Could someone smart explain SKYW stock's continual decline?

[FishandFly]

Down another 5% today. Currently at 7.37.

 

[mesaserf]

Down another 5% today. Currently at 7.37.

A ton of fifty seat jets with no place to go when the contracts run out?

 

[XPOO]

A ton of fifty seat jets with no place to go when the contracts run out?

They all have places to go...right back to the leinholder.

 

[79%N1]

They all have places to go...right back to the leinholder.

So, what is your theory?

 

[777forever]

They all have places to go...right back to the leinholder.

Thank you! Somebody that actually knows what's going on.

Yup, minimal tail risk at Skywest Inc

 

[777forever]

So, what is your theory?

Either 1 for 1 deal or 2 for 1 deal for 50 seater in exchange for 900 if Delta TA passes

 

[Freebrd]

Either 1 for 1 deal or 2 for 1 deal for 50 seater in exchange for 900 if Delta TA passes

and what makes you think SKYW/ExJet will get the 900s? Pincl, CMR, Repubic, others are cheaper no?

 

[Nevets]

Haven't looked but wouldn't be surprised if all publicly traded DCI carriers are down because of the news of the DAL TA.

 

[AntiJedi]

and what makes you think SKYW/ExJet will get the 900s? Pincl, CMR, Repubic, others are cheaper no?

Not 100% sure, but having a Billion dollars at the ready will probably help a lot.

 

[Whataboutbob]

Delta can get out of Pinnacles 200's without 1 for 1, or 2 for 1 deals....it's called bankruptcy. So not so sure more 900's if DL TA passes coming Pinnacles way.

 

[rene]

Not 100% sure, but having a Billion dollars at the ready will probably help a lot.

Look again? Not nearly $1 billion anymore and burning through cash at more than $1 million per day? lots of talk about a ch 11.

 

[777forever]

Delta can get out of Pinnacles 200's without 1 for 1, or 2 for 1 deals....it's called bankruptcy. So not so sure more 900's if DL TA passes coming Pinnacles way.

Right, and Pinnacle is going to get a Billion dollars worth of plane straight outta Bankruptcy? That's like a normal everyday person walking out of Bankruptcy court and then approved for a lease on a Ferrari!

Also, because I know you're thinking about it, why would DAL purchase a billion dollars worth of planes to give to a Pinnacle when they can use somebody else's money to get lift(SKW!)?

 

[777forever]

Not 100% sure, but having a Billion dollars at the ready will probably help a lot.

Thank you! Another person that knows what going on!

Look again? Not nearly $1 billion anymore and burning through cash at more than $1 million per day? lots of talk about a ch 11.

SKW Inc lost 700k last quarter mostly because of poor performing foreign investments, and now you speak of burning through $1 millon per day? Put down the Jeffrey.....

 

[amcnd]

A ton of fifty seat jets with no place to go when the contracts run out?

The leases are tied to the contract length.. So no risk. Delta doesn'nt want to use its own credit for more RJ's. Yes Gojet can do it cheaper. But there leases will cost more, so they would do it at a loss.. How long could that last.. Sky inc has about 660mill cash in the bank.. and in my opinion about to flash the cash.. How?, Not sure... But i don'nt think they are looking to buy another airline.. They are still having buyers remorse with XJT.. But, they have been shifting away from Delta. They added Alaska air and Usair in the last year.. Those are small ops, that im sure they want to grow.. 5 alaska and 15 Usair aircraft..

 

[amcnd]

Right, and Pinnacle is going to get a Billion dollars worth of plane straight outta Bankruptcy? That's like a normal everyday person walking out of Bankruptcy court and then approved for a lease on a Ferrari!

Also, because I know you're thinking about it, why would DAL purchase a billion dollars worth of planes to give to a Pinnacle when they can use somebody else's money to get lift(SKW!)?

Bingo.. 70 new 900's is 1.7 billion..doubt delta wants to tie that much money/credit up... When they have 100 737-900's 27 MD90's. And now 88 717's...thats got to be alot of momey...

 

[altimaklr]

The regional biz is slowly fading away. SkyW might not have any tail risk, but once the contracts on all the EM120's, CRJ2's and E145's expire, there will be nothing to replace that flying. The majors will not allow scope on any additional jets, and Skywest will take a big revenue hit. Huge fleet shrinkage will mean additional cost and a very expensive workforce. Ability to finance planes is nice but it doesn't mean much if there isn't anything to finance.

 

[EngineOut]

To answer the original poster: No. Not here.

 

[Raoul Duke]

This is just the tip of the iceberg. The expenses associated with lease returns will be crushing.

 

[Data]

Don't be so sure the 50 seat contracts are safe...anywhere. Delta is paying huge 'fines' for this flying in the form of seat costs upwards of 15 cents/mile. I think they will pay the penalties associated with breaking the contracts to dump these. The 700/900 costs are fairly close to the 757 (I think it was around 8.2 cents/mile). I can't remember the exact numbers but the 700 was 8.something and the 900 was high 7s.

 

[Ridgeback]

Right, and Pinnacle is going to get a Billion dollars worth of plane straight outta Bankruptcy? That's like a normal everyday person walking out of Bankruptcy court and then approved for a lease on a Ferrari!

Also, because I know you're thinking about it, why would DAL purchase a billion dollars worth of planes to give to a Pinnacle when they can use somebody else's money to get lift(SKW!)?

This is EXACTLY why Pinnacle and or Comair WILL get the new 900's. Look at the historical facts. Start with the Mesaba and NWA history...let's just move ahead 8 years and call it Pinnacle and Delta history since the players are the same. Spanjers, Anderson, everything the same only the names (airline) have changed.

Nwa forces Mesaba in chapter 11 by withholding payments. Mesaba uses chapter 11 to get out of Avro leases, shed pilot and other union labor cost. Also the Big Sky experiment was canned. Sound familiar so far. Just replace Mesaba with Pinnacle, NWA with Delta, Avro's with Saabs,Big Sky with Colgan.

So what happened next? Mesaba was awarded 19 crj 200's and 36 crj 900's, soon to grow to 51 900's.

It's no secrete the Delta wants to get out of 200's. The Delta TA leads us to believe the number is 150. Looking at pinnacle 124 + 19 = 143 hmmm? In my opinion delta will take their own 200's that are leased to pinnacle and dumb those. Why Pinnacle vs. Skywest. The Skywest 200's are exactly that, Skywest's problem why would Delta give them an out when they can use that out for themselves.

 

[JustaNumber]

The Skywest 200's are exactly that, Skywest's problem why would Delta give them an out when they can use that out for themselves.

Good theory--you're probably right if history is a guide. Does anyone know when any of the leases expire?

 

[amcnd]

Rember...,Delta has a "rate reset" for all there contracts. You don't want to drop your cheapest carrier or your "rate" goes up.. My guess is 100-150 CRJ200's stay. But split between all the same airlines...

 

[On Your Six]

Too bad Skywest isn't ALPA. The TA says at least 35% of upcoming newhires will come from ALPA DCI carriers. Looks like ASA, and PNCL pilots will be picked up. At least Skywest will have plenty of crews for those new 76 seaters.


Godspeed!


The OYSter

 

[Gr82Aviate]

Look again? Not nearly $1 billion anymore and burning through cash at more than $1 million per day? lots of talk about a ch 11.

Have you been drug tested lately?

 

[CLARKGRSWOLD]

Not 100% sure, but having a Billion dollars at the ready will probably help a lot.

It's down to nearly 550 million BTW. SKYW pilots are in the dark about the future

 

[AntiJedi]

It's down to nearly 550 million BTW. SKYW pilots are in the dark about the future

I think you're confusing things. One cannot be down to $550 million on a loan that hasn't been executed yet.

 

[XPOO]

There is $583M in the cash and securities. No other regional airline can even come close to that. So if you think Inc is nearing a Chapter 11, every other regional in the country will be there first.

Inc made $6M last quarter off just it's prorated routes. Those include nearly every route flown on an EMB for United and all EMB routes for Delta. They also include a handful of 200 routes for both United and Delta. They may not be the cheapest airline out there, but they ARE pulling profits from the overall of their prorate markets.

Beyond that, Inc was approved for a multi-billion dollar loan, and has made it known that they plan to put in a 300-400 aircraft order in the very near future. Inc wouldn't be talking like that if there weren't some talks going on behind the scenes with their major partners.

50-seaters are on their way out. That writing has been on the wall for years now. Inc has known this for a long time, but they have managed to successfully milk more life out of them than any other regional operator. And now that they've weathered the three year storm of engine overhauls, the profits are set to soar again. Inc is nowhere near peril.

 

[UncleRico]

Stock prices are based on supply and demand as well as buyer and even seller confidence. The owners of Skywest Inc. stock have lost a bit of confidence due to the last few quarters being below normal SKW performance. Therefore, more share holders are looking to sell their SKW stock which in turn drives the price down because more shares are available to purchase. Keep in mind though that stock price does not have any indication on the company's health. $7.00 x 100,000,000 shares = $700,000,000 vs $100 x 1,000,000 shares = $100,000,000. A low stock price is all relative. Skywest may offer more shares than other airlines which in turn would yield a lower stock price. As for the specific reason why shareholders have lost confidence or want to sell their stock, I could not answer that question. Each shareholder has a different plan for their portfolio and different reasons for buying and selling stocks. Hope this helps.

 

[UncleRico]

To add to my previous post, it is quite possible a large shareholder has decided to sell most of their stock or many small shareholders have decided to sell their stock or a combination of both. Now the question is who wants to buy SKW after a poor earnings call and an uncertain future in an uncertain industry?

 

[777forever]

This is EXACTLY why Pinnacle and or Comair WILL get the new 900's. Look at the historical facts. Start with the Mesaba and NWA history...let's just move ahead 8 years and call it Pinnacle and Delta history since the players are the same. Spanjers, Anderson, everything the same only the names (airline) have changed.

Nwa forces Mesaba in chapter 11 by withholding payments. Mesaba uses chapter 11 to get out of Avro leases, shed pilot and other union labor cost. Also the Big Sky experiment was canned. Sound familiar so far. Just replace Mesaba with Pinnacle, NWA with Delta, Avro's with Saabs,Big Sky with Colgan.

So what happened next? Mesaba was awarded 19 crj 200's and 36 crj 900's, soon to grow to 51 900's.

It's no secrete the Delta wants to get out of 200's. The Delta TA leads us to believe the number is 150. Looking at pinnacle 124 + 19 = 143 hmmm? In my opinion delta will take their own 200's that are leased to pinnacle and dumb those. Why Pinnacle vs. Skywest. The Skywest 200's are exactly that, Skywest's problem why would Delta give them an out when they can use that out for themselves.

Yes because Delta will spend a $1 Billion+ of their own money for planes when Skywest is more than willing to do it....

PNCL and Comair will continue to get the hammer, as Delta more or less controls them. The new 76 seaters will probably be split between Shuttle, Skywest, and ExpressJet.


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