Intelligent comments from Chautauqua CEO

[kngarthur]

Fins,

I agree with your entire post, but this was the paragraph I thought worth quoting. In terms of employee cost structure, Chautauqua is just like Mesa who's just like JetBlue who's just like People's Express. The low labor cost structure is ONLY due to new employees. It will not last, and I do not think Chautauqua's margins are high enough to overcome it. I'm not saying CHQ will implode, but I do think they will be the high cost carrier within a handful of years, and the snowball will start rolling over them, instead of under them.

Its dangerous to base your business on being able to underbid everyone else. Inevitibly somebody is going to underbid you, and you'll have no way to counter it.

You sir are absolutley wrong! Do you come up with this stuff on the spot?

 

[doh]

Here's my take on it. By XJT taking their planes, that means they're going to need to find a place to put them. That also means Continental will need to find new airplanes to replace the ones taken (the artificial demand to which he was referring). So in doing that, instead of everything staying the way it is now, there is now going to be a bunch of RJs introduced into an already saturated 50 seat system. With high fuel prices and decreasing popularity of 50 seaters, we will end up with a surplus of them. Not to mention clogging up the already congested air traffic system resulting in more delays. While this may mean short term benefits for XJT employees in the fact that they won't need to furlough, it very well could be bad for the company and airlines in the long term. History has chosen that airlines who take their airplanes and go elsewhere haven't fared well.
That's what I believe he is saying but I'm sure there are differing opinions.

Okay, but then the reverse also must be true. CHQ is hurting the industry because they are not staying out of this deal. They could leave things alone and CAL could leave the airframes they have in place. Voila, no more artificial demand. But no, CHQ just has to come in and lowball and change the dynamic... and then try to spin the blame for the change onto the XJT folks! WTFO. I'm not saying change won't come, but it is not XJT who initiated this change. They are not to blame, CHQ is.

 

[FlamingFUPA]

They are not to blame, CHQ is.

maybe i'm not understanding you, but are you saying that it is Chautauqua's fault for CAL trying to diversify? you are going to have to do better than that if that is what you are saying.

 

[doh]

Sorry, much too hungover! The wife has just gone back for her 2nd nap. But we did have a good time last night. Anyhoo, the real blame goes back to 1982? or 1983? That is when ALPA allowed the first outsourcing via the Eastern debacle. Now we have the whipsaw, or as management misstates it; "diversification". I acknowledge that this is going to happen. But Bedford is making some whiny little biotch comments about how XJT is harming the industry and I'm not buying. If any one is to "blame" in this specific deal, it is CHQ. See the letter the Teamsters and the CHQ negotiating team put out when last they were in section 6. The gist of it is that CHQ pilots should be paid less so that "we can underbid Comair and take their flying". Obviously, when you go forth with that mentality, other people will be forced to defend their turf. Now, Bedford wants the XJT folks to just assume the fetal position and give him some airframes on the cheap so he can continue to undercut us all. Well gee, let me shed some tears for his biotch @$$... or not, but definitely one of the two.

 

[doh]

I still ain't saying it right. My point is Bedford is the agent of change in this deal. He can't complain about some one else trying to defend themselves from his attack. There, I are dun, except to say that last night really was above and beyond! The consumption of mass quantities was epic. It was irresponsible, immature, and just what the Dr. ordered!

 

[SYX328]

Just remember that CHQ was not the lowest bidder for the service. But anyways go back to bitching and moaning as most of you are good at it.

 

[doh]

Not saying that! They are however one of the agents of change. The other would be CAL. I merely state that when you are attacking XJT, you can't whine if they don't aid you in their demise. Bedford is whining because XJT won't commit suicide in a manner that is aesthetically pleasing to Bedford. XJT is saying, die we might, but it won't be pleasant for you either.

 

[kngarthur]

Huh?
CHQ already operates the E-145 series.

I think he might be talking about CHQ buying Comair?

 

[kngarthur]

Thats funny I heard that delta was going to award the 170 flying to XJT.

Maybe, but the XJET conference call said they are not interested in larger platforms.

 

[kngarthur]

KngArthur,

You and EMB skillz are the two biggest morons on this board, and I wouldn't be surprised if you were the same person. I suppose that would be giving you too much credit. Our management team did not keep those aircraft on an "emotional whim" just so CHQ couldn't have them. I don't think the "I'll keep my toys and go home" approach would be tried by any airline CEO, including your own. Our management has plans for these aircraft, or they wouldn't have made an announcement like this, especially this early. We haven't burned any bridges with CAL, we have bent in every direction to accomadate them, and this is just one more example of that. As far as comparing us to ACA, that is apples and oranges. They had to take a leap of faith, with no other revenue stream to support their endeavor. We still retain 75% of our GUARANTEED operating profit in order to get these other projects off the ground. We have a quarter BILLION in the bank and a very strong balance sheet. We have multiple outside revenue streams, and will probably continue to diversify further. I have confidence in our management, that was one of my chief motivators for coming to ExpressJet. Perhaps I'm the eternal optimist, and am looking through rose colored glasses, but I have a feeling we have good things ahead of us. I officially relinquish the soap box.....

box :beer:

Well I guess we'll find out now won't we?