SkyWest Had Made Hostile $3.50/Share Bid For ExpressJet

[Fishpaw]

My guess is it has something to do with their scope clause and how it is bound to the holding company...

Our (xjt) mec said today that they haven't been contacted by anyone about making changes to our cba. Our scope clause hasn't been threatened... unless of course they're not telling us everything

 

[BankAccount=0$]

Good Question??? Anyone??

The scope language that was incorporated into Contract 2004 by the XJT ALPA group effectively handcuffs ExpressJet holdings and or their successor to using pilots on the ExpressJet seniority list to accomplish that flying. If a company was to purchase XJT and then (as it appears SKYW has done) re-negotiates the CPA with CAL they still have to use the XJT pilots as they "own" the flying that is done by XJT holdings. SKYW most likely can not give CAL a price low enough to secure the flying by using XJT pilots. SKYW is asking for XJT to re-negotiate the Collective Bargaining Agreement with XJT ALPA to remove this part of the scope language to facilitate their purchase of XJT holdings.

I can only speak for myself on this, but I will probably never support weakening the scope language in contract 2004. There is a good reason why that language is there (read Freedom Air), and there is no reason why it should be changed to let SKYW eliminate our pilot group and our superior contract. If Jerry wants XJT he can have us as we are, not how he thinks we should be.

 

[RDG]

I'm so sick and frickin' tired of that phrase.

Hey! I need that phrase. Its on my buzzword bingo card.:beer:

 

[Future Furlough]

Bank account beat me to it.

What does SkyWest not like about pages 223 thru 226?

Best guess? These three paragraphs sum it up.

1. Any and all flying performed by or for Holdings or any affiliate of Holdings under a code sharing agreement or capacity purchase agreement
between Continental Airlines, Inc. (“Continental”) and Holdings or any of its affiliates (the “Continental Capacity Purchase Agreement”) utilizing aircraft with greater than 19 passenger seats will be performed by ExpressJet Airlines, Inc. (“ExpressJet” or “Company”) under the terms of
the Agreement between ExpressJet Airlines, Inc. and ALPA dated December 1, 2004 (“Agreement”).

2. If Holdings creates or establishes an air carrier, including through an existing or new affiliate, Holdings will ensure that this air carrier recognizes ALPA as the representative of its pilots consistent with the RLA, that the air carrier adopts a collective bargaining agreement identical to the Agreement and that all flying by or for the air carrier will
be performed by pilots on the ExpressJet Pilot Seniority List (the “Pilots’ Seniority List”). Filling of vacancy and displacement rights for such pilots
at the new air carrier will be established by mutual agreement between ALPA, ExpressJet and the new air carrier, provided that if an agreement is
not executed within 30 days from the date the affiliate was created or established, the parties shall jointly submit outstanding issues on the
filling of vacancies and displacement rights to expedited binding arbitration.

g. No ExpressJet aircraft (including orders and options) shall be transferred to the acquired air carrier; provided however, if Continental reduces the number of aircraft flying pursuant to the
Continental Capacity Purchase Agreement, that number of aircraft may be transferred to the acquired air carrier; and,

Section 1.D.3 deals with successor and mergers and seniority intergration.

 

[Erlanger]

The scope language that was incorporated into Contract 2004 by the XJT ALPA group effectively handcuffs ExpressJet holdings and or their successor to using pilots on the ExpressJet seniority list to accomplish that flying. If a company was to purchase XJT and then (as it appears SKYW has done) re-negotiates the CPA with CAL they still have to use the XJT pilots as they "own" the flying that is done by XJT holdings. SKYW most likely can not give CAL a price low enough to secure the flying by using XJT pilots. SKYW is asking for XJT to re-negotiate the Collective Bargaining Agreement with XJT ALPA to remove this part of the scope language to facilitate their purchase of XJT holdings.

I can only speak for myself on this, but I will probably never support weakening the scope language in contract 2004. There is a good reason why that language is there (read Freedom Air), and there is no reason why it should be changed to let SKYW eliminate our pilot group and our superior contract. If Jerry wants XJT he can have us as we are, not how he thinks we should be.

Continental apparently doesn't really want to do business with XJT anymore. You guys are burning through money quickly and you have $130 million bond due this summer. The branded flying is a failure. What choices do you have?

 

[Future Furlough]

Continental apparently doesn't really want to do business with XJT anymore. You guys are burning through money quickly and you have $130 million bond due this summer. The branded flying is a failure. What choices do you have?

I always have the choice not to accept concessions or inferior work rules. I walked away from one crappy concession contract forced down my throat, I won't hesitate to do it again. :angryfire

Everyone bitches about the race to the bottom but no one wants to do anything about it. Sometimes it's painful to stop the slide.:uzi:

 

[Erlanger]

Latest and the greatest off the wire:



ExpressJet shares soar by nearly half following SkyWest bid

April 25, 2008
Related news


All Associated Press news
NEW YORK (AP) - ExpressJet Holdings Inc. shares jumped by more than half Friday after the regional carrier rejected a rival's takeover bid as too cheap, but signaled it might be willing to sell for the right price.
The Houston airline said SkyWest Inc.'s offer of $3.50 per share undervalues the company, which mainly operates connecting flights under contract to Continental Airlines Inc. and Delta Air Lines Inc. It also said it was establishing a committee to review "strategic and operational alternatives" to the bid.
"The initial SkyWest offer is inadequate and represents an opportunistic attempt by SkyWest to acquire the company at a price well below the true value that ExpressJet would bring to a combination," ExpressJet said in a statement.
ExpressJet shares have been hammered along with other airline stocks in recent months as the economy soured and fuel prices soared. The stock was trading above $6 per share as recently as July, although it has not broken above the proposed purchase price since mid-February.
While the company said SkyWest's existing offer does not fairly reflect ExpressJet's value, it did acknowledge that the combined company "would likely produce meaningful synergies." That suggests ExpressJet might be willing to consider a higher offer.
"We believe that ExpressJet management would be open to a higher offer, which SkyWest may be willing to make," Calyon Securities analyst Ray Neidl said in a note to investors. He added that "we have doubts about ExpressJet's ability to survive in the long run and think that ExpressJet would be wise to consider the current offer."
SkyWest Vice President of Finance and Treasurer Mike Kraupp declined to comment when asked whether SkyWest might consider raising its bid. The company said in a statement it was disappointed by the rejection and planned to review its options, which could include altering or withdrawing its offer.
"The ball is back in our court," Kraupp said.
A representative for ExpressJet could not immediately be reached for comment.
Airlines of all sizes have come under increasing pressure to cut costs and boost revenue in the face of rapidly rising fuel prices, and a number of smaller carriers have gone out of business or turned to bankruptcy protection in recent weeks. Many industry observers argue that more consolidation is needed for the industry to remain viable.
Earlier this month, Delta and Northwest Airlines Corp. agreed to combine to create what would be the world's biggest airline. Other large carriers have reportedly been in talks about tie-ups of their own.
Neidl said trading in ExpressJet shares suggests the market believes there is a 50/50 chance the deal could go through, although he believes the odds are better because shareholders will likely pressure ExpressJet to sell. He rates the stock "Neutral."
"If a deal is not consummated, we believe the stock would revert to its pre-offer level around $2 per share," Neidl added.
ExpressJet shares surged $1.16, or 55.5 percent, to close at $3.25.

If there's no other airlines making a bid for XJT too, which there doesn't seem to be, Skywest will wait it out. Skywest will eventually get what they want from the shareholders and pilots.

 

[BoilerUP]

Skywest will eventually get what they want from the shareholders and pilots.

So...what do they want from the XJT pilots?

Be specific.

 

[Erlanger]

So...what do they want from the XJT pilots?

Be specific.

Have you not been reading all the posts? Here's specifically what Skywest wants involving the pilots.

This proposal is also conditioned upon ExpressJet obtaining a clarification and/or amendment, satisfactory to us, to the collective bargaining agreement (the “CBA”) between ExpressJet Airlines, Inc. and the pilots in the service of ExpressJet Airlines, as represented by the Air Line Pilots Association, International (“ALPA”), dated December 1, 2004. First, we need clarification that nothing in the CBA (including, but not limited to, Section 1.D.3) would obligate us to merge the operations of ExpressJet Airlines with those of any or all of our currently-owned airline subsidiaries, or any airline subsidiaries we may acquire in the future, or otherwise apply to us or any of our subsidiaries or affiliates (other than ExpressJet and its subsidiaries). Secondly, we need the agreement of ALPA that the certain undated letter among ExpressJet, XJT Holdings, Inc., ALPA and the ExpressJet MEC, appended as pages 223 through 226 of the CBA, shall be revoked and deemed null and void, prior to the conclusion of the acquisition.

 

[BoilerUP]

Have you not been reading all the posts? Here's specifically what Skywest wants involving the pilots.

Yes, indeed I have been reading all the posts.

Your posts indicate that you think XJT pilots are between the proverbial rock and a hard place, with no options other than acquiescing to Jerry Atkins' demands.

What incentive do you think XJT ALPA would have to willingly negotiate away their contractual language that would bind SKW, Inc. to their Section 1?