Southern Airways Express is never one to be shy about pulling the trigger on an acquisition that makes sense. In fact, the press release announcing Southern’s takeover of Air Choice One notes that this is the airline’s fifth acquisition in the last 8 years. Why on Earth would Southern bother with an airline that has dwindled down to serving one Essential Air Service (EAS) destination? It’s all about positioning to take over the EAS routes SkyWest is abandoning.
Southern has come from small beginnings less than a decade ago to where it is today with 35 airplanes and a lot more on the way. Its first acquisition was Executive Express to pick up its certificate. The airline then went on to start EAS flying, later acquiring Sun Air Express to get the airline’s Pennsylvania-based EAS routes. A couple years later it picked up Mokulele in Hawai’i and followed that up with the other local Hawaiian operator, Makani Kai. At that point, Southern had built a route map only a mother could love, but one that it has been able to sustain.
The airline has growth plans on its own, but there is also now a huge opportunity in front of the airline. With SkyWest abandoning 29 EAS markets due to the pilot shortage, Southern wants to be ready to pounce.
Southern certainly can’t scale quickly enough to take all 29 of those cities. Even if it could, there’s no way the DOT would award them all to Southern. But, operating 9-seaters means Southern can fly under Part 135 rules, and it has better access to pilots than SkyWest does. And these new cities? Let me remind you what’s up for grabs in the red dots below.
You can sure see a lot of those fitting nicely into the airline’s Pennsylvania/New England network as well as Colorado and the Memphis-based grouping. So, how can Southern ramp up quickly enough to be able to make this happen? Find an airline with a lot of spare capacity.
Enter Air Choice One. Air Choice One started doing EAS work more than a decade ago, before Southern was even born. At one point, Air Choice One had the EAS contract in Burlington, Fort Dodge, and Mason City in Iowa; Decatur in Illinois; Ironwood in Michigan; Kirksville, in Missouri; and Jackson in Tennessee. It has lost all of those, now clinging on to life with a single contract in Jonesboro, Arkansas which it flies from St Louis and Nashville.
You’d think a track record like this would raise alarm bells and prevent anyone from wanting to buy the airline, but Southern took a longer look under the hood and wasn’t scared off.
For Air Choice One, the issues seems to be less about operational reliability or anything like that. It’s more about what is doesn’t have to offer… something that Southern has. A look at the docket in Burlington shows the airport requested Cape Air because “Cape Air’s internal reservation center, codeshare with American Airlines, and its interline and baggage agreements.” Air Choice One just doesn’t have those things, and it’s too small for any of the big guys to pay attention.
The same can’t be said for Southern, which has interline arrangements with Alaska, American and United. Southern can take over Air Choice One, put everything under the 9X code, and instantly open up Jonesboro to the world. Problem solved.
That, however, is not why Southern wants to buy Air Choice One. What Southern really wants is those 7 Grand Caravans that Air Choice One owns along with some pilots who these days must be sitting around not doing much. With only Jonesboro to serve, all those extra Grand Caravans mean instant expansion capacity. The pilots at Air Choice One, meanwhile, must be thrilled that they’ll have more flying to do.
With all these new airplanes, Southern has the ability to ramp up and take over some of these markets that SkyWest is abandoning. Though I don’t know the purchase price, it couldn’t have been much. And in exchange, Southern is ready to grow again.
12 comments on “Southern Airways Express Revs Up for Growth with Air Choice One Acquisition”
Not really sure how being a 135 operator solves your pilot issues. The hour requirements to by PIC are exactly the same as the 121 world. The only real advantage is you can potentially fly single pilot. But again, anyone who has 135 pic minimums, also has 121 minimums, and I have a tough time believing the wages would be competitive enough to compete with the regionals.
This strikes me as completely inaccurate.
Would you care to elaborate on which part you believe is inaccurate?
If I’m not mistaken, Part 135 carriers flying planes below a certain size can use pilots with 500 hours (maybe even less) because you don’t need the ATP certification (which generally requires 1500 hours and being 23 years old), just the CPC (Commercial Pilot Certificate). I do know that a fair number of young pilots choose to build their time towards the 1500 needed for ATP (and thus regional and mainline) by going to a Part 135 carrier that flies smaller planes fitting the limits. For example, Mokulele has hired FOs with just 500 hours who are still in college to fly Grand Caravans (and similar for Tradewinds in the Caribbean with its PC-12s). So, I believe there is a different pool of pilots for these airlines flying these smaller planes under the CPC permissions of Part 135 than is needed for regionals and mainline carriers.
So 14CFR135.243a says
(a) No certificate holder may use a person, nor may any person serve, as pilot in command in passenger-carrying operations –
(1) Of a turbojet airplane, of an airplane having a passenger-seat configuration, excluding each crewmember seat, of 10 seats or more, or of a multiengine airplane in a commuter operation as defined in part 119 of this chapter, unless that person holds an airline transport pilot certificate with appropriate category and class ratings and, if required, an appropriate type rating for that airplane.
This honestly a little more nuanced than I expected it to be. So for multi engine planes, like Cape Air, you’d need an ATP. However, for single engine planes you’d only need 1200 hours instead of 1500 (c.3 of the same section above), so there is relief from the ATP requirement (300 hours would be 3-9 months of line flying).
Now I’m sure your insurance company will have the final say as to what minimums they’ll allow, but it does look like you can get pilots a few months before the regionals would.
As far as FOs go, you can get them way before the airlines could since you only need a commercial certificate. Unless required by their ops specs, they’re not really needed so long as you have a working autopilot, and are more of a means to hopefully lock in future captains, than to fulfill a staffing need.
Thanks for the very good info. Always good to go right to the reg! So it’s definitely much easier for Southern to get FOs when flying those Grand Caravans. I only thought to question this because I’ve seen stories/Instagram posts of a number of FOs with only 500 hours or flying for Tradewinds and Mokulele to build their hours, but both fly single-engine planes with 10 seats or fewer.
I once took a few days to bounce around the country flying on a few airlines that only an avgeek would have ever heard of. I missed Southern Airways Express (I’ll get them one day) but I did fly on Air Choice One, roundtrip from STL to Jonesboro. They were a disorganized mess. Departure time came and went and no one was at the gate. I waited with the few other pax for quite a while before someone showed up and shepherded us to the plane. I realize that’s only one data point, so it may not be worth much. The flight itself was fine. The employees were nice and the flight relatively comfortable (I mean, a Cessna is a Cessna). Unfortunately, it was cloudy so there weren’t any views out the window, which is the thing I look forward to most on the small prop planes.
The most annoying thing, which isn’t ACO’s fault (I assume), is that there is no TSA in Jonesboro, so when we got back to STL they had to load us in a van and take us to the front of the terminal to reclear security. I had planned on that and built in plenty of time, but it was still annoying.
Rhetorical question: Do you think the DOJ will sue to stop this acquisition? LOL!
Almost forgot. Have fun with your California adventure.
BREAKING:
JetBlue announces $3.6 billion offer for Air Choice One. When asked for comment, JetBlue President, Joanna Geraghty stated, “We believe that Air Choice One’s brand and values closely resemble that of JetBlue, and we look forward to bringing JetBlue’s award winning hospitality to the people of Jonseboro.” Adding that Jonesboro is primed for growth and is a very exciting option for JetBlue’s Mint lie-flat business class product.
I had a lie-flat seat (well, stretch-out-close-to-flat) on a C208 once, Tropic Air from Caye Caulker to San Pedro. Around five minutes, but I was the only one on the plane. Throw in a York peppermint patty for the “mint” part and there you are.
Maybe JetBlue should put in a bid for Tropic Air too, having missed the rush to Belize.
To tell the truth, I can say that Southern Airways Express is developing to a huge extent and it is so cool that this company doesn’t mark time and tries to use all opportunities for development. I can say that Southern Airway Express has truly great achievements and, from my point of view, this airline is a true exhibition sample of purposefulness and ambition. It is the right decision to implement this purchase because I think that it will bear great fruits to both Air Choice One and Southern Airway Express, benefiting them to a great extent. I think that this purchase will open new doors for both companies and, of course, their activity will no longer be the same because everything will undergo changes. In my opinion, it is really important to move forward and invest in profitable business in order to reach a new level. I think that this decision will entail it.