Rumor SkyWest Inc. receives new jet financing?

[General Lee]

Genny, et al.
It was a paper DAL put out about 10 years ago explaining the philosophy of the RJ. The RJ is a supplemental asset, it fills the last seats on a widebody by bringing them in on long thin routes. The RJs were never intended to be a stand alone piece of equipment. When you finally figure out the airline business you might actually have some insight. An RJ with one empty seat is still more economical than an MD 80 with 10 empty seats. The RJ should be filling the last few seats going to London or Frankfurt, there will never be enough revenue to justify a RJ from BOI-OAK, unless there is an overseas connection being made. The RJ was used as a union busting tool by mainline management after 9/11, unfortunately they were successful, just about every tier in the airline business is warring with other, and the smallsacks, TILTons, and the rest of the dbag management slimeballs are laughing.

Why would RA state he is trying to get rid of as many 50 seaters as possible then? They don't make the connections work if they are money losers. You either have to put in larger planes (like DC9s and A319s are doing on routes to FAY and GPT for example), or you dump them. And wait, an RJ with one empty seat is more economical than an MD80 with 10? Really? I think you have that mixed up. If all 50 seats are full on an RJ, it is still losing money. There aren't first class seats on a 50 seater, and the larger the plane, the more you can spread out the costs. Boyd is correct about 50 seaters going away---look at LAX and SkyWest with Delta. No more 50 seaters in June. All 70 or higher, because they have figured out they can't make money. That means they brought in 70 or 76 seaters from elsewhere to make it work, and probably are dumping the 50s totally soon. PNCL and Comair are now pretty much owned by Delta, and they will decide which 50s go away first, with Comair going down to 44 total planes by the end of this year.


Bye Bye---General Lee

 

[General Lee]

This is after the mainline union pilots voted to keep RJ's off of the mainline seniority list. As posted by many others; mainline union senior pilots are the source of the whole RJ, Regional subset.

They are all retired now mostly. The rest of us now have to try to clean up the problem, but high gas prices are slowly doing it for us.


Bye Bye---General Lee

 

[Nevets]

They would lose their a$$es. It's much more than pilot compensation.



Yes, I just read the report this morning. Go back and read it again, the difference is that the prepaids went up a corresponding amount. Pay ahead on leases, insurance and other expenses and you get steep discounts. Not a bad idea when interest rates are effectively zero. Get a ten percent discount on your insurance or leave the money in a CD? You decide.

Now, if I paid my mortgage ahead for the whole year, what does that do to my cash flow for the next year?

For a company with about $3.5 billion in revenues $1.5 billion in debt ain't much, especially if the interest rates are really low, which they are, which you can do when you have a lot of cash.

You will notice that the net of the balance sheet went down by about $700,000, hence the loss.

I was just correcting your wrong information.

As for CAL losing their a$$es, no one really knows. But it is fact that AMR offered this very approach for 50+ seat aircraft to the APA before their bk filing. So maybe there was something to it.

In any case, I hope that ALL mainline pilot groups tighten scope. Just a hope.

 

[dojetdriver]

They are all retired now mostly. The rest of us now have to try to clean up the problem, but high gas prices are slowly doing it for us.


Bye Bye---General Lee

We can only hope. But the insanely high oil prices of a fews years put barely a dent in the overall RJ count.

 

[General Lee]

We can only hope. But the insanely high oil prices of a fews years put barely a dent in the overall RJ count.

Here is what Delta has lost. All of the LAX XJT flying(E145s). All of the Mesa ERJ and Dash-8 flying (JFK/CVG---Freedom Air). Comair will be down to 44 total planes. ASA lost some CRJs that went to UAL in IAD and ORD. Mesaba lost all the Saabs. Now PNCL is in BK, and there is a chance all of their CR9s in ATL will go somewhere else, along with some of their CRJ2s. The only airline to GAIN extra flying is GOjets.



Bye Bye---General Lee

 

[dojetdriver]

Here is what Delta has lost. All of the LAX XJT flying(E145s).

That was only a 2 year agreement anyway, with only 10-15 aircraft on a CPA. The other aircraft were on a pro-rate agreement that were virtually risk free to DAL. The agreement was terminated after about 18 months by CAL leveraging XJT, with the help of SkyWest. And those aircraft on the CPA were NOTHING but placeholers on the LAX gates till DAL could get their crap together in LAX. Crap that NEVER came together anyway thanks to the economic woes in 2008.

You'd be surprised though how many LAX/SLC based DAL pilots were ever so happy those ERJ's were out there. They provided service to markets that didn't have any service before then, as well as additional flights to places they commuted from. And didn't take the same weight restrictions that ASA/SKW CRJ 200's did.

All of the Mesa ERJ and Dash-8 flying (JFK/CVG---Freedom Air). Comair will be down to 44 total planes. ASA lost some CRJs that went to UAL in IAD and ORD. Mesaba lost all the Saabs. Now PNCL is in BK, and there is a chance all of their CR9s in ATL will go somewhere else, along with some of their CRJ2s. The only airline to GAIN extra flying is GOjets.



Bye Bye---General Lee

I'm not sure why you're mentioning the props. Something has to serve those markets, like east jesus nowwhere and who gives a fukc somewhere. You know, the places that management said was necessary to serve. Served in fact by the RJ's that mainline to too proud to fly, that would feed the emerging international market that needed more heavy jets. So how they feed those markets?

GoJet got extra flying, for GoJet. But those aircraft are simply replacing ASA aircraft. And keep in mind, DAL isn't the ONLY airline out there that outsources flying. As mentioned in a previous post, UAL is 50% outsourced.

 

[General Lee]

That was only a 2 year agreement anyway, with only 10-15 aircraft on a CPA. The other aircraft were on a pro-rate agreement that were virtually risk free to DAL. The agreement was terminated after about 18 months by CAL leveraging XJT, with the help of SkyWest. And those aircraft on the CPA were NOTHING but placeholers on the LAX gates till DAL could get their crap together in LAX. Crap that NEVER came together anyway thanks to the economic woes in 2008.

You'd be surprised though how many LAX/SLC based DAL pilots were ever so happy those ERJ's were out there. They provided service to markets that didn't have any service before then, as well as additional flights to places they commuted from. And didn't take the same weight restrictions that ASA/SKW CRJ 200's did.



I'm not sure why you're mentioning the props. Something has to serve those markets, like east jesus nowwhere and who gives a fukc somewhere. You know, the places that management said was necessary to serve. Served in fact by the RJ's that mainline to too proud to fly, that would feed the emerging international market that needed more heavy jets. So how they feed those markets?

GoJet got extra flying, for GoJet. But those aircraft are simply replacing ASA aircraft. And keep in mind, DAL isn't the ONLY airline out there that outsources flying. As mentioned in a previous post, UAL is 50% outsourced.

I never said I didn't like the E145 operation out of LAX, I bet many West Coast DL guys liked it. The XR is a better plane than the CRJ2 because of the full load plus Jumpseater capability. But, even with that today, high gas is killing it. It just can't cover the costs. 70 and 76 seaters are a bit better because there are more seats to sell, but the 50s and 37 seat ER3s are just bad economically, and if high oil persists, they will go away.

You're right about the props, some of them went to EAS routes like Watertown and Mason City, and that brought people into hubs like MSP. But, often there were only 5 people on board, and that really didn't make any sense. Yes, EAS money was paying for a lot of it, but I guess it became a hassle because RA dropped it. Great Lakes has started to pick up a lot of that type of stuff in MSP, and maybe the BE1900 is a better fit for some of those cities, and those same people now will just have to lug their bags over to a Delta ticket counter in MSP after they deplane off of the 1900.


You're right about Gojet, they did get some of the same planes that DL owned, that were used by ASA I believe. But, they are going to CVG mostly, and filling in where Comair lost a TON. Again, they will be down to 44 aircraft by the end of the year. That is NUTS. Delta got rid of 100 or so RJs in the last couple years, and according to the tone in the last couple of conference calls, that may not be the end of it. But, I hope that less RJs means more mainline jobs for those who want them.



Bye Bye---General Lee

 

[BOX OFFICE]

I think this discussion is kind of dumb. You both make great points, but what is your goal? You're not going to change each others minds, so is your goal to convince others to come you your "side"? Not likely. How about we just quit playing MBA know it alls and just fly planes? Why do pilots think they're an authority on all topics?

 

[ASApuppy]

General,

You and I could have a great conversation over a beer (or 6). You make several good points. But some assumptions that are not accurate though. So, lets chat.

LAX was all about squating on gates that the LAWA ( Los Angeles World Airport Authorty) wanted back while you were in Bankrupcy. They were one of two groups that were opposing the reorginazation plan. So, Delta responded as quickly as they could. Skywest still had non-compete clauses with UAL. Comair was too far away and Pinnacle was not in the picture yet as a DCI carrier. Xjet had many aircraft sitting around idle but could not deploy as quickly as needed. Enter ASA. 6 months for us, 18 months for Xjet, and now its all flown by Alaska.

Turboprops left the system because they were old and have worn themselves out. The other reason is Delta insists on wanting jetway boarding and first class seats for their medallions. Seeing 62 peeps on an upgrade list for 8 1st class seats tells me that system is broken, but save that discussion for another thread. Back to TP's. They were cheap to fly though. When Delta owned us and the EMB-120, several Delta managers told me that the break even point for a Brasilia was 6 pax. That was back in the day of $20/b oil. I remember when oil hit $40/b and then retreated to $30. Same managers were asked about why Turboprops were leaving and if they ever would come back. They said that if oil ever hit $40/b again then we would be ordering new TP's. That was 2004. The bottom line is that the 50 seat RJ was designed around a quick entry jet to fly through a loophole in a pilot contract. For a clean sheet aircraft designer, that is about as dumb of a design constriant as you could imagine. I think a clean sheet design for todays enviroment is a "wide-body", straight wing turbo prop. Short field, lots of room inside, fuel-mizer. Have it seat 100 and have bin space for 100 bags. It would burn less fuel per seat mile than an A-380. But, this is all dreaming.

Real World issue number one right now has nothing to do with the economics of a 50 seater. We are full, as is most mainline. The real issue is pilots. Nobody is training right now to replace us when we retire or otherwise quit. I was recently talking to some of our hiring Dept peeps and they told me that ASA/Xjet has virtually ZERO qualified applications on file. We have bumped up our min hours to 1100 or so, for ATP reqmt coming next year. We are turning away extra flying requests from DAL and UAL because we fear not being able to staff. Gojets is having a hard time staffing their gift of only 8 planes. Sure they are cheaper when they bid at a loss. Wages need to go up. When I learned to fly, I paid $35 hr wet for a C-150. When I came to ASA, Delta was paying $323/hr for 777CA. What are those numbers now?

As for moving on, thats not so easy either. Many Regional Capt's are in their 40's plus now. I ran some numbers. Alaska is hiring. Cool. Looking at retirement numbers, one might expect the left seat with a line in 14 years. So, how much would you earn as a 14y FO? I did simple math, 80 hr/mo, no retirement stuff, just wages, $1.39M. What if I stayed at ASA? $1.38M. Same hours worked. Left seat, no reserve, and most weekends off. Where is my incentive to start over? Give me FedEx or UPS wages and we're talking. Wages need to go up. In the meantime, CEO's like RA need to be planning a network of flights with fewer pilots required. You have to assume that UAL/CAL and even AA will evolve to DAL payrates. Since your mass exodus of 50+ guys prior to bankrupcy, DAL is behind the curve in future upgrades. Yes, NWA helped, but you are far from par against the other legacies. While Delat may be the most solid financially, anybody that scrubs the senority list should know that Delta (and SWA) are amongst the last choices. We, ASA are anticipating a mass exodus of our FO's as soon as we type them and give them ATP's. Hello Qatar. Delta cannot afford to have flights scuttled at the last moment because of pilot staffing. That is approaching fast. So, what will save the day? Simply eliminating RJ's sound good on paper, but how many peeps on your 767 connected on an RJ? I bet enough to no longer keep you in the black. A happy median is larger planes on less freq. You have to keep the biz traveler happy with freq, and yes it does matter. I think we almost had the perfect solution back in 2000. We should have been stapled to your list and scope sealed up. Since that ship has sailed, what next? You have to honor the time and experience of some of our senior pilots, especially like guys in the Training Dept with APD's. Are they really equivlant to a 3 yr FO? Perhaps DAL could "franchise" its DCI pilots. Flow through or such, but also with the elimination of 1st yr pay and probation. Movement at the regional is good for mainline too. I predict offers for scope changes that revolve around swapping 50's for 70-90's. Just my guess.

 

[General Lee]

General,

You and I could have a great conversation over a beer (or 6). You make several good points. But some assumptions that are not accurate though. So, lets chat. Sounds good. I will buy the first few rounds...

LAX was all about squating on gates that the LAWA ( Los Angeles World Airport Authorty) wanted back while you were in Bankrupcy. They were one of two groups that were opposing the reorginazation plan. So, Delta responded as quickly as they could. Skywest still had non-compete clauses with UAL. Comair was too far away and Pinnacle was not in the picture yet as a DCI carrier. Xjet had many aircraft sitting around idle but could not deploy as quickly as needed. Enter ASA. 6 months for us, 18 months for Xjet, and now its all flown by Alaska. I understand the process. We needed those gates, and you guys were placed there. If it would have been profitable, you might have stayed. Terminal 6 is now Alaska and Horizon, but that just happened. The XJT experiment ended when it ALSO became unprofitable. As far as Alaska taking over XJET routes, that isn't necessarily the case. Some of the routes were the same, but since then they have cut back on Cancun, and some of the Mexico flying thanks to the Cartel stuff going on down South. They still rule SEA, PDX, YVR, and have a DCA flight too. They had that before the move.

Turboprops left the system because they were old and have worn themselves out. The other reason is Delta insists on wanting jetway boarding and first class seats for their medallions. Seeing 62 peeps on an upgrade list for 8 1st class seats tells me that system is broken, but save that discussion for another thread. Back to TP's. They were cheap to fly though. When Delta owned us and the EMB-120, several Delta managers told me that the break even point for a Brasilia was 6 pax. That was back in the day of $20/b oil. I remember when oil hit $40/b and then retreated to $30. Same managers were asked about why Turboprops were leaving and if they ever would come back. They said that if oil ever hit $40/b again then we would be ordering new TP's. That was 2004. The bottom line is that the 50 seat RJ was designed around a quick entry jet to fly through a loophole in a pilot contract. For a clean sheet aircraft designer, that is about as dumb of a design constriant as you could imagine. I think a clean sheet design for todays enviroment is a "wide-body", straight wing turbo prop. Short field, lots of room inside, fuel-mizer. Have it seat 100 and have bin space for 100 bags. It would burn less fuel per seat mile than an A-380. But, this is all dreaming. I am surprised the Dash-8-400 was never brought up, which might have worked well on certain routes. I don't think we ever had a restriction on those. The problem is those planes are mainline plane replacers too. CAL is a great example. Those Colgan DH8-400s replaced a lot of 737-500s out of EWR and IAH. Now of course they are going away because UAL wants to pay PNCL less than what they cost per hour, and that is the key here, the Mainline carriers are the ones demanding how much to pay now, not the regional carriers. Sure, someone else will fly those DH8-400s for UAL, (maybe Republic), but it will be for what UAL wants. Delta has that pricing power too, and if certain airlines don't want to play, they will lose out (even on 8 CR9s at Gojets).

Real World issue number one right now has nothing to do with the economics of a 50 seater. We are full, as is most mainline. The real issue is pilots. Nobody is training right now to replace us when we retire or C-150. When I came to ASA, Delta was paying $323/hr for 777CA. What are those numbers now? That is a problem. One of my friends told me first year at Embry Riddle now costs over $50K if you stay at the dorms the first year, which I think is required, along with the flight program. Who can afford that? That's called a lot of debt for people who might not make a lot at a regional, and now with new hiring standards and rules coming out, it may take a couple years before you actually get hired to try to pay off that debt. Not good. I think the Legacies will have flow up programs, and maybe sponsor some schools to help keep that flow going. I don't really know. As far as what a 777 CA made, that was sustainable. The problems was the selling of the fuel hedges that we had, and then the run on the pensions when people thought things were going downhill. That has all been cleaned up through the BK process, and DL is now very profitable again. We are currently doing face to face negotiating with the company, and it was requested by both sides, so something is going on. Pay raises are back on the table, and other interesting developments could occur soon. Will there be a request for more 76 seat RJs? I bet there will be.

As for moving on, thats not so easy either. Many Regional Capt's are in their 40's plus now. I ran some numbers. While Delat may be the most solid financially, anybody that scrubs the senority list should know that Delta (and SWA) are amongst the last choices. . A happy median is larger planes on less freq. You have to keep the biz traveler happy with freq, and yes it does matter. I think we almost had the perfect solution back in 2000. We should have been stapled to your list and scope sealed up. Since that ship has sailed, what next? You have to honor the time and experience of some of our senior pilots, especially like guys in the Training Dept with APD's. Are they really equivlant to a 3 yr FO? Perhaps DAL could "franchise" its DCI pilots. Flow through or such, but also with the elimination of 1st yr pay and probation. Movement at the regional is good for mainline too. I predict offers for scope changes that revolve around swapping 50's for 70-90's. Just my guess. Stagnation at the Majors and furloughs pushed a lot of younger RJ pilots to stay at the Regionals. Now there is a huge amount of retirements coming up, and even Delta is concerned. I read an article stating 7600 Delta pilots will retire at age 65 (if they get there) within 15 years. Yes, a lot of Delta guys left pre-BK, but there are still a lot of FNWA pilots to go. UAL/CAL never lost any pre-BK, and AA/US are full of old guys too. I see Regionals getting smaller, still having 76 seaters (nothing larger), but still having some. The 50s will leave, and overall the Regionals will be half the size, with mainly 70 and 76 seaters, but again half the size as they were. Pilots there may stay for QOL reasons, but the legacies will be looking for anyone, and thanks to better profits lately, the wages will go up. Right now first year at DL is around $55 an hour, with second and third years rising about $25 an hour each year. After 3 years you could be looking at $100K per year, and that is without the upcoming raise (some people saying maybe 20% first year, with 4 or 5% a year for a few after that). If guys do leave in droves, you can expect to fly quickly through the ranks, up to Widebody FO within a year or so, or stay on narrowbodies for better QOL. One thing the Majors have is a better retirement program (DC fund besides the 401K. 2% match on your own 401K contribution, and then 12% extra on whatever you make over the month, into your own seperate account) Add to that profit sharing (near $10K each year for me over the last couple), and better benefits. It's not just the pay, it's the variety in flying, the option of bases, and the clear advancement that will happen thanks to known retirements. Southwest doesn't have that same problem. They will have one type of plane (if they dump the 717s). Everytime a SWA Captain leaves, one FO moves up, and then they hire a new guy to replace that FO. At the Majors, when a senior Widebody Capt leaves, a lot of people move up. It might be 8 people (other Captains moving up, then FOs, then a newhire). That isn't the pilot group's fault, that is how the airline chooses to manage it's fleet. 737s don't work well flying nonstop to Hong Kong. So, I see good things happening coming up here. If you choose to stay at your regional, that is your choice, but I see it shrinking, with half the size eventually. If you want to take a chance at quicker advancement, better pay and benefits, and flying something and somewhere different, then throw an app into a Legacy. It's all up to you... Sure, people can go over to Dubai etc and live in the Sandpit, but a lot may not like it as much, and they may be waiting for something closer to their actual home. Flying over there may be fun for you, but maybe not for your wife and kids.

Good discussion. I went over the 1000 limit and had to delete a portion of your initial responses. Sorry about that.



Bye Bye---General Lee