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RJET Q1 Loss 22.4 Million

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RiddleEagle18 said:
No wonder they have been moving so many of their 170's back to the delta side. How long can this last?
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One of the many reasons the "brand" is losing money is the fleet.

17 170's
13 145's
18 190's
55 Airbus

The 30 170's and 145's are all orphans without a home. RJET is operating them at a loss on the branded side because it is cheaper to fly them at a loss than it is to park them in the desert.

The legacies are parking more narrowbodies so all 17 of the 170's are going back onto CPA's.

All 13 of the 145's are either going to be parked (six returned to EMB), subleased, or re-established as Frontier-Express. This will remove the RJ losses from the Branded side and place them were they originated, on the FFD side.

By the end of 2011, the branded fleet will be strictly Airbus and 190's.

This will mitigate the losses but Frontier will not be profitable will $3.50 a gallon fuel unless we continue to experience a significant RASM increase. Unfortunately, with MKE and DEN as the only two branded hubs, we are not going to see a large enough RASM increase unless we move to another "neighborhood".
 
Bedford talked on the Q1 Earning Conference call today about a $100 million "Business Improvement Program" being focused on the cost side of the equation. Will the Teamsters or FAPA even talk with Bedford about concessions? Will all 3,000 pilots being moved to one union soon or will they remain separate for a while?
 
maxblast72 said:
Bedford talked on the Q1 Earning Conference call today about a $100 million "Business Improvement Program" being focused on the cost side of the equation. Will the Teamsters or FAPA even talk with Bedford about concessions? Will all 3,000 pilots being moved to one union soon or will they remain separate for a while?
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The $100 million is a target that can and will be hit without concessions. RAH IBT is in Section 6 and FAPA is at the boiling point. The mere mention of concessions will be counter productive at this stage of the game.

The union question will be answered by the end of June. We are about to have a representation election.

The Airbus order is a no brainer.

What Bedford lacks in airline management skill he more than makes up for with his ability to leverage one side against another.

C Series is dead, which is why they are partnering with COMAC. No one will order the Cseries and no one will order the C919 so they are trying to build one plane together in a desperation move to stay viable.

RAH will announce a Neo order, they just need to clean up a handful of things first.
 
StaySeated said:
The $100 million is a target that can and will be hit without concessions. RAH IBT is in Section 6 and FAPA is at the boiling point. The mere mention of concessions will be counter productive at this stage of the game.
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According to yesterday's press release, 28% of RJET's operating costs were fuel and 21% were labor. The other big categories were landing fees and airport rents, aircraft and engine rent, maintenance, and insurance. Bedford says he need $25 million in cost cuts a quarter (and the numbers probably back him up). I can't imagine Bedford didn't already have the non-labor cost as low as he could get them. That only leaves one area where Bedford can try to get some savings.

I wish you guys luck. I used to fly at Shuttle America (back when they had Saabs). I know guys at both Republic and Frontier. You guys need to be unified and come up with a solution. At $3.50/gallon, time is not on Bedford's side. One of 3 things needs to happen relatively quickly before Bedford burns too much cash: 1) Oil price and crack spread drops significantly. 2) Raise ticket prices significantly (not likely as there already has been 6 ticket price hikes this year and good luck getting Southwest to go along in your markets) or 3) Bedford finds $25 million quarter in savings.
 
No flaming here, but doesn't this sound like the beginning of the Mesa race to bankruptcy? Biting off more than they can chew, branded flying, many aircraft types, fuel cost rising, etc. Just sounds a bit like the same thing happening again to a different regional.
 
boomlrd said:
No flaming here, but doesn't this sound like the beginning of the Mesa race to bankruptcy? Biting off more than they can chew, branded flying, many aircraft types, fuel cost rising, etc. Just sounds a bit like the same thing happening again to a different regional.
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Yup. BB and company have finally realized they've ********************ed up and haven't got a clue what they're doing. SWA spanked RAH in both DEN and MKE. I guess this is just deserts for the new Mesa. :)
 
They can't compete in the branded flying department when a Frontier flight is flown in a Midwest EMB-135 and announced over the p.a. that it's Chautauqua airlines.
 
boomlrd said:
No flaming here, but doesn't this sound like the beginning of the Mesa race to bankruptcy? Biting off more than they can chew, branded flying, many aircraft types, fuel cost rising, etc. Just sounds a bit like the same thing happening again to a different regional.
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I can see some parallels between the Mesa bk and rjet.

Mesa had over 200 rj's at their peak. They exited BK with 76 rj's.

Mesa was not able to renegotiate 50 seat rj leases, nor did they have a platform that would allow their continued operation of 50 seaters at a reduced loss.

Bedford has accomplished both. He has an agreement with EMB that replaces 24 145's with 190's (EMB eats the financing on the 145) and he has the brand that adopts all of the orphaned rj's.

Rjet had 220+ rj's at their peak. They have restructured down to less than 180 rj's and the momentum is starting to increase.

Unfortunately, if oil remains above $100, none of the 145 CPA's will likely be renewed and there are more 145's than there are replacement aircraft deliveries. After the AA and CAL CPA's expire, there are still 50 145's on the CHQ certificate. How do you shed 50 airframes outside of BK? You can't sell them because all of the CPA's have a change of ownership provision where the legacy partner has to approve the transaction or they can (and will) walk away.

I don't think rjet is standing on the edge yet, but $110 oil ($140 with the crack) is forcing bedfords hand.

FWIW, the next three quarters are projected to be profitable (consolidated) at $3.60 gallon.
 
Once the represenation election is over at Frontier/Republic this summer, will work begin to get all 3,000 pilots working on a joint CBA?
 
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maxblast72 said:
Once the represenation election is over at Frontier/Republic this summer, will work begin to get all 3,000 pilots working on a joint CBA?
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This may be a question that only the IBT can answer.

The Chautauqua CBA has been amendable since 2007, yet the IBT has not TA's one single section to date.

I am not trying to start an arguement here, I am seriously interested how the IBT intends to handle the additional workload they may inherit.

The Local 357 has very little money in the bank, the current dues structure doesn't provide an adequate revenue stream to fund the operation, and the "national" union doesn't seem very interested in financially supporting what may potentially be their largest airline organization.

I have witnessed several IBT representation drives in my relatively short 13 year airline career. Their playbook is only a few pages long, and very predictable.

Scare Tactic #1 - if you don't vote for the IBT, you will be stuck with your current CBA for a very long time. (Oh the irony)

Scare Tactic #2 - only the IBT is a _____________ pilot's union (fill in blank with whatever type of airline fits the current need. Usually it is a "cargo" pilots union, but this time it will be a "regional/llc/ffd/branded" pilots union?)

Scare Tactic #3 - if you don't vote for the IBT, you will end up without a union!! (This is one of my favorites, totally untrue but they always use it anyway)

Sorry for the thread drift. Who knows when or if their will be a CBA that covers all 3000 pilots. There is no such thing as a "joint CBA" in the RLA. The only reference to such a term is found in the ALPA merger policy which obviously doesn't apply here.

I imagine we will learn more at the end of June.
 
Bedford came to den last week and said he will do whatever it takes to keep us seperate ( sell 51% or more to somebody ). I doubt this will happen but I am hoping.
 
dlzav8tr said:
Bedford came to den last week and said he will do whatever it takes to keep us seperate ( sell 51% or more to somebody ). I doubt this will happen but I am hoping.
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I have heard this from a couple people now.

I was at the same meeting, and Bedford absolutely did not say he would do whatever it takes to keep us separate. I think this is a very good example of the grapevine (which ironically Bedford used as an example during the meeting) and denial causing people to hear what they want to hear.
 
dlzav8tr said:
Bedford came to den last week and said he will do whatever it takes to keep us seperate ( sell 51% or more to somebody ). I doubt this will happen but I am hoping.
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This was written by someone who came to the meeting with a dream, doesn't comprehend english well, didn't listen and left thinking they heard their dream confirmed somehow.

It didn't happen!

Another thought, he may just be trying to spread misinformation intentionally.
 
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