Rumor SkyWest Inc. receives new jet financing?

[JustaNumber]

I've heard this rumor from three different people now, that Skywest Inc has recently secured a multi-billion-dollar loan for new aircraft financing. I couldn't find anything public, other than this somewhat old news article: http://www.airfinancejournal.com/Article/2888629/SkyWest-plans-large-regional-jet-order.html

Has anyone heard anything substantial? And if so, what kind of jets would be purchased? The rumor I heard mentioned C-Series, with some kind of scope-busting guaranteed-seat-purchase codeshare agreement with DL. Not that I agree, but could this be done? Is there anything in the DL pilot contract that would prohibit this kind of innovation? Might this be the reason DL management is trying to get their pilot contract done early, before they spring this surprise?

 

[damnflyboy]

My 2 cents: probably good to have this financing/replacement plan in place to attract suiters. Sort of like being "pre-qualified" when putting in an offer for a house.

Additionally, the mainline partners won't have to pony it up...allowing them to put the money to work elsewhere (be it quality items for customers, or more likely, management bonuses).

SkyWest INC now has one of the largest Canadair/Embrair fleets in the world, giving them massive buying power and market influence.

But, as you know, opinions are like a$$holes. Everybody has one.

 

[TEXAN AVIATOR]

Rumors rumors rumors... Does it really matter? How would anyone validate this anyway?

 

[waterskier]

I have heard this rumor as well.
IMO:
Makes sence for SKW to do something like this.
All the other regionals are basically just a labor recourse, with the planes being owned or financed or co-signed by the mainline carrier. SKW might be trying to change the rules a little.... by SKW being a complete sub contractor (provides the planes, and the pilots.... a true turnkey service) they can demand a little more money for the service. Good business decision because it leverages their good financial position to differentiate themselves from others in the market.

 

[Data]

Here's where it gets fun. Most mainline partners have been pushing for short term agreements (2-3 years etc). Aircraft leases come in 15-20 year flavors. Skywest won't commit to a 15-20 year lease on a new replacement aircraft if Delta is only going to give them a 3 year deal on it. If they're looking for a fleet replacement program, they're going to have to get longer term agreements with their mainline partners. So, that said. If those announcements start coming out, then its a replacement order. If they don't get those agreements with their mainline partners, who knows, maybe it is for something bigger, that's the million dollar question.

 

[ASADriver]

I have been hearing these rumors too. Hopefully it comes true.

 

[amcnd]

SkyWest has the advantage of cash.. That ='s cheap leases.. Mainline airlines are no longer wanting to tie up there credit on RJ's.... So if "scope" is ever lifted Sky Inc. will be able to take on a large order of 70-90 seat aircraft to lower its unit and operating costs.. I think if they could pull off a pure "Code share" deal they would. But i don't see that in the cards at mainline right now...

 

[JustaNumber]

I think if they could pull off a pure "Code share" deal they would. But i don't see that in the cards at mainline right now...

Do you know what the mainline contract says about code-share deals? It seems that if DL can codeshare with Air France who flies 747s, why couldn't they codeshare with SuperDoubleSureJet who might fly Bombardier CS100s?

 

[spudskier]

Laugh at me but hear me out. ACA tried it an failed. ExpressJet failed. Republic Holdings tried it and is failing. SkyWest Inc has had the time, resources and ability to learn from everything else that has happened...

Enough cash/leverage and already having the planes, pilots and resources, who knows. This is ONLY a wild imagination at work, but SkyWest could try to set out on their own in some fashion. Not necessarily ditching everything else, but who knows... maybe they're making a move to start their own SkyWest Mainline. (not SkyWest Airlines that pilots currently flying for, call mainline)

Proceed to make fun of and tear my post apart...

 

[jynxyjericho]

Laugh at me but hear me out. ACA tried it an failed. ExpressJet failed. Republic Holdings tried it and is failing. SkyWest Inc has had the time, resources and ability to learn from everything else that has happened...

Enough cash/leverage and already having the planes, pilots and resources, who knows. This is ONLY a wild imagination at work, but SkyWest could try to set out on their own in some fashion. Not necessarily ditching everything else, but who knows... maybe they're making a move to start their own SkyWest Mainline. (not SkyWest Airlines that pilots currently flying for, call mainline)

Proceed to make fun of and tear my post apart...

I doubt it's skywest airlines mainline creation, or anything of the sort. Delta management want's the 717's, CRJ1000's at a regional level and Skywest is trying to show Delta they could finance it themselves. I agree with the above mentioned that Skywest would only do it, provided they could lock in a 15 or some long time contract. Delta is probing their pilot group, Skywest (and certainly other carriers) are all tossing out bids.

 

[spudskier]

I doubt it's skywest airlines mainline creation, or anything of the sort. Delta management want's the 717's, CRJ1000's at a regional level and Skywest is trying to show Delta they could finance it themselves. I agree with the above mentioned that Skywest would only do it, provided they could lock in a 15 or some long time contract. Delta is probing their pilot group, Skywest (and certainly other carriers) are all tossing out bids.

Thank you for your thoughtful comments... not used to that on FI. Me personally, I would like to see mainline flying stay at mainline. Future job prospects and such. Mainline carriers care more about numbers than people... always have, always will

 

[JustaNumber]

Laugh at me but hear me out. ACA tried it and failed. ExpressJet failed. Republic Holdings tried it and is failing. SkyWest Inc has had the time, resources and ability to learn from everything else that has happened...

The reason the above failed is because selling tickets requires selling a brand. No brand, no ticket sales. Americans only assume you run a safe airline if they recognize the brand. But they have no problem buying a Delta ticket and riding on some startup regional, because they assume Delta ensures it's safe. So the key to making a new startup mainline airline work is to sell tickets under an existing brand, where both the cheap startup and existing brand share the profits. Could it work? Depends on how much you could fool both the DL mainline pilots and the general public.

 

[jynxyjericho]

Thank you for your thoughtful comments... not used to that on FI.

Lol, well if you like thoughtful comments there are other boards

Me personally, I would like to see mainline flying stay at mainline. Future job prospects and such.

Me too, if wishing made it so. Just think, we get to put all our trust into OYS/General Lee.

 

[Whydoitry]

Sorry for the drift, but I have to stick up for the ExpressJet branded flying. The reason it failed had nothing to do with market conditions or fuel spiking. The thing shut down with 90% load factors. It shut down due to Continental wanting their 145XRs back after making a major blunder in giving them up, and XJT being forced into a really bad position thanks to Skywest.

 

[SLUF4]

The reason the above failed is because selling tickets requires selling a brand. No brand, no ticket sales. Americans only assume you run a safe airline if they recognize the brand. But they have no problem buying a Delta ticket and riding on some startup regional, because they assume Delta ensures it's safe. So the key to making a new startup mainline airline work is to sell tickets under an existing brand, where both the cheap startup and existing brand share the profits. Could it work? Depends on how much you could fool both the DL mainline pilots and the general public.

well, now the cat's out of the bag and we know your trick-thanks for telling us!

 

[SuperKooter]

I've got a better rumor.

United takes back their scope and delta continues to park the useless 50 seaters thus cutting skywest in half.

Let's hope this tumor starts the shrink. We're already seeing it with pinnacle and let's hope EVERY regional ends up like them and mesa.

Shrinkage is a good thing in the regional world.

 

[JustaNumber]

well, now the cat's out of the bag and we know your trick-thanks for telling us!

Just for the record, it's not MY trick! I'm just wondering if management could get away with something like this. I'd still like to hear from any mainline pilots regarding what's in their scope section concerning codesharing.

 

[SLUF4]

yeah, i meant skyw inc. I don't feel like deciphering the scope section for codeshare right now, but it appears that for the foreign code share and the agreements with Alaska etc..we have different clauses in there. Who knows what will happen during these current contract negotiations.

 

[777forever]

It's pretty simple. SKW got approved for a multi billion dollar loan. Well of course they did. Inc has an excellent credit rating. They aren't going to execute the loan until they have a CPA with mainline carrier(s). Plenty of possibilities on where they're going with this one:

AMR CRJ900 or E170 flying
1 for 1 swap large RJ for E145 up to 75 aircraft for new United per CPA
Airways large RJ flying

 

[www.]

Sorry for the drift, but I have to stick up for the ExpressJet branded flying. The reason it failed had nothing to do with market conditions or fuel spiking. The thing shut down with 90% load factors. It shut down due to Continental wanting their 145XRs back after making a major blunder in giving them up, and XJT being forced into a really bad position thanks to Skywest.

You might want to look at 10k and qs. They tell a different story.