Hoeksema's right, AAI's business plan is failing

[Lear70]

Oh yeah....and I'm drunk right now

Yeah, I might have posted here once or twice like that... :beer:

Please don't get us wrong... many of us have friends at Midwest and you guys do a GREAT job, have a fantastic product, and great customer service as well.

It's just amusing to many of us that, from a business standpoint, it's a great deal. From a management standpoint, i.e. Hoeksema losing his job, it sucks, and we're amused as he keeps making statements that play out to be false.

Not trying to bash anyone (except for maybe him and Skornica).

Sorry for any perceived rudeness.

 

[EX_CV580FR8Dawg]

He used to be V.P. of flight ops of Midwest but now is the CEO of Skyway. Teflon Dave I call him. Screws up the ramp and now understaffs skyway costing us bigtime. He must have something on Tim to keep his job after these screw ups.

It was sad to see A.F. get the boot and not Teflon Don..I mean Dave. Isn't he like 127yrs old?

 

[Flydaplane]

To: All Midwest and Skyway Airlines Employees
Date: April 26, 2007
From: T.E. Hoeksema
Subject: First Quarter 2007 Financial Results

Today we are releasing our first quarter 2007 financial results, which follow.

While we reported net income of $8.0 million for the quarter, that number was positively impacted by a required accounting adjustment of $19.9 million for fuel contracts we entered into in the quarter. Excluding that adjustment, the quarter fell short of our expectations.

Okay, I failed airline math 101, can anyone clarify this for me--What the heck is an accounting adjustment of $19.9 million and where did that money come from? Did we make money or did we cash advance ourselves $19.9 million for fuel hedges and thus resulted in an $8 million dollar profit? If we hadn't "adjusted" for $19.9 million would we have lost $11.9 million?

 

[FlyWolf]

Very good questions Flydaplane. I just listened to the webcast and still don't understand where the 19.9 Million came from.

Oh did you see this article from Airtran? might answer some questions

http://biz.yahoo.com/prnews/070426/nyth138m.html?.v=1

edit: Just talked to someone who knows a bit more about this stuff, he said that that is exactly what SWA have been doing over the years with fuel hedges, Midwest mentioned its already talking about hedges beyond 2007

 

[gt1900]

HMMMMM.... A required accounting adjustment??? Its simple boys, Midex had an operating loss of around 13 million... If it was an operating profit of 8 million old Timmey would have never let the chance to bash AAI again get away.... Throw out all the legal mumbel jumbel and its pretty easy, even though thier wording may be grey.. Midex got their @sses handed to them 1st quarter, simple as that... And I think Hoeksema knows it.. BTW.. You might wanna watch and see how many shares get tindered.. I think this time around its gonna really suprise some people..

 

[TV9Driver]

gt1900,

i'm an AAI guy and all, but take it down a notch. Also, spell check does wonders....

 

[mnboyev]

Simmer down now.....who cares...give it a rest....

Who's been out crappie fishin?

Sometimes you make some dough sometimes you don't...easy.....crappie minnows are getting pretty spendy!!!

Fly Safe !!!

 

[gt1900]

Wasn't trying to get crazy. Just pointing out the fact that if it was a "real" 8 million dollar gain, Hoeksema would be shouting it out.. And he would have a very good reason to.. However, its a 13 million dollar loss that has been twisted to make the numbers look good. That pisses me off because of all the crap hes talked about AAI's business plan being broken ... And your right, im not an english major, thats why I becameand airline pilot.. But I also don't care about spelling on these boards..

 

[CitationLover]

since it's just a gimmick, let me know if you figure it out.

http://www.kellogg.northwestern.edu/research/fimrc/papers/jet_fuel.pdf

if anyone really knows please pipe up, but i am assuming these are marked to market accounting (ie realizing the gain). if it is, it's no more gimmicky than an aircraft amortization schedule.

i was surprised to see that a lot of time was spent on the "lack of crews" for skyway.

 

[Lear70]

i was surprised to see that a lot of time was spent on the "lack of crews" for skyway.

I'm not.

Told you it would be. He knows that's the main source of concern for the shareholders; especially since THAT'S his "BIG PLAN" to grow the airline right now. Yet that side of the house lost the most money. Gotta blame it on someone, might as well be the crews, right?

The one-time accounting for a low-price jet fuel purchase is great. I wish all our guys could negotiate some good deals like that, but it begs the question:

How long of a period does that one-time accounting entry cover?

For instance, if you lose $12 Million a quarter, and the one-time fuel purchase made you $20 Million (rough numbers) but is stretched over a year, you're actually only up $5 Million for the quarter and still a $7 Million loss when amortized over the length of the fuel contract (assuming you fly roughly the same number of block hours each quarter give or take a couple percentage points).

If it's a repeatable event, I'd say Timmy did good.

If it's not, it's just a way to spin the loss for the quarter into something better so the wolves aren't howling for blood at the board meeting.