Could someone smart explain SKYW stock's continual decline?

[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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[Stifler's Mom]

Of the LITERALLY thousands of stocks listed on the DOW and NASDAQ, why would you want to invest in the airline industry, let alone a regional airline? We're all a terrorist attack, SARS outbreak, oil spike, merger/buyout, failed RFP away from a disaster financially.

Unless you like the high returns of speculation, there seem to be too many uncontrollable aspects of this industry.

 

[thepotato232]

To be honest, if you're expecting smart reasons for SKW's stock being in the toilet, I'm not entirely sure you have a realistic perception of the stock market. The average investor is a panicky, misinformed creature. The average investor has been told that gas costs a lot, and that SKW is not one of the airline companies that posted crazy turnaround profits in recent history. The relatively savvy investor is also aware that 50-seat jets are a vaguely bad thing. Code shares and lease returns are things that should be on every regional airline investor's radar, but I doubt they are.

What success I've had in the stock market has been because of my expectation that the market moves first and foremost on speculation and hype. Neither of those are working in SKW's favor at the moment. If you're an OO employee, don't take it as an indicator of your company's decline without really looking around first.

 

[777forever]

Hell, Apple stock dropped to $531 recently after hitting a high of $641 not too long ago. SKW sock, like Apple, will bounce back


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[jws717]

SKYW stock has been a growth stock for the last 15 years. They have now matured and investors are moving money into the next growth stock. A second reason is, the stock market has had a bad month.

 

[Sherpa]

Other regionals entering CH.11, SKYW Inc's adamant position on the 50 seat RJ, and the recent performance all hit the value but when you consider the liquidity with cash on hand and current contracts it's probably undervalued. Their purchase power and economy of scale will help eek out a profit now that the merger is nearing completion at Xjet. Still, who in their right mind puts money on an airline? That's crazy talk! All these companys fighting for scraps that are diminishing duration, probably still some correcting to be done with the business models at the regionals, especially the guys running lean to capture new flying. We'll see if the gamble payed off in the next couple years. It's all about making money and right now, they suck at that.

 

[jetstream]

Uh...it's going down because Delta just loaned $75 million to bankrupt Pinnacle in exchange for them doing the flying at below cost rates. Pinnacle will do the work at below cost and Delta will funnel them money to keep them afloat, but just barely. How can anyone compete with that?

Any additional airplanes will go there.

Delta is a mother wolf eating her young.

 

[Stifler's Mom]

Hell, Apple stock dropped to $531 recently after hitting a high of $641 not too long ago. SKW sock, like Apple, will bounce back


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Bounce back to what???? SKYW is currently at its 52-week low. I just pulled up a 10-year historical chart for SKYW. It is appears to be currently at the lowest it has been in the past decade!!!!!

7.21

 

[JustaNumber]

Uh...it's going down because Delta just loaned $75 million to bankrupt Pinnacle in exchange for them doing the flying at below cost rates. Pinnacle will do the work at below cost and Delta will funnel them money to keep them afloat, but just barely. How can anyone compete with that?

Any additional airplanes will go there.

Delta is a mother wolf eating her young.

Ain't that the truth. Also, note that all of this is possible mainly because of government intervention in the free market. Get rid of the market-distorting Chapter 11 process, and any airline that bids below cost "to get a foot in the door" would go out of business, not be rewarded with new contracts. Then the free market would determine the ACTUAL cost of doing business.

 

[wms]

http://m.sltrib.com/sltrib/mobile/54125064-79/skywest-airlines-regional-industry.html.csp

A good explanation of what has been happening with Skywest and the industry. A key point is that the regionals must again focus on taking control of their revenues, not just their costs, ie, code sharing, etc. Skywest has been exploring and moving ahead with these strategies and has the capital and infrastructure in place to do this when the time and circumstances are right.

NOT branded flying, but controlling its own flying through code share partnerships with the current and potential mainline partners.

 

[Ridgeback]

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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Yes Delta will. I see you really don't understand how Anderson at Delta works. Your used to the old Delta management. You first have to understand Anderson's leadership and vision. To do that you only have to look so far as his history with NWA. It's a tell...to use poker language. He want's TOTAL CONTROL of his regionals with out "really" owning them. So far he has gotten rid of freedom, tried to get rid of Pinnacle's 16 900's as soon as they announced the "Q" deal with Unical. Forced pinnacle in bankruptcy...just as he did with Mesaba, who was going out on their own with Big Sky. Even the DIP financing stated why use Delta Dollars to support the competition, in the form of the "Q" operation. What's the first thing Pinnacle did when they got the DIP. Used chapter 11 to get out of the Q's and saabs. Big surprise they flew for Delta's competition in the form of Unical and USair.

I could go on and on and site you other examples of Delta's transformation into NWA like code share growth, joint ventures, ect.