Expressjet 8-K

[ROSWELL41]

My friend who is a pilot at Expressjet forwarded me a copy of the Expressjet 8-K which was released late last night/early this morning. I read that Expressjet needs to achieve savings of approximately $100 million USD to be profitable under the new CPA with Continental. The report went on to say that they partially plan to achieve this through force reduction and wage concessions. I was wondering what those of you on the inside have heard about all of this? The 8-K for those of you unfamiliar is an SEC filing by the company.

 

[ReverseSensing]

Here it is.

We will need to aggressively reduce managed expenses under the New CPA as aircraft are removed from service and returned to Continental. In addition to reducing volume-related costs as a result of the decrease in our flying, we will also need to reduce overhead expenses consistent with the operation of a smaller fleet. With 205 aircraft operating under the New CPA, and 245 aircraft in our total fleet, we need to reduce our annual operating costs by approximately $100 million to be profitable. A significant portion of that amount will be volume-driven, but we anticipate that overhead reductions will comprise at least 35% of that amount, which we intend to address through a reduction in force, wage concessions and other expense reductions. There can be no assurance that we will be successful in reducing our expenses or that we will be profitable in the future.

 

[cybourg10]

We will lose 30 135s from the fleet and most likely shut down branded this fall and possibly stop the pro rate flying with Delta. My opinion is all of that should save us the big 100 but if it does not the pilots still will not be taking a paycut. Also, furloughs should not be needed with current attrition and COLAs.

 

[XPOO]

Looks like they are going to have to issue more shares to pay some bills if that stock price keeps plummeting. Currently at $1.31.

 

[10nCLR]

OUCH!!!!!

 

[ROSWELL41]

We will lose 30 135s from the fleet and most likely shut down branded this fall and possibly stop the pro rate flying with Delta. My opinion is all of that should save us the big 100 but if it does not the pilots still will not be taking a paycut. Also, furloughs should not be needed with current attrition and COLAs.

In reading the 8-K, it states that 35% of the savings is expected from force reductions and wage concessions. Perhaps they plan on cutting Flight Attendant or management salaries.

 

[cybourg10]

There are many ways to cut 5% from employees without reducing hourly pay rates. Hopefully we will see some early out offers, COLAs, no fly lines, and mabye even some co-worked lines. We have many other areas where we can be more efficient before we even start to think about wage cuts though. Best of luck to everyone.

 

[sqwkvfr]

A bunch of station managers will be out of work soon...as will their subordinates.

 

[Turtlesfly]

we waste a lot of money that could be trimmed . . . we run the APU all the time when we taxi for no real reason

 

[Bruno82]

Where are the pilots leaving to go?

 

[azpilot]

we waste a lot of money that could be trimmed . . . we run the APU all the time when we taxi for no real reason

Except that it keeps it cooler and more comfortable for our paying customers when we run on a single engine. Plenty of other ways to save gas...

 

[On Your Six]

Time to bring the props back! Beech 1900s for everyone!!!!

 

[Whiskerbizkit]

We will lose 30 135s from the fleet and most likely shut down branded this fall and possibly stop the pro rate flying with Delta. My opinion is all of that should save us the big 100 but if it does not the pilots still will not be taking a paycut. Also, furloughs should not be needed with current attrition and COLAs.

If they park 30 planes and shut down branded, I can't see anything else but some furloughs. Stock closed at 1.24 yesterday, ouch.

 

[Nevets]

If they park 30 planes and shut down branded, I can't see anything else but some furloughs. Stock closed at 1.24 yesterday, ouch.

With the current amount of pilots of 2793, attrition between now and January when the fleet will be down to 245 and the company offering more COLAs, early outs, and leaves for the 40 going to FlyBe along with the union asking for no-fly lines and job-sharing, furloughs may be mitigated substantially.

 

[Nevets]

Looks like they are going to have to issue more shares to pay some bills if that stock price keeps plummeting. Currently at $1.31.

They are proposing issuing stock to pay of the convertible notes due in August. Its just a game of chicken. More than likely those note holders don't want the stock at the current price that will only go down if the stock is issued. They may end up refinancing the notes instead.

 

[CX880]

I just talked to a friend they said furlough is imminent there's no flying.

 

[Fishpaw]

I just talked to a friend they said furlough is imminent there's no flying.

What does "no flying" mean?

 

[BoilerUP]

Just my view on the outside looking in....but pilot concessions, negotiated on the pilot's terms, are much better than the sh!t sandwich of immediate flying and constant job insecurity that Skywest was trying to serve you.

 

[Nevets]

Just my view on the outside looking in....but pilot concessions, negotiated on the pilot's terms, are much better than the sh!t sandwich of immediate flying and constant job insecurity that Skywest was trying to serve you.

I think thats probably the consensus from the inside as well.

 

[Nevets]

I just talked to a friend they said furlough is imminent there's no flying.

I would be surprised if we see any furloughs before September.