NWA looking for new regional partner

[Mel Sharples]

This is a 100% incorrect statement. There are no contractual terms on the addition of this new flying. The NWA MEC used this scenario in publications and roadshows to make the NW pilots feel a little better about f*cking PCL and XJ pilots over. This scenario has evolved into urban legend among mainliners. I guess its true that if you tell the same lie long enough it eventually becomes true.

I agree as well. I keep hearing from mainline guys that "if Pinnacle and Mesaba could buy 40 jets, they could get the flying." Umm... not true. Mesaba has $160 million in the bank and all that money couldn't buy us this flying.

Like you said, another aviation "urban legend."

 

[Redtailer]

I agree as well. I keep hearing from mainline guys that "if Pinnacle and Mesaba could buy 40 jets, they could get the flying." Umm... not true. Mesaba has $160 million in the bank and all that money couldn't buy us this flying.

Like you said, another aviation "urban legend."

Mel,

Once again you've shown how you say stuff that sounds nice but lacks substance.

RJs run at a minimum of $15 mil per copy. More than likely twice that number. I will be generous and say $20 mil. Multiply that times 40 and that is $800 Mil dollars!!

How do you propose MSA buy those jets with only $160 mil in the bank??? No one would give you that type of a loan for your size. You couldn't even buy 8 RJs without bankrupting the company.

good grief!!!!

 

[Mel Sharples]

Mel,

Once again you've shown how you say stuff that sounds nice but lacks substance.

RJs run at a minimum of $15 mil per copy. More than likely twice that number. I will be generous and say $20 mil. Multiply that times 40 and that is $800 Mil dollars!!

How do you propose MSA buy those jets with only $160 mil in the bank??? No one would give you that type of a loan for your size. You couldn't even buy 8 RJs without bankrupting the company.

good grief!!!!

Riiiight... You don't pay cash for them all. Do you pay cash for a car or house when you buy it? If you're like 99.9999% of the population, then no.

You can USE the money to finance the planes you need. How many airlines do you think have $800 million sitting around every time they make a new jet order? By your logic, everyone has to have enough cash because obviously you can't finance airplanes and you obviously don't need capital to do that, either. Does NWA own all of their own planes outright? I think not. But you need capital to get financing. Get it now???

Good grief!!!!!!!!!!!!!!!

 

[WhiteCloud]

Mel,

.

RJs run at a minimum of $15 mil per copy. More than likely twice that number. I will be generous and say $20 mil. Multiply that times 40 and that is $800 Mil dollars!!

The last number I heard is around 22M for a new one. I imagine the ragged out ones with 5,000+cycles go for significantly less. Anybody have some real numbers?

 

[PoorJetDriver]

CRJ 200's can be had for around $18 million with a sizeable order.

 

[sf3boy]

Mel,
Come on now, man. You know full well that NWA paid cash for all 36 of the 146's. They paid cash for all them new fangled French planes too.

Redtailer should have said...."Only a big legacy carrier can use a loan to purchase aircraft. Puny commuter airlines flying in regional routes such as MSP-JAX, DTW-OKC, MEM-ASE, should have to pay cash for every single plane they operate."

 

[Redtailer]

Don't you guys read??? I said they would need a loan, but MSA does not have enough of a market cap or cash on hand to get that kind of financing.

First off, you're proposing that MSA spends every penny in the bank for a down payment. Look around, you cannot do that. The company needs that cash to survive. Also, most companies would acquire that number of aircraft over a period of years. JetBlue, which is a LOT better financed than MSA took almost 4 years to get 40 aircraft. Let's not forget it would take time to organize and apply for such a loan, bid for the aircraft, and wait for them to be delivered. Even if the process was started today the first one would not touch the property for at least 6 months. Point is that it can be done, if you used every penny in the bank for a down payment which is really not a good idea, but not in the time frame needed. Maybe over a period over several years, but NWA does not have that kind of time. And that is what this is all about.


As I said you keep saying all this stuff that sounds nice, but it's a financial fairy tale... Do me a favor and look at your company financials and look at how much money it would take to start such a venture, not to mention everything else that goes with it such as FUEL, GATES, LDG FEES, and tell me exactly how it won't bankrupt MSA with your current profit margin.

 

[Mel Sharples]

MSA does not have enough of a market cap or cash on hand to get that kind of financing.

Puh-leeeze... How do "start-up" operators with less capital get money for more expensive aircraft? Airlines spring up all the time with less in the bank than Mesaba, as well as no business plan. You should no better than that.

First off, you're proposing that MSA spends every penny in the bank for a down payment.

No one ever said "every penny in the bank for a down payment" but you. You are the only one even proposing that, so thanks. But no again.

Let's not forget it would take time to organize and apply for such a loan, bid for the aircraft, and wait for them to be delivered. Even if the process was started today the first one would not touch the property for at least 6 months.

I agree. Again, no one said we could fly them next week. Only you are implying that.

Maybe over a period over several years, but NWA does not have that kind of time. And that is what this is all about.

And for this my friend, you get the major B*** S*** FLAG. The spin NWA MEC is putting on the TA is that this jet thing was ONLY so NWA could take over select markets if another major pulled service. I.e. United dumps service in a region of the east, NWA can step in with a carrier that is ready to go. That is IF that happens.

Now you are saying this needs to happen right now. Time is a factor. Hmmm... sounds to me like this wasn't the reason at all.

Could Mesaba spool up tomorrow? Nope. Next week? Not a chance. In a month? Keep dreaming. Yet two things remain. NWA won't allow Mesaba OR Pinnacle (who does operatre CRJ's now, in case you didn't know) to even bid on the flying. We can never get any of that flying under the new TA. You could have just as easily worded it that "any carrier" can bid for the flying. NWA would get the same result. If we didn't have a plan, so be it. At least we had a shot. Why specifically prohibit 9E and XJ from growing? NWA knows why.

So which was is it, Redtailer? Did NWA do this so they could move in and capture a market if it goes south? If so, maybe time isn't as big a factor and maybe they could have offered XJ or 9E to come up with a plan. But we will never know.

Could USAir or United go "tango uniform" tomorrow? You bet. But again, the whole timing of this is NOT a part of the agreement at all, just spin from the NWA MEC.

If it makes you guys feel better, go ahead and believe that you will allow NWA to move in on short notice. But the reality is you gave Mesaba and Pinnacle notice that you don't care about us like you said and you kicked us in the shorts.

So the whole financing argument is a moot point. But thanks for playing anyway.

 

[Redtailer]

Puh-leeeze... How do "start-up" operators with less capital get money for more expensive aircraft? Airlines spring up all the time with less in the bank than Mesaba, as well as no business plan. You should no better than that.

Ok, and how many of those "start-ups" are still in business????? Most don't even make it to flying even 1 passenger. Also, they don't usually get all of the money from the banks. Instead it's usually a bunch of investors with a stake in the company. Great, give up control of your company for more RJs with the odds of succeeding against you in the current environment. Great plan.

And for this my friend, you get the major B*** S*** FLAG. The spin NWA MEC is putting on the TA is that this jet thing was ONLY so NWA could take over select markets if another major pulled service. I.e. United dumps service in a region of the east, NWA can step in with a carrier that is ready to go. That is IF that happens.

So which was is it, Redtailer? Did NWA do this so they could move in and capture a market if it goes south? If so, maybe time isn't as big a factor and maybe they could have offered XJ or 9E to come up with a plan. But we will never know.

I encourage you to take a look at the larger picture. Let's say for just a moment that MSA and PCL were able to bid. When will it happen?? No idea because it's based on another carrier failing, so the time frame is a sliding one. Well, the winner of the bid will produce those RJs overnight. MSA and PCL cannot do that. Even if they were to start buying them today there is the fundamental problem of what to do with them in the mean time??? You order 40 RJs for delivery over the next 3-4 yrs but with no where to fly them because NWA has not put out a bid. Bottom line is that you can't order them until the bid comes out. If the bid comes out then those RJs will be needed within a very short time frame. One that MSA nor PCL could accomplish.

If it makes you guys feel better, go ahead and believe that you will allow NWA to move in on short notice. But the reality is you gave Mesaba and Pinnacle notice that you don't care about us like you said and you kicked us in the shorts.

Why specifically prohibit 9E and XJ from growing?

The reality is that NWA MEC gave scope relief for MSA and PCL to gain more 50 seaters. Hence MSA and PCL will grow regardless. The 40 RJs were an additional agreement. Either they were to be used for competitive advantage or NWA was not going to get them at all. This is what was agreed to. In either case PCL nor MSA were going to get them. If NWA really wanted to whipsaw the groups with a contract carrier they had the ability all along. They didn't need a NWA MEC contract concession for that. So this whole business of NWA MEC screwing you is just pure garbage.

 

[LivinDaDream]

This is a 100% incorrect statement. There are no contractual terms on the addition of this new flying. The NWA MEC used this scenario in publications and roadshows to make the NW pilots feel a little better about f*cking PCL and XJ pilots over. This scenario has evolved into urban legend among mainliners. I guess its true that if you tell the same lie long enough it eventually becomes true.

Think what you wish.

It is a 100% correct statement. I have read the agreement... not the PowerPoint slides. There are very specific conditions under which the other 50 seaters can be used.

 

[Mookie]

not to fuel this fire, but SkyWest has options starting in June for a hundred or so CRJ 70's and 90's. These could be delivered at 6 or more per month starting then. at first glance that's insignificant to the NW plight, but United has stated that they would love to have more 70's, and less 50's, and ergo, the 50's could be repainted quickly. hell, the new paintjob is mostly white already. this in no way is anything other than me reading between the lines.

hopefully if we, skywest, come on line with pncl and mesaba, we can in the interminable words of Rodney King..."all get along." I also think that nw is really screwing you guys on this...

peace,
Mookie

 

[Redtailer]

LivinDaDream,

Don't forget how NWA MEC screwed MSA and PCL by allowing them to use up to 15% of the 50 seat RJ flying for Hub Bypass along side of the unlimited 44 seaters... Oh the horror of point to point in an RJ. Yet somehow they feel as though they got a raw deal out of this?!?!?!?

 

[sf3boy]

Dude, quit putting MSA into the 50 seat sentences. I know that most of the mainline guys have no clue who flies what little airplanes here and there, but MSA has no 50 seaters. PCL has 50 seaters. Some of your pension is being funded in hopes that PCL continues to prosper and grow. BTW, whoever sold that to your MEC was an absolute genious. Anyway, MSA is made up of 70% Saabs. The other 30% of the fleet, Avro's, is doing the most ineffiecient trips of all 121 carriers, called 16 hour four days. MSA does not fly point to point, except to the crap towns in MN and MI with the SAAB. Ya'll at mainline are welcome to have those old North Central and Republic DC-9 routes back.

 

[Redtailer]

Dude, quit putting MSA into the 50 seat sentences. I know that most of the mainline guys have no clue who flies what little airplanes here and there, but MSA has no 50 seaters.

sf3boy, cool your jets.

Most folks at mainline know exactly what MSA and PCL flies. I refer to the 50 & 44 seaters with MSA in the sense of what the agreement allows. Any 50 or 44 seater on order could potentially go to MSA and so I include them in all of those statements.

Some of your pension is being funded in hopes that PCL continues to prosper and grow. BTW, whoever sold that to your MEC was an absolute genious.

Well, you're partially right. It was a brilliant move on all parts involved. However, mainline pensions do not depend on the success or failure of PCL because those shares were sold off months ago.

 

[sf3boy]

Well, congrats on selling off the PCL shares. However, until MSA actually has 50 seat airplanes, don't include MSA into the whole "50 seat devil jet" talks. We are a prop airline. That is what our CEO has said that we are going to continue as. That means that the BOD at NWA and MSA told him to say that.

 

[Mel Sharples]

Any 50 or 44 seater on order could potentially go to MSA and so I include them in all of those statements.

I could potentially become Queen of England and NWA could potentially go bankrupt. *yawn*

Doesn't change the here and now.

Look, you may think you didn't kick us in the sack and that's fine. Honestly. We'll get over it. You have your opinion and we have ours. That's what makes America great.

But don't for a second act like you're helping us. We may be complaining about our take on your TA, but now you are changing your tune from "quit blaming us" to "start thanking us."

Homie don't play that, buddy.

 

[DoinTime]

Think what you wish.

It is a 100% correct statement. I have read the agreement... not the PowerPoint slides. There are very specific conditions under which the other 50 seaters can be used.

If you truly read the agreement you would know exactly what it says and you've demonstrated that you don't know what it says. There are no conditions for the addition of those 40 RJ's. I have read your TA several times, in fact its up right in front of me, and I know exactly what it says. There isn't even any language that can be misinterpreted. Your not LivinDaDream your LivinInADreamWorld.

Here is the actual language that pertains to the addition of 40 more 50-seaters.

Section C.9.g.(3):
Up to 40 Regional Jet aircraft to be operated under the NW code designator by an air carrier other than Pinnacle, Mesaba or any affiliate of the Company may be added to the 104 maximum set forth in subparagraph C.9.c. above,
provided that each such additional Regional Jet must be a Regional Jet which is not (a) operated under the NW code designator as of October 11,2004, or (b) on order or option to the Company or any affiliate of the Company as of
October 11, 2004, or (c) ordered or leased by Northwest or any affiliate of the Company after October 11, 2004, or (d) financed in any way by Northwest or any affiliate of the Company. If such aircraft are operated by an airline which
also operates, or which has an affiliate which also operates, aircraft certificated with a maximum passenger capacity of 60 seats or more, the airline may operate these Regional Jets using the NW code designator notwithstanding the provisions of Section 1.C.2.

 

[Mel Sharples]

If you truly read the agreement you would know exactly what it says and you've demonstrated that you don't know what it says. There are no conditions for the addition of those 40 RJ's. I have read your TA several times, in fact its up right in front of me, and I know exactly what it says. There isn't even any language that can be misinterpreted. Your not LivinDaDream your LivinInADreamWorld. Here is the actual language that pertains to the addition of 40 more 50-seaters.

Nothing like shutting someone up with the facts.

Thanks for posting that, DoinTime. Well done. . .

 

[avrodriverj85]

Oh the horror of point to point in an RJ. Yet somehow they feel as though they got a raw deal out of this?!?!?!?

Oh redtailer, the ride in the back of a DC9 with those hideous 50 year old Flight Attendants - point to point is so much better!!!

 

[propjockey]

ragged out ones with 5,000+cycles

Off the subject I know, but that's practically brand new! Multiply that number by 10 to get an idea of what "ragged out" really is. I flew a Brasilia this past week that has about 50,000 cycles on it!