SkyWest + Continental = Love

[Rogue5]

"Precarious"?

There has been a lot of talk about "the facts." Here are some (with references):

From yahoo finance’s Financial Summary (http://biz.yahoo.com/p/s/skyw.html):

SkyWest, Inc., through its wholly owned subsidiary, SkyWest Airlines Inc., operates regional airlines in the United States. For the fiscal year ended 12/31/02, revenues increased 29% to $774.4 million. Net income before acctg. change increased 55% to $78.3M. Revenues reflect an increase in revenue passenger miles due to the delivery of additional CRJ. Net income reflects a decrease in promotion and sales expenses.

Recent Earnings Announcement
For the 3 months ended 03/31/2003, revenues were 207,362; after tax earnings were 13,300. (Preliminary; reported in thousands of dollars.)


From the company’s 2002 financial report (http://www.skywest.com/invest/10k-2002.pdf):

Liquidity and Capital Resources

The Company had working capital of $391.8 million and a current ratio of 4.2:1 at December 31, 2002, compared to working capital of $270.8 million and a current ratio of 3.3:1 at December 31, 2001. The increase in working capital was primarily the result of an increase of $88.3 million in net cash provided by operations during the year ended December 31, 2002.

From the current “Fact Sheet” (http://www.skywest.com/info/images/January Fact Sheet.pdf):


FEBRUARY 2003

SkyWest Airlines operates as partner carrier to two of the world’s largest airlines. SkyWest provides service as United Express in partnership with United Airlines along the West Coast and out of United’s Denver hub. At Salt Lake City and Dallas/Fort Worth, SkyWest operates as a Delta Connection under a marketing agreement with Delta Air Lines. SkyWest is the world’s largest independently operated regional airline.

Hubs

SkyWest currently maintains seven hubs at Los Angeles, San Francisco, Portland, Seattle/Tacoma, Denver, Salt Lake City and Dallas/Fort Worth.

Cities (States) Currently Served
Total: 97 (27) United: 57 (13) Delta: 65 (22) Shared: 26
& 2 Canadian Provinces

Stations Operated
SkyWest: 49

Employees 5,552 02/01/03

Average number
Of daily scheduled
Departures
United: 649 Delta: 416 Total: 1,065

LAX: 143 SFO: 82 PDX: 21 SEA: 18 DEN: 50 SLC: 162 DFW: 40

Passengers
Carried in 2001 6.23 million passengers

Total revenue
passenger miles flown in 2001 1.73 billion revenue passenger miles*

*A Revenue Passenger Mile is equal to one fare paying passenger flown one mile.

Total aircraft in
operating fleet 155 (All numbers include deliveries and retirements this calendar month)

Average age
of fleet: CRJ = 2 years Brasilia = 7.3 years Combined = 4.9 years

Embraer planes: (75) 30-passenger Embraer-120 turboprops (16 DL, 59 UA)

Bombardier planes: (80) 50-passenger Canadair Regional Jets (49 DL, 31UA)

Total aircraft orders: Delta Connection
10 Firm Orders on Canadair 50-passenger 200 ER series
35 Options*

United Express
24 Firm Orders on Canadair 50-passenger 200 ER series
84 Options*

*Options give the company the right to purchase additional aircraft at a previously stated price if purchased by a specific date.

Calendar Year 2001
Financial results: Revenue $601,865,000
Net earnings $56,428,000
# Shares $57,237,000
Diluted EPS $0.

Again, from the DOT filing (http://dmses.dot.gov/docimages/pdf85/241340_web.pdf):

“We expect our agreement to finalized May 12, 2003.”

“Our requested service pattern will be 3 trips per day and we can initiate service July 1, 2003.”



So.... Tons of cash in hand (and increasing), revenues increase 29% during 2002 (a year many view as one of the worst financially in the biz), jets coming by the boatload, and talks being finalized with a 3rd codeshare.

 

[Skyward]

How about this: Skywest gets contract to fly 120's out of IAH but they will be crewed by Express Jet pilots. Both CA and FO seats will be filled by Express Jet pilots. Not just Express Jet furloughed pilots, but anyone on the Express Jet list who wishes to bid a 120 seat. That's what I've been told by my union reps.

 

[George Jetson]

As posted on the other Skywest-CAL thread.

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There's 2 questions and issues here:

Will CAL ALPA agree to a deal involving turboprops in Houston?

How badly does Skywest Airlines, Inc. want this additional revenue?

Clearly CAL ALPA has a price in mind and that price will most likely include (as told to me by ALPA representatives) not only jobs for CALEX furloughed pilots but probably the Captain seats as well. It will also include some sort of seat limitations as well as limitations on the cities and amount of aircraft hulls, etc.

Granted, Skywest Airlines will have to take into account the welfare and feelings of its own pilot group on this issue, but being that SKYW is non-union, the pilot group does not have an official say on this manner.

At the end of the day, Continental Airlines just wants the incremental revenue of these small towns. Skywest needs to figure out what its price is and CAL ALPA needs to figure out what its bottomline is. Make no mistake about it, CAL ALPA has been under a lot of pressure from the CALEX pilot membership about the Commutair prop MOU and other representational issues. CALEX pilots are feeling pretty militant right now and are NOT happy about current cities going to another airline, especially with pilots on the street. This deal better be pretty sweet or else the CALEX pilots on the MEC won't sign off on it...and maybe even the CAL pilots.

This deal could very easily blow up, whether it involves Skywest or another airline. I suggest that some of the Skywest pilots read this very seriously because the hiring situation (poolies, etc) is out of their hands at the moment. It is in the hands of their management, CAL ALPA, and Continental Airlines, inc.

 

[maddog805]

uh huh

We will see.....

 

[Jeepman]

As posted on the other Skywest-CAL thread.

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Granted, Skywest Airlines will have to take into account the welfare and feelings of its own pilot group on this issue, but being that SKYW is non-union, the pilot group does not have an official say on this manner.

.

If thats true then why did management let us vote down the j4j deal which would have ment more growth for the company & a third codeshare? I think they want us to be happy & non-union.
And I SERIOUSLY doubt it would be an all COEX pilot operation.

How would you feel if the reverse happened and COEX was to take over the SKYW Brasilia flying out of SLC, but it was to only be staffed by SkyWest pilots?

 

[Skyward]

It doesn't matter how I feel about anything. CAL ALPA has to sign off on any deal, there is no way they will sign off on anything that doesn't have our pilots flying the planes. I'd rather CAL ALPA said no to any deal no matter what. I'll to that flying in the 145. If there's a compromise to be made we will have to do the flying otherwise no deal. CAL ALPA holds all the cards in this, they have to agree to it or no deal. If Skywest doesn't like our terms fine we got a bunch of 145's ready to go.

 

[JBcrjca]

From what I understand, the IAH-VCT service is an EAS subsidized route. Would govt subsidies support ERJs flying that route? That might be why CAL is looking for turboprops to operate to the smaller cities. The pax loads just might not justify an RJ, economically speaking. A turboprop might be a better fit for the market. Makes you wonder why CAL decided to retire all the E120s and ATRs. I just fly airplanes, don't know much about the economics.

I'm pretty sure, however, that SkyWest won't go for a deal crewed solely by CALEx pilots. As Jeepman noted, it would be like CALEx taking over the SLC E120 flying, with SkyWest crews doing the flying. I doubt CALEx pilots would go for that. So that leaves you with some other less attractive regional (Mesa) bidding for the flying. If CAL ALPA wants to sign off on that, go right ahead. And if CAL ALPA doesn't like that, go ahead on lose more money by operating RJs on turboprop routes. To paraphrase Norm, it's a dog-eat-dog industry, and we're all wearing Milk Bone underwear.

 

[Russ]

SkyWest would not have gone this far with the whole thing if they didn't believe they could get an acceptable outcome to the SkyWest pilot group. To those who proclaim that the union is in the drivers seat, don't hang your hat on it. Having your folks on the street makes your bargaining position weaker not stronger. Hopefully SkyWest will present a reasonable plan that all sides find acceptable. If your union tries to play hardball, SkyWest will walk and your boys remain unemployed. The attitude some here have that the terms will soley be dictated by the union. I believe compromise by all parties will usher in a contract where all benefit.

 

[hotwing]

second that!

I tend to side with the above posting. I think that CAL and SKYWEST are calling the shots here and there is nothing in XJETS contract that gives them sole ownership in the flying. I do not think that it is right for XJET pilots to get all the spots at SKYWEST. A mix of both would be fair, but not all the spots just because they think they should have them. Now, is it fair that CAL went outside of the company --? That is the real question here. It is not fair for XJET guys to fill all the spots there and come in and bid for both the CA spots and the FO spots. That is not fair at all for the SKYWEST guys... It is not the SKYWEST guys fault that CAL went outside the company for flying. There is nothing that stated they can't do this... It is understandable that the XJET guys are upset but, it is not fair for the XJT guys to get all the flying and to be able to bid CAPT. There has to be a middle meeting point...

 

[Skyward]

Negotiations are not about fair and right, they are about who has and doesn’t have leverage. Our Prop MOU gives the leverage to the union, you guys argue this but I’m sure you’ve never read it.
As far as what is fair, I think it’s fair that we do our own flying. This isn’t Skywest’s flying, this is flying that I used to do on the 120 and currently do on the 145. When has Skywest flown to CLL, BPT, LCH, VCT ect. This is flying we currently do, is it fair that Skywest pilots fly to those destinations. No, but than again it’s not about fair it’s about leverage. Skywest has no leverage in this deal it’s either take it or leave it. Personally I’d rather they just left it. By the way the reason we have this prop MOU is because we have guys on furlough, so if anything that helps our cause.