

$20,131

Total consolidated expenses (million)

$16,246

$17,217

$17,529

$18,875

$19,099

Total consolidated capacity (ASM's)(million)

154,681

158,835

158,191

Total mainline & affiliate jet fleet (operating)

752

750

739

Affiliate passenger revenue (million)

$1,529

$1,931

$2,429

$2,901

$3,063

Affiliate expense (million)

$1,921

$2,424

$2,746

$2,824

$2,941

Affiliate ASM's (million)

14,381

15,740

16,301

Affiliate jets (RJ's)