Could someone smart explain SKYW stock's continual decline?

[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.