NWA looking for new regional partner

[another cfii]

I think it's been mentioned before in another thread that flying for NW isn't all that a sweet deal. First of all, this deal only strikes in condition such as a major hits the dust and there's a vaccum of power in a hub, then NW can solicit another regional for flying, and no where does it say it's gonna be permanent.

Second of all, if you've seen NW's philosophy, it's all about the dollar sign. If they see they're making money from such hub, they might as well buy off those routes and leave the RJ carrier standing in the dust. Of course I hope that won't be the case.

 

[John_W_Thompson]

Pinnacle

Does anyone know if Pinnacle is still interviewing?

Word is there's 60 FO and 24 CA vacancies about to be officially posted - large and unexpected numbers. A large number of both GIA and ER alumni have been snatched up. I see ads from the hiring dep't to. Yes, Pinnacle is interviewing here in Memphis for sure too.

 

[belchfire]

Watch out, here comes corpex! Were getting more
jetpigs out of the desert!

 

[DoinTime]

Don't start drooling!!!

The agreement allows for 40 additional 50 seaters ONLY in the event of a current Legacy's failure. It is for the SOLE purpose of instantly jumping into a void if one occurs without any Capital investment from NWA, rather than waiting for a current AirLink to buy aircraft and train pilots. It's an insurance policy against something that may never occur.

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.

 

[dondk]

I think it's been mentioned before in another thread that flying for NW isn't all that a sweet deal. First of all, this deal only strikes in condition such as a major hits the dust and there's a vaccum of power in a hub, then NW can solicit another regional for flying, and no where does it say it's gonna be permanent.

Second of all, if you've seen NW's philosophy, it's all about the dollar sign. If they see they're making money from such hub, they might as well buy off those routes and leave the RJ carrier standing in the dust. Of course I hope that won't be the case.

AMEN to this one...

I'd bet "IF" flying of a scale large enough to require 40 RJ's came to fruition.. NWA pilot's will be all over it calling it "their" flying in no time at all.

 

[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.