SkyWest Ground Handling

[Newpilot2b]

Herd in the crew lounge this morning that SkyWest lost the RFP for all ground handling in Montana to Comair?

 

[USCtrojan]

Herd in the crew lounge this morning that SkyWest lost the RFP for all ground handling in Montana to Comair?

Yes, it's true. Don't worry too much. I don't think it was an RFP per say. So far out of 13 stations of 19 ASA has lost every single one. I imagine 6 more will go as well. Delta just put out the RFP to make it look good. Everything will be moving to RAH eventually.

Trojan

 

[dh2981]

. Everything will be moving to RAH eventually.

Trojan

What do you mean? Why do you say that?

 

[USCtrojan]

What do you mean? Why do you say that?

Because if Delta has the power/ability to make money on their operation, they will. DAL is combining Mesaba, Comair and Compass ground handling into RAH ground services. These ground stations make money for their respective Carriers. Delta wants it. Can't blame them for it. Performance won't matter, only $$$ does.

Trojan

 

[dh2981]

Because if Delta has the power/ability to make money on their operation, they will. DAL is combining Mesaba, Comair and Compass ground handling into RAH ground services. These ground stations make money for their respective Carriers. Delta wants it. Can't blame them for it. Performance won't matter, only $$$ does.

Trojan

Ah! you mean RHS! Yea i agree with you. That the whole purpose of it. They want to take control of all ground handling

 

[USCtrojan]

Ah! you mean RHS! Yea i agree with you. That the whole purpose of it. They want to take control of all ground handling

Sorry about that, I stand corrected. I was thinking it was "Regional Air Handling". Not Republic, sorry for the confusion.

Trojan

 

[rickair7777]

I heard that DAL was taking over Montana...but that's just the tip of the iceberg. Rumor has it that DAL wants to take over all ground handling in SLC...if true, that will impact hundreds of SKW ground employees.

 

[USCtrojan]

I heard that DAL was taking over Montana...but that's just the tip of the iceberg. Rumor has it that DAL wants to take over all ground handling in SLC...if true, that will impact hundreds of SKW ground employees.

I had a former SkyW Regional Mgr, who was let go and is now at ASA as a Reginoal Mgr. on my jumpseat. (yes, he was given permission by Scott Hall). He told us this scenario could possibly and will likely happen.

Trojan

 

[rickair7777]

I had a former SkyW Regional Mgr, who was let go and is now at ASA as a Reginoal Mgr. on my jumpseat. (yes, he was given permission by Scott Hall). He told us this scenario could possibly and will likely happen.

Trojan

Anybody want to guess why DAL would do that? I talked to some DAL guys while jumpseating...they seemed to think that DAL was just trying to preserve jobs for it's own employees. My concern is that DAL is laying the groundwork to boot SKW out of SLC. Not sure if ATL and SGU are getting along well these days...

 

[USCtrojan]

Anybody want to guess why DAL would do that? I talked to some DAL guys while jumpseating...they seemed to think that DAL was just trying to preserve jobs for it's own employees. My concern is that DAL is laying the groundwork to boot SKW out of SLC. Not sure if ATL and SGU are getting along well these days...

I really don't think it has anything to do with that. It's all about that "seamless" travel option. Delta did this exact thing with ASA in Atlanta a few years ago. Granted ASA's customer service left a few things to be desired (not that Delta is much better.) SkyWest is seeing the same thing happen in their hub. There is demand for RJ's in SLC, additionally SkyWest has a fat Contract with Delta. That won't change, but the ground handling stuff most likely will.

Trojan

 

[Speedtape]

Anybody want to guess why DAL would do that? I talked to some DAL guys while jumpseating...they seemed to think that DAL was just trying to preserve jobs for it's own employees. My concern is that DAL is laying the groundwork to boot SKW out of SLC. Not sure if ATL and SGU are getting along well these days...

1. Cost Cutting--They can save about 33% on labor by replacing current employees with someone making $8 per hour and no or lesser benefits.

2. Modular Flight Operations--By taking over the ground operations, it will allow them to "Plug-n-Play" regional airline's flight operations. If a regional doesn't perform or has labor relations that may threaten the mainline operation, then it makes it easier to replace that regional. WHIPSAW

3. Seamless Customer Service--concept allows a higher degree of seamless service and quality control. Mainline will have direct control over the customer service product. In the future, it will be an employee that will only do it the Mainline way.

4. Airplane Ownership--In the future, mainline will own enough of the airplanes in the feeder fleet where they can allocate or reallocate those planes where they see fit. It facilitates the Plug-N-Play concept. Just take the airplanes from one regional, remove and replace the sticker on the front, and transfer it to another regional. Depending on direction of negotiations, Pinnacle may get the first dose of that medicine.

5. Reduced Control--By implementing this concept, individual Regional Control is reduced further. Basically, a regional carrier will consist of a small mangagement structure that controls employees that are only comprised of Mechanics, Flight Attendants, and Pilots. All other business functions will be executed by Mainline. For the most part, since the airplanes will be controlled by Mainline, a regional is nothing more than a wet-leasing flight ops, temp agency. Strict Cost Control will follow. They decide what you will get paid and what your benefits will be. There will be no more pattern bargaining. In fact, there will probably be no more Unions. Welcome to the Walmart World!

 

[rickair7777]

1. Cost Cutting--They can save about 33% on labor by replacing current employees with someone making $8 per hour and no or lesser benefits.

2. Modular Flight Operations--By taking over the ground operations, it will allow them to "Plug-n-Play" regional airline's flight operations. If a regional doesn't perform or has labor relations that may threaten the mainline operation, then it makes it easier to replace that regional. WHIPSAW

3. Seamless Customer Service--concept allows a higher degree of seamless service and quality control. Mainline will have direct control over the customer service product. In the future, it will be an employee that will only do it the Mainline way.

4. Airplane Ownership--In the future, mainline will own enough of the airplanes in the feeder fleet where they can allocate or reallocate those planes where they see fit. It facilitates the Plug-N-Play concept. Just take the airplanes from one regional, remove and replace the sticker on the front, and transfer it to another regional. Depending on direction of negotiations, Pinnacle may get the first dose of that medicine.

5. Reduced Control--By implementing this concept, individual Regional Control is reduced further. Basically, a regional carrier will consist of a small mangagement structure that controls employees that are only comprised of Mechanics, Flight Attendants, and Pilots. All other business functions will be executed by Mainline. For the most part, since the airplanes will be controlled by Mainline, a regional is nothing more than a wet-leasing flight ops, temp agency. Strict Cost Control will follow. They decide what you will get paid and what your benefits will be. There will be no more pattern bargaining. In fact, there will probably be no more Unions. Welcome to the Walmart World!

Makes sense.

 

[Erlanger]

I heard that DAL was taking over Montana...but that's just the tip of the iceberg. Rumor has it that DAL wants to take over all ground handling in SLC...if true, that will impact hundreds of SKW ground employees.

It would impact SKW employees but I don't think SKW would mind that. They could get rid of alot of employees, greatly reduce their benefits cost and let DAL take all the blame for the ground handling problems.

 

[Erlanger]

Anybody want to guess why DAL would do that? I talked to some DAL guys while jumpseating...they seemed to think that DAL was just trying to preserve jobs for it's own employees. My concern is that DAL is laying the groundwork to boot SKW out of SLC. Not sure if ATL and SGU are getting along well these days...

SKW owns the rights to the "E" gates in SLC for the next 100 years. This could turn into a bluffing game with DAL and SKW over who's going to budge over the those gates. SKW owns all their planes. SKW could them try to do an Expressjet or ACA type branding with those jets and the gates. Or I'm sure SKW could also find another carrier to move into SLC and codeshare for them. Would DAL risk it?

 

[Tarzan]

How do figure SKW owns all their planes?

 

[Erlanger]

How do figure SKW owns all their planes?

OK, so most are leased but DAL doesn't have any rights to them is what I was trying to imply.

 

[rickair7777]

True, SKW controls the airplanes and the gates.

 

[PBRstreetgang]

DAL would be barking up the wrong tree, do not, repeat do not stand between SGU and their cash tree, it's kinda like having your pockets stuffed with bacon, with a hungry Tasmanian Devil sitting on the couch next to you.
Bad Idea!
PBR

 

[USCtrojan]

DAL would be barking up the wrong tree, do not, repeat do not stand between SGU and their cash tree, it's kinda like having your pockets stuffed with bacon, with a hungry Tasmanian Devil sitting on the couch next to you.
Bad Idea!
PBR

BACON BACON BACON!!!! I SMELL BACON!!!! GIMME SOME F'N BACON!!!!!!!!

Trojan

 

[Speedtape]

SKW owns the rights to the "E" gates in SLC for the next 100 years. This could turn into a bluffing game with DAL and SKW over who's going to budge over the those gates. SKW owns all their planes. SKW could them try to do an Expressjet or ACA type branding with those jets and the gates. Or I'm sure SKW could also find another carrier to move into SLC and codeshare for them. Would DAL risk it?

Expressjet or ACA type branding? And how did that work out?

Another carrier move into SLC and codeshare?

Hmmm--Who would that be and where would their armada park?

Who do you think is the real 800 LB. Silverback Gorilla in this equation?

 

[Speedtape]

True, SKW controls the airplanes and the gates.

And Mainline owns 60% of Skywest's revenues and Mainline has figured out how to make the Fee for Departure "reset" work for them(utilizing the Compass and Mesaba average cost.) Look for profits to drop dramatically and performance bonus to evaporate. Therefore, they don't need to own the planes or the gates.

Moreover, if it came down to it, who could more easily replace who? What's that saying--"Don't put all your eggs in one basket or even 2!"

My fate is tied to INC. first and then Mainline, but there are some bad things on the horizon!

 

[FSIGRAD]

Hope they take over DEN, only place I deal with SKW and although not on the level of IAD it is crap. Only place RAH does the ramp is US in IND. I don't think they are in the market.

 

[USCtrojan]

Dam, SkyW stock is sinking hard. I wonder if this has to do with the groundstations moving to RHS. Or does it have to do with the profits halving in the 4th Qtr? Andy Neil, what's going on?

Trojan

 

[Andy Neill]

Dam, SkyW stock is sinking hard. I wonder if this has to do with the groundstations moving to RHS. Or does it have to do with the profits halving in the 4th Qtr? Andy Neil, what's going on?

Trojan

If you're appealing to my stock expertise, I don't have a clue. It is noteworthy that SKYW is lower than it's lowest monthly close since 03. The same can be said for AMR, CAL, DAL, UAUA, LCC (all time lows for all three since coming out of bankruptcy), XJT, MESA, PNCL (all 3 at all time low since I have records), and LUV (low for the last 12 years).
If you're appealing to my inside knowledge of SKYW, I haven't been there for over 2 years.
In either case, there are two Ls in Neill.

 

[USCtrojan]

If you're appealing to my stock expertise, I don't have a clue.
If you're appealing to my inside knowledge of SKYW, I haven't been there for over 2 years.
In either case, there are two Ls in Neill.

LMAO!! I'm just appealing to your general knowledge of the Company. Don't mean to put you on any spot in any way. Just looking for an educated opinion.

Trojan

 

[Andy Neill]

LMAO!! I'm just appealing to your general knowledge of the Company. Don't mean to put you on any spot in any way. Just looking for an educated opinion.

Trojan

No problem. I edited my post since your response showing what the overall performance in the airlien industry is. My most profitable trade last month was a 96% profit in UPS puts.

 

[USCtrojan]

No problem. I edited my post since your response showing what the overall performance in the airlien industry is. My most profitable trade last month was a 96% profit in UPS puts.

Thanks, good job on UPS! Sorry about the misspelling. Perhaps we are reaching capitulation, or it's imminent?

Trojan

 

[Speedtape]

Dam, SkyW stock is sinking hard. I wonder if this has to do with the groundstations moving to RHS. Or does it have to do with the profits halving in the 4th Qtr? Andy Neil, what's going on?

Trojan

USCtrojan,

The whole industry is down. But, particularly, SkyW stock is down because Mainline reset their "Fee for Departure" to a much lower amount. This will affect profits drastically. There will be no more $39 million quarters. Your Performance Bonus Plus will evaporate, as profit margins will be less than 1%.

 

[USCtrojan]

USCtrojan,

The whole industry is down. But, particularly, SkyW stock is down because Mainline reset their "Fee for Departure" to a much lower amount. This will affect profits drastically. There will be no more $39 million quarters. Your Performance Bonus Plus will evaporate, as profit margins will be less than 1%.

Thanx for the info. Do you have any info on what the old rates and new rates were? I thought these were contractual and were not negotiable unless both parties agree? Just off the top of my head, I wonder if this was a concession Inc. would agree to so as to not cut more capacity?

I know what would get that stock price back up real quick.....;-)

Trojan

 

[ROSWELL41]

Considering the markets are at a 1997 level, I'm not really surprised to see airline sector stocks at six year lows.