Wasssup with 9E

[belliott]

Basing your financial advice/info on a regional lifer is probably a worse idea than giving your life savings to Bernie Madoff.

Nope... a temporary agreement was made between MGT and United/Continental... until April 2nd.... then all bets are off... for now.

 

[comrcap]

By all means go on strike. Save those Skywest pilots pay! Take 1 for the team !

 

[jynxyjericho]

By all means go on strike. Save those Skywest pilots pay! Take 1 for the team !

Skywest is on the team?

 

[sinkrate]

Bankruptcy IS going to happen. In some sense it isn't a big deal. I have been through two. It's just a management tool. Unfortunately, this time the tool is going to be used to cut a big chunk of crj 200s out of the Delta contract.

The one caveat is the feed agreement with Delta. It was explained to me that bankruptcy will nullify the contract with Delta. If this is true, I do not see how Delta could possibly NOT park a bunch of 50s. Look at the trouble they went through to park Freedom. Comair was just too easy since they owned them. The next place to slash 50s is the large regional crj200 operator that is in bankruptcy where half a fleet can be parked with the stroke of a pen. I can't believe Delta is not salvitating at the thought. And dare I say, seeing 9E on the brink, giving them a little nudge?

I wish you the best. I've been there. I know what it's like. This is just a temporary set back in your career. With a little kick in the butt you might find yourself better off more quickly than you thought.

You can't simply 'nullify' debt in BK. The debtor can ask the judge to reject a contract in its entirety. You can not reject one part of a contract. Once the judge allows a contract to be rejected the other party is free from all obligations. They can take their business elsewhere. The creditors will form a creditor committee. If the company asks the judge to reject debt agreements (PCL doesn't want to pay loans or bank debt) usually all of the debt agreements are rejected by the judge. It is unusual for a judge to reject just one debt agreement without rejecting all of them. The creditor committee will present their arguments to the judge also.

Delta owns all of PCL's 200's and 41 of the 900's. Delta does not own SkyWest's or ASA's 200's. Which ones will Delta try to 'park'? If it goes to BK it will get very tricky for PCL to retain their 900 fleet. The debt from the Mesaba purchase is tied to the 900's, not the 200's. PCL will not ask the judge to reject the 200 Air Service Agreement, it is profitable for PCL. The trick in court will be to reject debt owed to banks and other lenders but not the debt owed to Delta. The other creditors will use their weight on the creditor committee to force the judge to reject Delta's debt also, and with it the contract for the 41 900's. If PCL asks the judge to reject the Air Service Agreement for the 16 900's PCL owns you can kiss those planes good bye. Delta will buy them and place them in service at SkyWest and park 32 of Skywest's/ASA's 200's in the deal.

So.....If if management can work out the Agreement with UCAL, and end up with a contract for 45 or more Q's that is profitable, will they risk BK to fix the problems with the contract for 16 airplanes? My bet says they won't. The upside of that would be very small and the potential down side very big. If they can't work out a deal with UCAL and enter BK it will be ugly. UCAL will take their business for all the Q's somewhere else and Delta will take at least 16 of the 900's, unless they can clip the pilots for 30% of their pay - which has been typical in BK. PCL will come out of it a much smaller company with 140 or so 200's, a handful of 900's and no long term future at all. If it goes that way management, at Delta's insistence as a price for keeping AC , will come after the labor agreements in a big way. It is classic Anderson.

Which path will management take? If UCAL insists on cheaper labor rates will ALPA work out a deal or will they put half the pilots on the street? Will the turbo prop pilots accept a larger reduction in pay to keep their jobs? What's DALPA's agenda? More money for Delta pilots? Will the FA's agree to it or is everyone screwed? What will the pilots vote to do? If the outcome ends up in labor's hands will the PCL boo birds go for three swings and miss's and screw themselves yet again?

If SM is smart he will do everything he can to keep this decision out of the pilots' hands. This pilot group isn't Frontier.

 

[silver02ex]

If they can't work out a deal with UCAL and enter BK it will be ugly. UCAL will take their business for all the Q's somewhere else

And who would fly the Q? What would United do, take the Q's which don't belong to them and move it to another airline? I doubt it.

 

[hou757]

Actually, yeah they would.

And who would fly the Q? What would United do, take the Q's which don't belong to them and move it to another airline? I doubt it.

 

[silver02ex]

Actually, yeah they would.

Pinnacle is the one who is paying for those airplanes not United. So please explain to me how United can just "take" something that doesn't belong to them. If that's the case, Pinnacle should just take some of United's airplane and start flying them. If United owns these Q's and wants to move them around this wouldn't happen:

"Pinnacle Airlines has moved to defer loan payments worth $16.4 million until 2 April on 16 Bombardier Q400s operated by subsidiary Colgan Air, Inc.
The agreement signed on 20 January with the lender, Export Development Canada, appears to give the Memphis-based regional carrier more time to close a sweeping cost-restructuring plan and avert bankruptcy."

 

[hou757]

My point is that if United wants out of this agreement they will move the flying elsewhere. Q or no Q.

 

[sinkrate]

And who would fly the Q? What would United do, take the Q's which don't belong to them and move it to another airline? I doubt it.

When UAL entered BK they had two regioanl feed contracts - with Air Wisconsin and ACA. Neither of them were willing to work for the price UAL was willing to pay. UAL ditched both of them. ACA died a slow death and then shut down - putting all of their pilots on the street. Air Wisconsin bought a contract with USAirways - but shrank significantly. Eventually SkyWest, Mesa, Trans States and Republic provided the feed UAL wanted.

Reread the latest announcement. If PCL and UAL don't come to an agreement by April first the Q contract will end. Both PCL and UCAL have ageed to that.

 

[silver02ex]

When UAL entered BK they had two regioanl feed contracts - with Air Wisconsin and ACA. Neither of them were willing to work for the price UAL was willing to pay. UAL ditched both of them. ACA died a slow death and then shut down - putting all of their pilots on the street. Air Wisconsin bought a contract with USAirways - but shrank significantly. Eventually SkyWest, Mesa, Trans States and Republic provided the feed UAL wanted.

Reread the latest announcement. If PCL and UAL don't come to an agreement by April first the Q contract will end. Both PCL and UCAL have ageed to that.

But it's going to cost UAL alot more money to put RJ's on those routes over the Q400. It's not like they can find another company to opterate that many Q400 that quick. Even if they enter into an agreement with someone else. Airplanes has to be ordered and training has to be set up, more pilots has to be hired. All that is going to cost alot of money, and time. Look how long it's taking Go Jets to get the Delta flying going and that just transfering the airplanes from one company to another, and GJ is already set up to fly the 700.