Rumor SkyWest Inc. receives new jet financing?

[Jon Rivoli]

If CAL had decided to operate XJT's ERJs for XJT's pilots pay rate and CAL pilot work rules, .......

They would lose their a$$es. It's much more than pilot compensation.

By the way, SKW is down to about $500 million and also have about $1.5 billion in debt.

Yes, I just read the report this morning. Go back and read it again, the difference is that the prepaids went up a corresponding amount. Pay ahead on leases, insurance and other expenses and you get steep discounts. Not a bad idea when interest rates are effectively zero. Get a ten percent discount on your insurance or leave the money in a CD? You decide.

Now, if I paid my mortgage ahead for the whole year, what does that do to my cash flow for the next year?

For a company with about $3.5 billion in revenues $1.5 billion in debt ain't much, especially if the interest rates are really low, which they are, which you can do when you have a lot of cash.

You will notice that the net of the balance sheet went down by about $700,000, hence the loss.

 

[General Lee]

RA had an aneurysm four years ago when Delta's regional feed was making record profits while mother D was hemorrhaging cash picking up the tab for fuel. He still hasn't recovered and much of what he has done since has been to make sure that in the future Delta's regional feed will share the pain. Call it rage, but you would be more profitable now were it not for some of his decisions.

Old airplanes may be cheep, but you lose out on depreciation allowance, MX expence and efficiency.

Buy all of the 717's you want and operate them at a loss; they don't generate enough revenue to cover costs. I'm not talking about pilot salaries, I'm talking about the healthcare costs of retiree's and the wages of everyone from rampers and gate agents to HR administrators and purchasing agents.

It's a one way ticket, airlines grow and move into larger equipment and as revenue goes up so do costs. You can't go back. Smaller aircraft can't generate the revenue to cover the increased expense.

Think of it this way; it takes almost exactly the same amount of labor to operate a 50 seat airplane as it does a 747 (throw in a few more FA's), yet a 747 can generate 10-20 times the revenue. Why the hell would any sane person want to do the same work for a fraction of the revenue? Would you go back to flight instructing in a 152? Hell no! You're a 767 fo making the big bucks. You aren't going back to flight instructing and Delta isn't going back to 100 seat airplanes. Especially when they can subcontract it out to some one who can make money doing it.

If RA goes ahead and buys 163 second hand 717's and 319's, plan on getting bent over to help eat the cost. Isn't that the NWA business model? Run the company into the ground then file chapter 11.

As for "smacking down" an upstart regional, good luck with that. You can't replace 300 planes on short notice and neither Gojets nor anyone could come up with the planes or crews in any reasonable time frame.

Indy Air is everyone's go to, they attempted to go head to head with United at a time when fuel costs were just starting to rise (oil was about $10 bbl in 2001), United still had their 737's (even the 200's) and 727's and they had piss poor management that squandered their cash.

Express Jet was doing just fine until they got spit roasted between SKYW and Continental.

Side note, don't ever try to operated RJ's in SLC; Comair tried - toast, ASA - Owned, Expressjet - Owned, Mesaba - bankrupt/ we'll see. Stay out of Jerry's back yard.

I'm not scared and I am not trying to slam you guys either, though it's clear you've got your sack in a bind. Legacy pilots have seen their pay and benefits decimated over the last decade all the while seeing RJ's take over "their routes". The mistake you make is that it isn't cause and effect, no, the same causes led to both the growth of RJ's AND declines in compensation. Costs went up (primarily fuel) while revenues got squeezed ( say thank you to SWA )resulting in legacy carriers shedding unprofitable flying AND cutting pay.

The decline of this profession began with deregulation, all that has come to pass was the inevitable result.

Who the F__k is Mike Boyd anyway? If I predict that an earthquake is going to hit San Francisco, eventually I will be proved correct though after ten years no one will be listening to me. The economics of the 50 seater aren't good and their days are numbered, which is relevant to the topic of this thread.

Peace.

Look Jon, I understand and appreciate your opinion. You have some good points, but I think you don't understand who really is in the driver's seat these days. Back after 9-11, when oil was a bit cheaper and RJs were "in", you guys had solid profits. You had GUARANTEED profits, and life was great. Now, economics are just not on your side. You claim that RA doesn't know what he is doing, when in fact he is the one controlling the game. He is buying used airplanes as a "bandaid" to keep relatively new airplanes around for another 10 years (or newer than some on property), and then will have more money to buy even newer ones. His main focus is to bring down the debt, which he skillfully has since 2008. Next year, after bringing down the debt, Delta will save an EXTRA $500 million per year in interest payments. Per YEAR. The revenue generation in the last few years has been HUGE, and the WSJ said Delta should make $1.86 BILLION this year in profit.

Your airline, on the other hand, has some major obstacles to tackle soon. Not only does your airline mainly consist of 50 seat jets (ASA, SKW, and XJT), but also it is bringing back some 37 seat jets for UAL from the desert. (E135s) WHY? Because Colgan is failing? Maybe. But EVERYONE knows, including Boyd, that the main reason is because you are still paying for those planes anyway in the desert, and you have to use them for something, even if it is at a loss. High oil is here to stay, and none of your 50 seaters can make money. You tried to fly some at break even in MKE for Airtran, and now that's gone. You are running out of places to put them, and the leases (on the E135s it looks like) are still there.

Now that revenues are back up, it is time for mainline pilots to go after things lost during the BK years. That includes money, and routes if possible. Thankfully, high oil is already taking care of the latter problem. There is nothing that can be done about 50 or less seats, you just can't cover the costs associated with high gas. Larger planes though, can spread out the costs, and add fees---can even allow for a profit. Also, I don't think it's 120 717s AND 75 A319s, it's just one or the other. RA seems to want to try planes at about 100 seats, and they would be at bargain rates. Boeing also is a part of the deal, since I believe they owe Delta money over the 787 delay.


Bye Bye---General Lee

 

[Mercyful Fate]

Yup General, go back after all those routes you lost to 50 seat RJs...I am sure that places like PSC, HLN, IDA and GTF would love to see mainline again...

 

[xjhawk]

Why don't you all just go to your respective CEO's and tell them what to do and why it makes sense. Its a given that the 200 (any 50 seat) is on the decline and in the near future more and more will be parked. What will they all replace them with? Look for a lot of 88 seaters at American and a similar scope relief at other airlines in order to compete. How will the scope relief be handled? Its all up to the pilots at the majors. Those in bankruptcy have their hands tied in the matter, but I am sure the others will have a figure in their mind about what it will take to release scope

 

[General Lee]

Yup General, go back after all those routes you lost to 50 seat RJs...I am sure that places like PSC, HLN, IDA and GTF would love to see mainline again...

You're right. Those cities were all flown by mainline planes, and you KNOW the people there would love to see them. In the Summertime I bet all of those could sustain 3 or 4 flights per day. During the rest of the year, probably 2. Funnel people on, and fill the flights. It worked for years. On the East Coast it is happening. Fayatteville, NC, and Gulfport, MS, both all RJ flights a few years ago, are now getting MD88s (GPT), DC9s, and A319s. I hope that continues.


Bye Bye---General Lee

 

[General Lee]

Why don't you all just go to your respective CEO's and tell them what to do and why it makes sense. Its a given that the 200 (any 50 seat) is on the decline and in the near future more and more will be parked. What will they all replace them with? Look for a lot of 88 seaters at American and a similar scope relief at other airlines in order to compete. How will the scope relief be handled? Its all up to the pilots at the majors. Those in bankruptcy have their hands tied in the matter, but I am sure the others will have a figure in their mind about what it will take to release scope

American will most likely merge with USAir, and DP at USAir had to give the unions "a lot" for their support of the merger. I have a feeling they discussed 88 seaters, etc, and I would think they would have indicated who they wanted to fly them, if they do show up on property. DP and the APA really want to get away from AMR management, but DP had to agree to a lot of things that he may not have wanted to. He also stated in the APA notes from their "contract discussions" that he hated 50 seaters. (no joke, I can re paste that if you want me to)


Overall, I want more mainline type jobs available for the Regional guys. Some may not want to come over, instead trying to enjoy their QOL being senior at the Regionals. That's fine. But, the Regionals may transform into something totally different in the next 5 years. The fatigue and rest rules will have an impact on productivity at Regionals (no more CDO's). The hiring minimums will also change (1500 hours or 800 from a specific university program). All of that will make it tougher to attract lowtime pilots, and the low pay won't attract other pilots that have more hours. The Regionals will have to increase the pay, which is great for everyone there, but it will be tougher for the Regional to make profits because Mainline partners will always try to get the "cheapest" regional. (like Gojets) The Regionals will become inefficient, less profitable, and may go into BK like PNCL to restructure everything. That's not fun, and being through an Airline BK, I wouldn't wish that on anyone. High fuel prices and new rules won't help your side of the industry at all.



Bye Bye---General Lee

 

[Jon Rivoli]

I'm sorry Genny, but I find out amusing that you think that anything significant would come out of an AA/ AIRWAYS merger. They haven't even finished integrating the last merger and already have two feuding pilot groups. You want to make out three and expect miracles.

 

[PBRstreetgang]

Genny, et al.
It was a paper DAL put out about 10 years ago explaining the philosophy of the RJ. The RJ is a supplemental asset, it fills the last seats on a widebody by bringing them in on long thin routes. The RJs were never intended to be a stand alone piece of equipment. When you finally figure out the airline business you might actually have some insight. An RJ with one empty seat is still more economical than an MD 80 with 10 empty seats. The RJ should be filling the last few seats going to London or Frankfurt, there will never be enough revenue to justify a RJ from BOI-OAK, unless there is an overseas connection being made. The RJ was used as a union busting tool by mainline management after 9/11, unfortunately they were successful, just about every tier in the airline business is warring with other, and the smallsacks, TILTons, and the rest of the dbag management slimeballs are laughing.

 

[pilotyip]

The RJ was used as a union busting tool by mainline management after 9/11, and the smallsacks, TILTons, and the rest of the dbag management slimeballs are laughing.

This is after the mainline union pilots voted to keep RJ's off of the mainline seniority list. As posted by many others; mainline union senior pilots are the source of the whole RJ, Regional subset.

 

[General Lee]

I'm sorry Genny, but I find out amusing that you think that anything significant would come out of an AA/ AIRWAYS merger. They haven't even finished integrating the last merger and already have two feuding pilot groups. You want to make out three and expect miracles.

Jon,

from another forum:


The unions representing US Airways and American Airlines pilots will seek to negotiate together for a joint contract as the airlines move closer to a possible merger, officials from both unions said Monday in Charlotte.

The president of the Allied Pilots Association, Capt. Dave Bates, visited Charlotte to talk to members of the U.S. Airline Pilots Association. He answered questions about job security, pay rates, and other contractual issues from about 50 US Airways pilots at the union’s headquarters on East Woodlawn Road.

Bates rated the odds of a merger “very high.”

Capt. Gary Hummel, president of Charlotte-based USAPA, said it would be in both unions’ best interest to work together. “We both agreed there’s more value for both our unions if we work together,” said Hummel.

USAPA represents about 4,300 active US Airways pilots, 1,463 of them in Charlotte. Coming to an agreement for a joint contract with the APA’s 8,000 active pilots could smooth the path for a US Airways-American merger, which US Airways has been pursuing since American sought bankruptcy protection last year.

US Airways CEO Doug Parker announced last month that he had secured support for a merger from unions representing American’s pilots, flight attendants, and ground workers and mechanics. The three groups, with more than 50,000 members, were swayed by Parker’s promise of higher wages and about half as many job cuts as under American’s standalone bankruptcy plan.



Bye Bye---General Lee