Delta/Skywest cuts in SLC

[cfi_greg]

Not at XJT anymore. I would have agreed with you on the buyout about 6 years ago, but I'm not sure SkyWest wants to purchase an airline that has 274 50-seat jets at this point in time. Not much upside to a large 50 seat only operation. XJT has been forced into a position to do pro-rate flying which is a much better deal for Delta so the flying will keep coming XJT's way.

That is the stupidest business plan I have ever heard of. So XJT will keep losing money by flying for delta at cost in order to secure more flying so they can lose even more money. I guess you guys don't have long term goals.

 

[WAVIT Inbound]

Not at XJT anymore. I would have agreed with you on the buyout about 6 years ago, but I'm not sure SkyWest wants to purchase an airline that has 274 50-seat jets at this point in time. Not much upside to a large 50 seat only operation. XJT has been forced into a position to do pro-rate flying which is a much better deal for Delta so the flying will keep coming XJT's way.

A buyout would be to eliminate competition in SLC. Period. I don't think they would really care for the airframes. They belong to Continental anyways.

A side note on Pro-rate. Xjt pays there own fuel on these yes? Do you really think they can keep making money on Pro-rate flying? There is only so much of this that can be done and not bleed red ink. If there was money to be made in pro-rate don't you think more regionals would be doing more of it. I am pretty sure if there was money to be made Skywest would go pro-rate as well to keep all that flying. But hey what do I know? I just fly the planes.

 

[XPOO]

Look...if Delta is STUPID enough to give up the SLC hub, I am fully positive that United would have no problem stepping in. SkyWest would already be set up and United could move right in and Southwest could expand as well.

 

[rickair7777]

Look...if Delta is STUPID enough to give up the SLC hub, I am fully positive that United would have no problem stepping in. SkyWest would already be set up and United could move right in and Southwest could expand as well.

Yeah, the fact is that SKW owns the gates and airplanes, and many of the outstation gates. If DAL packed up and left, SKW would just send the planes to the paint shop for UAX colors.

But I'm certain there's not enough capacity at LAX to absorb all of the SLC DAL flying...unless they want to just give up on the inter-mountain west.

 

[DoinTime]

Look...if Delta is STUPID enough to give up the SLC hub, I am fully positive that United would have no problem stepping in. SkyWest would already be set up and United could move right in and Southwest could expand as well.

Right.....I bet United is waiting with baited breath to open up another hub right next door to Denver.

 

[Truckdriver]

That is the stupidest business plan I have ever heard of. So XJT will keep losing money by flying for delta at cost in order to secure more flying so they can lose even more money. I guess you guys don't have long term goals.

I agree with you that it is a stupid business plan. Compared to a CPA which guarantees a certain margin, the pro-rate deals just plain suck for the regional carriers. It is also not at cost, it is just a risk based deal where XJT and Delta share the risk on loads and fuel. If the planes are full then XJT does make money. As far as Delta is concerned, the pro-rate deal is the best thing they have ever seen. If they have the opportunity to shift flying from CPA deals into pro-rate deals they will do it in a heartbeat. I'm no longer at XJT so it really doesn't effect me, but I do think any more 50-seat Delta flying out of SLC will go to XJT on a pro-rate basis.

 

[Truckdriver]

A buyout would be to eliminate competition in SLC. Period. I don't think they would really care for the airframes. They belong to Continental anyways.

You are correct, Continental leases the airframes then subleases them to XJT. SkyWest could buy XJT then give all the airplanes back to CAL.

A side note on Pro-rate. Xjt pays there own fuel on these yes? Do you really think they can keep making money on Pro-rate flying? There is only so much of this that can be done and not bleed red ink. If there was money to be made in pro-rate don't you think more regionals would be doing more of it. I am pretty sure if there was money to be made Skywest would go pro-rate as well to keep all that flying. But hey what do I know? I just fly the planes.

XJT has been forced into the pro-rate flying due to the politics going on at CAL. No regional would choose to do pro-rate flying over CPA flying if the CPA flying is under a guaranteed margin. SkyWest is in a better position to make money because the flying they do is CPA flying. With XJT doing pro-rate flying, SkyWest will have to reduce the margins they get from CPA flying or do it pro-rate as well to keep XJT from getting that flying. I doubt any regional will start doing pro-rate flying without being forced into it like XJT was. Is it a good thing for XJT, not in my opinion. Is it a good thing for Delta, absolutely. Not saying one company is better than the other, it is just much cheaper for Delta to use XJT now than it is SkyWest.

 

[cfi_greg]

XJT has been forced into the pro-rate flying due to the politics going on at CAL. No regional would choose to do pro-rate flying over CPA flying if the CPA flying is under a guaranteed margin. SkyWest is in a better position to make money because the flying they do is CPA flying. With XJT doing pro-rate flying, SkyWest will have to reduce the margins they get from CPA flying or do it pro-rate as well to keep XJT from getting that flying. I doubt any regional will start doing pro-rate flying without being forced into it like XJT was. Is it a good thing for XJT, not in my opinion. Is it a good thing for Delta, absolutely. Not saying one company is better than the other, it is just much cheaper for Delta to use XJT now than it is SkyWest.

How long will they keep losing money though?

 

[Speedtape]

The merger should be announced next week!

SLC HUB POST-MERGER SONG

 

[Pogue Mahone]

The merger should be announced next week!

SLC HUB POST-MERGER SONG

Hey brother. How the heck are you. Give me a call! Finally back on the line.