rtmcfi
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Listen to Jerry Atkin
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SpyFlysDOTs
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Look, I "Aint" the best typist in the world, but here goes..I did take the liberty to combine a few words, so this is NOT verbatim. Also, my spelling sucks!:
Couple hundred jets worth of growth next 2-3 years
Spread out cross USA
No one has lower unit costs
Strong balance sheet for growth, finance aircraft for lower costs than competitors
SkyWest and ASA
ASA sept 7 2005
For Delta and SkyW
SkyW 15 year contract for both, and ability to place ac where they would do best, and stay cost competitive
Delta operator that will improve quality, reduce cost, remain competitive, and we would be better than Delta would be.
They got 425 Million at crucial time
assurance contracturally 50% capacity of new growth by being cost competitive
26 most gates at ATL direct lease with Delta is not involved.
ASA since 79 ATL smaller CVG SLC over a billion in revenue, 153 aircraft
Savings of operating 2 is motive.
Back office and IT was provided by contract, instead of inhouse.
5 million a year savings by doing this inhouse 3-5 year target to have cost same at ASA
Seperately, two quite sizeable entities.
Smaller leadership group in dif locations would be better, with employees, rather than have big headquarters away from operations, we are operating them seperately, while developing best practices.
We are geographically diverse, when we bid onnew work, we have maint and ground either near or in place can can be on shared basis for existing and for potential new partner that we will do biz with.
Went over route map.ASA SkyW, etc etc.
90% at ATL 90% at SLC less at CVG Delta
Fleet 380 in 2005
2006 9 900's eventually 76 seats, 92-700's 235 200' 12 atrs 61 EMBs.
Does not estimate any guess at new flying that we may book that will actually come on in 2007. We are optomistic it will be higher in 2007.
2350 flights a day.
15,000 employees
395 ac 267 cities
Regional jet advantage, right size AC for market/ Unit cost on 70/76 seat ac, and turboprop..All markets can't support 140 seat ac
Most people on regionals are good paying passengers, vs, 140 seat where 30-40 are good paying, and the rest are discounted...its about matching it up.
Feed into overseas flights, objective seamless part of network.
Objectives (4)
1 highest qual
2 lowest cost
3 best place to work
4 best investment
Most ontime mainland 2003, 4, 5
Recognized by many on quality.
13650 full time
3900 pilots
750 mechanic
2150 inflight
Competitve pay and base rate, on lower cost side, supplements with profit sharing package, part of why employees are enthuses about their job, based on financial
5.6 Million dollars worth of stock
Grants of stock for employees over 3 years
No unions at Skywest.
negotiating with contract unions to bring these bonuses there.
Major partners, 50% larger than anyone else with United
First one with signed contract with United after their bankrupcy.
First one with Delta with a firm contract after bancrupcy.
Spent 2 years with CAL talk about that later.
We are a top bidder cause we are good at this.
ASA is an important aquisition, as it made our relationship with Delta.
We are well positioned in ATL, even thought we believe Delta will be in good position is anything happens with Delta in ATL.
we bid for 38% of the cost, other 62% pass thru ac cost
Fuel, landing fees, ramp, all passthru.
We are at risk for Labor, overhead, maint, and a fixed amount for other items. we give them the flexibility to move us around, they take the risk on fuel costs and they set the pricing.
Contract are long term, based on staying cost competitive 96% under contract, 4% risk flying.
42% ual, 58% Delta
ASA revenue and profitibility effective Sept 7th and then beyond.
Financial results q 1 quite good.
best balance sheet in industry... important from flex standpoint and financing we paid cash for ASA we still have a cash balance quite healthy, we brought on long term debt with ASA, since march, 2ndary offering, with stock, 90 million dollars drawdown, which is paid off or nearly paid off, so we can keep interest cost low and be in position for growth in next year.
Appreciable opportunites for network carriers with small jets. Expecting on adding one or two codeshare partners..discussions on exceeding 200 airplanes, most are in 70/76 some are potentially in turboprop, and some in 50 seat aircraft..and with confidentiallity agreements, this involves 3 carriers that we dont do business with and ones which we do. We are also considering larger aircraft, maybe not in the USA.
Aqusition op[portunities, we are not on an aquisition binge.
Question, Express yet 69 planes?
Does it open door for SkyW?
does it open up opportunities in EWR IAH.
jerry: yes, yes, yes and yes.
He believed republic would respond, but X jet kept airplanes, so CAL started the negotiations over, and with so many CRJ 200s avail, it may have increased our chances at getting the contract, and shorter haul turboprop opportunities all over.
Q : You own 33% of your planes, to what extent do other carriers control leases on your planes? Can they cancel leases?
Short answer NO. All are either owned by SKyW or leased by SkyW, only one exception, when we purchased ASA we were worried about 50 seater ASA so we asked them to own 40 of the 50 and lease them directly to us. Contracturally they are leased to us on a long term basis, after lease is up, they could come back, and change the terms, but this was at our request.
Q Came out today with good load factors, but company doesnt benefit, due to fixed fee, so you need to add flights or ac to add to margin..As an outsider, can we judge what will happen in future when you add flights?
Ans, Load factor doesnt add to profit, but we sleep better with high load factors.
Its based on how many units, we can do cost reduction, but the cost is so competitive today, it puts us in a better position to get better worth. We did a contract with UAL in BK, that was one of the first with major cost reductions, and we did one with Delta last year, and the margins have been competitive and havent moved around much, since 2003. As of today, they havent changed much in past 2-3 years, what will happen in future is anyone's guess. Some that we are bidding on could be owned by major partners..margin may be different if someone is taking the risk of the aircraft.
Q. Costs, you and two competitors say lowest cost, what competitive edge do you have?
A, there are three that are the same, dont believe any of the three have a cost advantage, we may gain a little after merging..reported cost go all over chart, cause we have dif ground handling that may be above others..but cost are much the same.
Couple hundred jets worth of growth next 2-3 years
Spread out cross USA
No one has lower unit costs
Strong balance sheet for growth, finance aircraft for lower costs than competitors
SkyWest and ASA
ASA sept 7 2005
For Delta and SkyW
SkyW 15 year contract for both, and ability to place ac where they would do best, and stay cost competitive
Delta operator that will improve quality, reduce cost, remain competitive, and we would be better than Delta would be.
They got 425 Million at crucial time
assurance contracturally 50% capacity of new growth by being cost competitive
26 most gates at ATL direct lease with Delta is not involved.
ASA since 79 ATL smaller CVG SLC over a billion in revenue, 153 aircraft
Savings of operating 2 is motive.
Back office and IT was provided by contract, instead of inhouse.
5 million a year savings by doing this inhouse 3-5 year target to have cost same at ASA
Seperately, two quite sizeable entities.
Smaller leadership group in dif locations would be better, with employees, rather than have big headquarters away from operations, we are operating them seperately, while developing best practices.
We are geographically diverse, when we bid onnew work, we have maint and ground either near or in place can can be on shared basis for existing and for potential new partner that we will do biz with.
Went over route map.ASA SkyW, etc etc.
90% at ATL 90% at SLC less at CVG Delta
Fleet 380 in 2005
2006 9 900's eventually 76 seats, 92-700's 235 200' 12 atrs 61 EMBs.
Does not estimate any guess at new flying that we may book that will actually come on in 2007. We are optomistic it will be higher in 2007.
2350 flights a day.
15,000 employees
395 ac 267 cities
Regional jet advantage, right size AC for market/ Unit cost on 70/76 seat ac, and turboprop..All markets can't support 140 seat ac
Most people on regionals are good paying passengers, vs, 140 seat where 30-40 are good paying, and the rest are discounted...its about matching it up.
Feed into overseas flights, objective seamless part of network.
Objectives (4)
1 highest qual
2 lowest cost
3 best place to work
4 best investment
Most ontime mainland 2003, 4, 5
Recognized by many on quality.
13650 full time
3900 pilots
750 mechanic
2150 inflight
Competitve pay and base rate, on lower cost side, supplements with profit sharing package, part of why employees are enthuses about their job, based on financial
5.6 Million dollars worth of stock
Grants of stock for employees over 3 years
No unions at Skywest.
negotiating with contract unions to bring these bonuses there.
Major partners, 50% larger than anyone else with United
First one with signed contract with United after their bankrupcy.
First one with Delta with a firm contract after bancrupcy.
Spent 2 years with CAL talk about that later.
We are a top bidder cause we are good at this.
ASA is an important aquisition, as it made our relationship with Delta.
We are well positioned in ATL, even thought we believe Delta will be in good position is anything happens with Delta in ATL.
we bid for 38% of the cost, other 62% pass thru ac cost
Fuel, landing fees, ramp, all passthru.
We are at risk for Labor, overhead, maint, and a fixed amount for other items. we give them the flexibility to move us around, they take the risk on fuel costs and they set the pricing.
Contract are long term, based on staying cost competitive 96% under contract, 4% risk flying.
42% ual, 58% Delta
ASA revenue and profitibility effective Sept 7th and then beyond.
Financial results q 1 quite good.
best balance sheet in industry... important from flex standpoint and financing we paid cash for ASA we still have a cash balance quite healthy, we brought on long term debt with ASA, since march, 2ndary offering, with stock, 90 million dollars drawdown, which is paid off or nearly paid off, so we can keep interest cost low and be in position for growth in next year.
Appreciable opportunites for network carriers with small jets. Expecting on adding one or two codeshare partners..discussions on exceeding 200 airplanes, most are in 70/76 some are potentially in turboprop, and some in 50 seat aircraft..and with confidentiallity agreements, this involves 3 carriers that we dont do business with and ones which we do. We are also considering larger aircraft, maybe not in the USA.
Aqusition op[portunities, we are not on an aquisition binge.
Question, Express yet 69 planes?
Does it open door for SkyW?
does it open up opportunities in EWR IAH.
jerry: yes, yes, yes and yes.
He believed republic would respond, but X jet kept airplanes, so CAL started the negotiations over, and with so many CRJ 200s avail, it may have increased our chances at getting the contract, and shorter haul turboprop opportunities all over.
Q : You own 33% of your planes, to what extent do other carriers control leases on your planes? Can they cancel leases?
Short answer NO. All are either owned by SKyW or leased by SkyW, only one exception, when we purchased ASA we were worried about 50 seater ASA so we asked them to own 40 of the 50 and lease them directly to us. Contracturally they are leased to us on a long term basis, after lease is up, they could come back, and change the terms, but this was at our request.
Q Came out today with good load factors, but company doesnt benefit, due to fixed fee, so you need to add flights or ac to add to margin..As an outsider, can we judge what will happen in future when you add flights?
Ans, Load factor doesnt add to profit, but we sleep better with high load factors.
Its based on how many units, we can do cost reduction, but the cost is so competitive today, it puts us in a better position to get better worth. We did a contract with UAL in BK, that was one of the first with major cost reductions, and we did one with Delta last year, and the margins have been competitive and havent moved around much, since 2003. As of today, they havent changed much in past 2-3 years, what will happen in future is anyone's guess. Some that we are bidding on could be owned by major partners..margin may be different if someone is taking the risk of the aircraft.
Q. Costs, you and two competitors say lowest cost, what competitive edge do you have?
A, there are three that are the same, dont believe any of the three have a cost advantage, we may gain a little after merging..reported cost go all over chart, cause we have dif ground handling that may be above others..but cost are much the same.
-Skywest is competitive with their bids for new flying.
-There are open bids for flying out there with 3 network carriers Skywest doen't do business with.
-50% of all DCI grotwth goes to Skywest Inc.
-Skywest Inc currently flies around 90% DCI flights out of ATL.
-ASA over billion dollars in revenue (I swear he said it...maybe he meant Skywest Inc.)
-Skywest owns 33% of a/c it operates
-40 50 seaters at ASA are on lease from DAL
-Potential growth of 200 a/c within the next year...all growth will be in the 70/76 mixed cabin a/c also in the large turbo prop markets
- No one has lower unit cost to compete with Skywest Inc.
- Cost savings motives for ASA aquisition were/are IT and Finance. Current savings so far 5 million per year
-There are open bids for flying out there with 3 network carriers Skywest doen't do business with.
-50% of all DCI grotwth goes to Skywest Inc.
-Skywest Inc currently flies around 90% DCI flights out of ATL.
-ASA over billion dollars in revenue (I swear he said it...maybe he meant Skywest Inc.)
-Skywest owns 33% of a/c it operates
-40 50 seaters at ASA are on lease from DAL
-Potential growth of 200 a/c within the next year...all growth will be in the 70/76 mixed cabin a/c also in the large turbo prop markets
- No one has lower unit cost to compete with Skywest Inc.
- Cost savings motives for ASA aquisition were/are IT and Finance. Current savings so far 5 million per year
ReportCanoa
I'm fly in any weather
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- Posts
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I thought it was interestng
He was asked on the last question "what advantage does skywest inc. have over the other competitors that allows him to claim they are the lowest cost contract carrier, since the others(republic/mesa) claim the exact same thing?
His answer was a clarification. He claimed that as of now they are all equal in cost with none having an advantage big enough to see in numbers. He also said, that he can honestly say no other carrier has lower cost. Both of these statement being a play on words. Tooting their own horn.
He added at the last point that, "what we are currently doing at ASA may give us an advantage in the future"
Interesting!
Medeco
He was asked on the last question "what advantage does skywest inc. have over the other competitors that allows him to claim they are the lowest cost contract carrier, since the others(republic/mesa) claim the exact same thing?
His answer was a clarification. He claimed that as of now they are all equal in cost with none having an advantage big enough to see in numbers. He also said, that he can honestly say no other carrier has lower cost. Both of these statement being a play on words. Tooting their own horn.
He added at the last point that, "what we are currently doing at ASA may give us an advantage in the future"
Interesting!
Medeco
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SpyFlysDOTs
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HarryParatestes
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~~~^~~~
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SkyWest is well positioned to bid on over 200 new aircraft opportunities in the future. These advantages are:
Step 2 will be a smaller leadership group focused where the rubber meets the road – we are still improving ASA’s costs and will be there in three years.
Fleet:
2005 – 380 Aircraft
77-70 Seat
229-50 Seat
12-ATR
62-E120
2006 – 395 Aircraft
9-90 Seat (Configured with FC with fewer than 90 seats)
92-70 Seat Aircraft (all already delivered)
235-50 Seat
12-ATR
61-E120
Advantages of the RJ
We bid for roughly 32% of the costs, having to do with the cost of labor and equipment. 62% of the costs, like fuel are passed through. Skywests “best” balance sheet results in lower financing costs on aircraft.
Future:
Hoping to land contracts with one or two more codeshare partners which would exceed an additional 200 aircraft, mostly in the 79 to 90 seat jet range. Also there are opportunities for large turboprop aircraft and 50 seat jets to absorb some now in storage. Is bidding for three network carriers and looking to operate larger aircraft outside the United States.
Skywest is not on an acquisition binge.
Q&A:
Continental Flying –
Republic got the bid because it was thought they would use the Continental RJ’s and already had trained crews. Now contract is opened back up again because Express Jet is holding the aircraft back. Skywest has a bid in and also has excess 50 seat CRJ aircraft they could use.
Skywest’s Aircraft Ownership –
Skywest does not have their aircraft encumbered like Continental’s E145’s. However, due to the fear of a 50 seat glut, 40 of ASA’s 50 seaters are leased by Delta and sub leased to ASA.
Follow up on “lowest cost” claim –
All three of the main small jet bidders have essentially the same costs. If you look at reports these costs will be all over the place due to ground handling agreements and other factors, but as far as aircraft operation and bidding goes, the costs are essentially the same.
- Geographic diversity
- No one has lower unit costs
- Strong Balance Sheet – results in lower financing costs
- 15 year contract
- Ability to transfer aircraft where they make the most sense, improving quality and cost
- ASA / Skywest gets 50% of new growth as virtue of the contract
Step 2 will be a smaller leadership group focused where the rubber meets the road – we are still improving ASA’s costs and will be there in three years.
Fleet:
2005 – 380 Aircraft
77-70 Seat
229-50 Seat
12-ATR
62-E120
2006 – 395 Aircraft
9-90 Seat (Configured with FC with fewer than 90 seats)
92-70 Seat Aircraft (all already delivered)
235-50 Seat
12-ATR
61-E120
Advantages of the RJ
- Right sized
- Effective Unit Costs
- Fills a big gap – the smallest mainline aircraft are 140 seats
- Frequency
- Unit Revenue can be optimized to catch the higher revenue passengers
- Helps mainline gain and protect market share
- Helps mainline gain and protect feed for international operations
- Expanding network reach
- To be the best quality operator
- Lowest cost
- Best place to work (3,900 pilots, 13,650 employees)
- “We believe we partner better with our employees than any other airline.” We have the best profit sharing an equity sharing making employees enthusiastic about our operational performance.
We bid for roughly 32% of the costs, having to do with the cost of labor and equipment. 62% of the costs, like fuel are passed through. Skywests “best” balance sheet results in lower financing costs on aircraft.
Future:
Hoping to land contracts with one or two more codeshare partners which would exceed an additional 200 aircraft, mostly in the 79 to 90 seat jet range. Also there are opportunities for large turboprop aircraft and 50 seat jets to absorb some now in storage. Is bidding for three network carriers and looking to operate larger aircraft outside the United States.
Skywest is not on an acquisition binge.
Q&A:
Continental Flying –
Republic got the bid because it was thought they would use the Continental RJ’s and already had trained crews. Now contract is opened back up again because Express Jet is holding the aircraft back. Skywest has a bid in and also has excess 50 seat CRJ aircraft they could use.
Skywest’s Aircraft Ownership –
Skywest does not have their aircraft encumbered like Continental’s E145’s. However, due to the fear of a 50 seat glut, 40 of ASA’s 50 seaters are leased by Delta and sub leased to ASA.
Follow up on “lowest cost” claim –
All three of the main small jet bidders have essentially the same costs. If you look at reports these costs will be all over the place due to ground handling agreements and other factors, but as far as aircraft operation and bidding goes, the costs are essentially the same.
SKYWRJGUY
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- Posts
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None...comment only.
Wtf....200? Too bad the company can't afford to give a proper raise, especially on the forward-looking growth in the 70-76 seat market (especially with the 'lower costs' of the turboprops)...I'd hate for us to go the way of Air Ghana or that 206 operator in Equitorial Guinea.
Wtf....200? Too bad the company can't afford to give a proper raise, especially on the forward-looking growth in the 70-76 seat market (especially with the 'lower costs' of the turboprops)...I'd hate for us to go the way of Air Ghana or that 206 operator in Equitorial Guinea.
Last edited:
SpyFlysDOTs
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So a lot more 70-76 seat aircraft? Hmmmmm and yet he wants us to take a paycut BACKWARDS to the 50 pay....riiiiiiiiight!! NOT GOING TO HAPPEN!!
ilinipilot
Barely awake in Training
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