Delta/Skywest cuts in SLC

[cfi_greg]

Not at XJT anymore. I would have agreed with you on the buyout about 6 years ago, but I'm not sure SkyWest wants to purchase an airline that has 274 50-seat jets at this point in time. Not much upside to a large 50 seat only operation. XJT has been forced into a position to do pro-rate flying which is a much better deal for Delta so the flying will keep coming XJT's way.

That is the stupidest business plan I have ever heard of. So XJT will keep losing money by flying for delta at cost in order to secure more flying so they can lose even more money. I guess you guys don't have long term goals.

 

[WAVIT Inbound]

Not at XJT anymore. I would have agreed with you on the buyout about 6 years ago, but I'm not sure SkyWest wants to purchase an airline that has 274 50-seat jets at this point in time. Not much upside to a large 50 seat only operation. XJT has been forced into a position to do pro-rate flying which is a much better deal for Delta so the flying will keep coming XJT's way.

A buyout would be to eliminate competition in SLC. Period. I don't think they would really care for the airframes. They belong to Continental anyways.

A side note on Pro-rate. Xjt pays there own fuel on these yes? Do you really think they can keep making money on Pro-rate flying? There is only so much of this that can be done and not bleed red ink. If there was money to be made in pro-rate don't you think more regionals would be doing more of it. I am pretty sure if there was money to be made Skywest would go pro-rate as well to keep all that flying. But hey what do I know? I just fly the planes.

 

[XPOO]

Look...if Delta is STUPID enough to give up the SLC hub, I am fully positive that United would have no problem stepping in. SkyWest would already be set up and United could move right in and Southwest could expand as well.

 

[rickair7777]

Look...if Delta is STUPID enough to give up the SLC hub, I am fully positive that United would have no problem stepping in. SkyWest would already be set up and United could move right in and Southwest could expand as well.

Yeah, the fact is that SKW owns the gates and airplanes, and many of the outstation gates. If DAL packed up and left, SKW would just send the planes to the paint shop for UAX colors.

But I'm certain there's not enough capacity at LAX to absorb all of the SLC DAL flying...unless they want to just give up on the inter-mountain west.

 

[DoinTime]

Look...if Delta is STUPID enough to give up the SLC hub, I am fully positive that United would have no problem stepping in. SkyWest would already be set up and United could move right in and Southwest could expand as well.

Right.....I bet United is waiting with baited breath to open up another hub right next door to Denver.

 

[Truckdriver]

That is the stupidest business plan I have ever heard of. So XJT will keep losing money by flying for delta at cost in order to secure more flying so they can lose even more money. I guess you guys don't have long term goals.

I agree with you that it is a stupid business plan. Compared to a CPA which guarantees a certain margin, the pro-rate deals just plain suck for the regional carriers. It is also not at cost, it is just a risk based deal where XJT and Delta share the risk on loads and fuel. If the planes are full then XJT does make money. As far as Delta is concerned, the pro-rate deal is the best thing they have ever seen. If they have the opportunity to shift flying from CPA deals into pro-rate deals they will do it in a heartbeat. I'm no longer at XJT so it really doesn't effect me, but I do think any more 50-seat Delta flying out of SLC will go to XJT on a pro-rate basis.

 

[Truckdriver]

A buyout would be to eliminate competition in SLC. Period. I don't think they would really care for the airframes. They belong to Continental anyways.

You are correct, Continental leases the airframes then subleases them to XJT. SkyWest could buy XJT then give all the airplanes back to CAL.

A side note on Pro-rate. Xjt pays there own fuel on these yes? Do you really think they can keep making money on Pro-rate flying? There is only so much of this that can be done and not bleed red ink. If there was money to be made in pro-rate don't you think more regionals would be doing more of it. I am pretty sure if there was money to be made Skywest would go pro-rate as well to keep all that flying. But hey what do I know? I just fly the planes.

XJT has been forced into the pro-rate flying due to the politics going on at CAL. No regional would choose to do pro-rate flying over CPA flying if the CPA flying is under a guaranteed margin. SkyWest is in a better position to make money because the flying they do is CPA flying. With XJT doing pro-rate flying, SkyWest will have to reduce the margins they get from CPA flying or do it pro-rate as well to keep XJT from getting that flying. I doubt any regional will start doing pro-rate flying without being forced into it like XJT was. Is it a good thing for XJT, not in my opinion. Is it a good thing for Delta, absolutely. Not saying one company is better than the other, it is just much cheaper for Delta to use XJT now than it is SkyWest.

 

[cfi_greg]

XJT has been forced into the pro-rate flying due to the politics going on at CAL. No regional would choose to do pro-rate flying over CPA flying if the CPA flying is under a guaranteed margin. SkyWest is in a better position to make money because the flying they do is CPA flying. With XJT doing pro-rate flying, SkyWest will have to reduce the margins they get from CPA flying or do it pro-rate as well to keep XJT from getting that flying. I doubt any regional will start doing pro-rate flying without being forced into it like XJT was. Is it a good thing for XJT, not in my opinion. Is it a good thing for Delta, absolutely. Not saying one company is better than the other, it is just much cheaper for Delta to use XJT now than it is SkyWest.

How long will they keep losing money though?

 

[Speedtape]

The merger should be announced next week!

SLC HUB POST-MERGER SONG

 

[Pogue Mahone]

The merger should be announced next week!

SLC HUB POST-MERGER SONG

Hey brother. How the heck are you. Give me a call! Finally back on the line.

 

[BeachBummer]

That is the stupidest business plan I have ever heard of. So XJT will keep losing money by flying for delta at cost in order to secure more flying so they can lose even more money. I guess you guys don't have long term goals.

Delta flying is very proffitable for us at XJT. We are not making as much on it as the CoEx side but making money non the less. We are losing $$ with the branded stuff, but those routes are changing soon. I don't think that they would be adding more planes if they were not making any cash...

 

[Speedtape]

Delta flying is very proffitable for us at XJT. We are not making as much on it as the CoEx side but making money non the less. We are losing $$ with the branded stuff, but those routes are changing soon. I don't think that they would be adding more planes if they were not making any cash...

THE ASA PILOTS IN DFW WERE TELLING US THE SAME THING IN ATL right up until the day that the DFW closing was announced. The only hub that makes money is ATL. The yields in the West are way too low because of the competition of the low cost carriers.

 

[Truckdriver]

How long will they keep losing money though?

They actually make money on the pro-rate Delta flying although it is nothing like they make with the CAL CPA. The sinking of the XJT ship is going to be the branded flying and that is what Hayman is trying to get them to ditch. I think they will move branded planes into pro-rate if they can and it looks like Delta may give them that opportunity. UAL is also testing the XJT waters so they may get some over there on a longer term basis after this deal in March. The other big question is what happens in two years when CAL can send out another 25% of the CAL flying for bid. XJT has some serious issues and it appears as if the branded stuff is not the answer they thought it was going to be. I might actually change my original statement and say that a SkyWest buyout may happen. They would probably just let CAL take the airframes back that they don't want. Wouldn't take alot of money to get XJT right now with the current stock price and Hayman on their side.

 

[BeachBummer]

THE ASA PILOTS IN DFW WERE TELLING US THE SAME THING IN ATL right up until the day that the DFW closing was announced. The only hub that makes money is ATL. The yields in the West are way too low because of the competition of the low cost carriers.

I guess you'll have to listen to all us Xjeters as we add more planes out west and make money on our pro rate... until they close LAX down.... bummer.......Jeeeeeesssssh

Can I see the crystal ball you have...........

wait......... HAHAHAHAHA! lighten up dude

 

[Speedtape]

Lax, as a hub, is probably safe. However, it is rumored that Xjet only has a 2 year contract which ends a little over a year from now. Maybe, it will be renewed. Or maybe, SkyWest will be your competitor and replacement. That call is not in focus.

Sorry, you can't see my crystal ball..........

After the merge, there will be no need for 3 hubs which now would include LAX (DL), SEA (gateway for NWA), and SLC (DL). That does not take a crystal ball. Even if the merger fails, if SLC cannot support international flights, SLC will not be a hub for DL. The SLC/Paris run, starting in the next month or so, will be the first test. DL's focus is on high yield international flights that tend to be less cyclical than domestic. With the dollar so weak, there is strong traffic to and from Europe. But domestic feed is also important for those flights.

 

[amcnd]

SLC is a money maker. Ive seen the numbers. SLC makes most of its money in the spring. I don't think it's going anywere.

 

[Jon Rivoli]

So what I'm reading hear is that XJet is dragging the regional industry down, underbidding everybody just to find work for their planes?

 

[14RF SUX]

Lax, as a hub, is probably safe. However, it is rumored that Xjet only has a 2 year contract which ends a little over a year from now. Maybe, it will be renewed. Or maybe, SkyWest will be your competitor and replacement. That call is not in focus.

Sorry, you can't see my crystal ball..........

After the merge, there will be no need for 3 hubs which now would include LAX (DL), SEA (gateway for NWA), and SLC (DL). That does not take a crystal ball. Even if the merger fails, if SLC cannot support international flights, SLC will not be a hub for DL. The SLC/Paris run, starting in the next month or so, will be the first test. DL's focus is on high yield international flights that tend to be less cyclical than domestic. With the dollar so weak, there is strong traffic to and from Europe. But domestic feed is also important for those flights.

Thanks Frank.

 

[Superpilot92]

So what I'm reading hear is that XJet is dragging the regional industry down, underbidding everybody just to find work for their planes?

LOL thanks for the laugh LOL:laugh:

In the past all flying was done the same way XJT is doing the DAL deal. It wasn't that long ago that CPA's started. Considering XJT pilots are one of the highest paid 50 seat airlines out there i would hardly say they are bringing the industry down. In fact their pay runs right up there with your 70+ seat pay, chew on that a little bit.

 

[sweptback]

SLC is a money maker. Ive seen the numbers. SLC makes most of its money in the spring. I don't think it's going anywere.

I doubt you've actually seen the numbers, unless you work at the DAL GO on Virginia Ave. All of Delta's hubs are losing money right now... CVG is currently leading the list. Even mighty ATL is not performing well right now.