Republic loans more money to Midwest

[Captain Morgan]

Yeah, I would tend to agree. I think we are just trying to keep our planes working and avert furloughs. Remember, we were going to lease some 145's to some Mexican operation but our CBA prohibits this so now we have to make money with them some other way. This is just my understanding, but someone more in the know, feel free to chime in.

 

[Minimaniac]

Bedford, and any CEO for that matter, really doesn't care about furloughs. Sending workers home is more of a hit on his ego than a hit on his business. The name of the game at Republic since Frontier got blindsided by the credit card company and forced into bankruptcy has been to keep the airplanes employed. If the world market was better, he would have sold any airplane that did not have a home. The true test of value for an RJ (and everything for that matter) is in what someone will pay to purchase it. Very few people want to buy RJ's. Even the 170 is a hard sell. 50 seaters with a for sale sign make nearly everyone run the other way. For a company that "owns' their RJ's, like RAH, the only real option these days is to do whatever it takes to keep your planes employed. Bedford mentioned to us that the orignal Midwest investment would break even this June. I think that the fact that MIdwest has survived this long has encouraged him to throw a little more money that way. Right now, every million he lends tends to come back to him within a few months from the contract provider. Essentially, Bedford is giving his renters their first few months rent free.

Skywest is by far the better off of the two carriers (RAH being the other). Their stradegy is proven, and continues to work. Middle of the road pricing, reliable product, and diverse client list works. RAH is still like that, but the quality of our clients has slipped. Once we started to settle for uncertain income (Midwest), we took a big step in the wrong direction. Skywest has been fortunate enough to just extract themsselves from that same situation. The difference is, RAH is going to end up owning Midwest. That is not a good thing. There is no big sneaky end game to all of this. The big players want less competition, and they are going to get it. Midwest will cease to be, and RAH will be left with the baggage in one way or another. RAH does not need another certificate. RAH does not want to do stand alone flying. RAH will never take over the world. Bedford has been thrown off his track, and he is thrashing about to get back on.

 

[Captain Morgan]

Bedford, and any CEO for that matter, really doesn't care about furloughs. Sending workers home is more of a hit on his ego than a hit on his business. The name of the game at Republic since Frontier got blindsided by the credit card company and forced into bankruptcy has been to keep the airplanes employed. If the world market was better, he would have sold any airplane that did not have a home. The true test of value for an RJ (and everything for that matter) is in what someone will pay to purchase it. Very few people want to buy RJ's. Even the 170 is a hard sell. 50 seaters with a for sale sign make nearly everyone run the other way. For a company that "owns' their RJ's, like RAH, the only real option these days is to do whatever it takes to keep your planes employed. Bedford mentioned to us that the orignal Midwest investment would break even this June. I think that the fact that MIdwest has survived this long has encouraged him to throw a little more money that way. Right now, every million he lends tends to come back to him within a few months from the contract provider. Essentially, Bedford is giving his renters their first few months rent free.

Skywest is by far the better off of the two carriers (RAH being the other). Their stradegy is proven, and continues to work. Middle of the road pricing, reliable product, and diverse client list works. RAH is still like that, but the quality of our clients has slipped. Once we started to settle for uncertain income (Midwest), we took a big step in the wrong direction. Skywest has been fortunate enough to just extract themsselves from that same situation. The difference is, RAH is going to end up owning Midwest. That is not a good thing. There is no big sneaky end game to all of this. The big players want less competition, and they are going to get it. Midwest will cease to be, and RAH will be left with the baggage in one way or another. RAH does not need another certificate. RAH does not want to do stand alone flying. RAH will never take over the world. Bedford has been thrown off his track, and he is thrashing about to get back on.

Makes a lot sense. Thanks for the insight.

 

[CitationLover]

Bedford, and any CEO for that matter, really doesn't care about furloughs. Sending workers home is more of a hit on his ego than a hit on his business. The name of the game at Republic since Frontier got blindsided by the credit card company and forced into bankruptcy has been to keep the airplanes employed. If the world market was better, he would have sold any airplane that did not have a home. The true test of value for an RJ (and everything for that matter) is in what someone will pay to purchase it. Very few people want to buy RJ's. Even the 170 is a hard sell. 50 seaters with a for sale sign make nearly everyone run the other way. For a company that "owns' their RJ's, like RAH, the only real option these days is to do whatever it takes to keep your planes employed. Bedford mentioned to us that the orignal Midwest investment would break even this June. I think that the fact that MIdwest has survived this long has encouraged him to throw a little more money that way. Right now, every million he lends tends to come back to him within a few months from the contract provider. Essentially, Bedford is giving his renters their first few months rent free.

Skywest is by far the better off of the two carriers (RAH being the other). Their stradegy is proven, and continues to work. Middle of the road pricing, reliable product, and diverse client list works. RAH is still like that, but the quality of our clients has slipped. Once we started to settle for uncertain income (Midwest), we took a big step in the wrong direction. Skywest has been fortunate enough to just extract themsselves from that same situation. The difference is, RAH is going to end up owning Midwest. That is not a good thing. There is no big sneaky end game to all of this. The big players want less competition, and they are going to get it. Midwest will cease to be, and RAH will be left with the baggage in one way or another. RAH does not need another certificate. RAH does not want to do stand alone flying. RAH will never take over the world. Bedford has been thrown off his track, and he is thrashing about to get back on.

You RAH pilots feel like RAH will obtain this certificate somehow. Unless my math is correct, NWA/DAL and TPG has put up $250million in financing to obtain equity in the company while you have put up a lot less ($40 or so million) in "loans". They can obviously keep paying to play and hope DAL/TPG or a bankruptcy judge throws the certificate your way in a bankruptcy sale, if and when this happens.

The whole point of this is DAL's scope and avoiding it (in my opinion). Selling that certificate to you completely shows the sham of this operation and reveals their hand, something they do not want to do. I would imagine Midwest will continue to limp by and by as they try to further erode DAL's scope. DAL doesn't view a 170/190 operation out of Milwaukee as "competition", they are "allies" after the greater goal: DAL domestic flying.

 

[Indy319FA]

Or RAH could buy the Midwest name sans certificate and keep all the flying on the Republic certificate. There are no scope restrictions on the Republic certificate other than what we fly for US Airways. Bedford has always had an interest in flying bigger aircraft and running a bigger operation, but he knows the path followed by ACA/Independence and Expressjet is suicidal. Don't be surprised by some kind of sale where RAH gets the name, but does not have to take the certificate and obligations that come with it.

 

[Indy319FA]

The whole point of this is DAL's scope and avoiding it (in my opinion). Selling that certificate to you completely shows the sham of this operation and reveals their hand, something they do not want to do. I would imagine Midwest will continue to limp by and by as they try to further erode DAL's scope. DAL doesn't view a 170/190 operation out of Milwaukee as "competition", they are "allies" after the greater goal: DAL domestic flying.

All the DL flying is on the Shuttle America and Chautauqua certificates. The Republic certificate has Midwest and US Airways flying. US Airways places no restrictions on aircraft we fly for other companies. Their scope only applies to US Airways flying, so RAH can place any kind of flying on the Republic certificate it wants.

 

[CitationLover]

Or RAH could buy the Midwest name sans certificate and keep all the flying on the Republic certificate. There are no scope restrictions on the Republic certificate other than what we fly for US Airways. Bedford has always had an interest in flying bigger aircraft and running a bigger operation, but he knows the path followed by ACA/Independence and Expressjet is suicidal. Don't be surprised by some kind of sale where RAH gets the name, but does not have to take the certificate and obligations that come with it.

So why would DAL sell a name brand to a future competitor in a market? It makes no sense whatsoever.

 

[Secret Squirrel]

Skywest refuses to "pay to play". We will see who had a better strategy...

Really? You don't pay to play? Do the letters A S A have any meaning to you? Seems like the biggest pay to play in a long while.

 

[CitationLover]

All the DL flying is on the Shuttle America and Chautauqua certificates. The Republic certificate has Midwest and US Airways flying. US Airways places no restrictions on aircraft we fly for other companies. Their scope only applies to US Airways flying, so RAH can place any kind of flying on the Republic certificate it wants.

See my above post. Will RAH shoot their bread and butter in the foot (SA and Chilltaco) with Delta by buying and operating a competitor operation in MKE (versus heavy Delta ops in MSP/ORD/DTW)?

The answer is no. I am sure BB is fine with taking orders from mainline and not putting up with the BS of RUNNING an airline. The Midwest brand has been clobbered thanks to TH and TPG's inept management. Buying the brand gets you nothing. The Milwaukee public is already shying away from the dumbed down Midwest.

Frankly, DAL and AA's MEC should wake up to the certificate shuttle going on and hold their scope clauses to the respective holding companies their management employs. Having 3 certificates is ridiculous. If only the APA can go back to fining RAH. This is why RAH and Mesa do not have the best name in the business with respect to "upholding" the profession.

 

[jravi8tor]

The only thing that is for certain is our 25th anniversary as an air carrier providing exceptional service from Milwaukee is tomorrow, 11th, of June 2009! Unfortunately 3/4 of us are furloughed..... So why does it really matter!