Susan Donofrio downgrades Delta!

[lowecur]

So where does CHQ's DCI E-Jets they financed fit into this?

So are you saying if DL goes 7 that the jets get returned to the ERJ? Care to show me where it says that in the purchase agreement.

RJET already has a relationship with both AMR/UAL. I would bet those planes would find a home there very quickly in that consolidation. If not, it wouldn't surprise me to see them at NWA/CAL with the DCA slots they will have. Both consolidations have scope problems to solve, but the investment bankers would do that for them if they wanted the financial package for the mergers.

The wild card is always a sugar daddy stepping to the plate for UAIR to the tune of $1.5B. That would send everybody scrambling to find dance partners by the end of the year. I still believe this scenerio is highly unlikely.

 

[FDJ2]

So are you saying if DL goes 7 that the jets get returned to the ERJ? Care to show me where it says that in the purchase agreement.

I never said they would go back to ERJ. I simply stated the obvious, that CHQ was willing to invest huge sums of dollars by purchasing E Jets for DCI operations. Contrary to your statement that no one would "pay that kind of money to buy a chain that is attached to a 10,000lb anchor."

Lowecur:Are there some investment bankers that are willing to pay that kind of money to buy a chain that is attached to a 10,000lb anchor? Certainly SKYW is not willing to dangle that kind of money for two union carriers. I'm dying to see who is dumb enough to strike a deal.


FDJ: Didn't Chq just strike a deal with DAL to assume $100s of millions of dollars in E jet debt to deploy 16 E-170s on the DCI network?

So it appears that CHQ was willing to put some money up front in order to provide small jet lift to DCI.

You also seem to think that with consolidation or a DAL CH7 liquidation there would be many opportunities to redeploy those excess E Jets. To who? With a DAL liquidation there will be a huge glut of small jets looking for a home and CHQ certainly isn't guaranteed a network partner for its new DCI E Jets as a matter of fact CHQ would be awash in excess small jets and so would Skywest, ASA, CMR, you get the picture.

You also seem to think that with consolidation there's a need for extra capacity, (more jets). Nothing could be further from the truth. Consolidation normally gets rid of the extra jets.

So we know that CHQ is willing to invest huge sums of $$$ in DAL/DCI, I'm sure there are others. The next question is where will CHQ be guaranteed to put all those excess E Jets if DAL/DCI fails? Hmmm.

 

[MedFlyer]

I
With a DAL liquidation there will be a huge glut of small jets looking for a home and CHQ certainly isn't guaranteed a network partner for its new DCI E Jets as a matter of fact CHQ would be awash in excess small jets and so would Skywest, ASA, CMR, you get the picture.

Lets say DL fails, what do you think will happen in a market like TLH where DL currently controls 75% of the capacity? Do you think all those people in TLH will just stop flying because DL is no longer around? Of course not. It's likely that carriers like NW and US would want to increase capacity into those markets (right now they only fly 50 seaters). So hmmmm....what's the next step up from a 50 seater? The E170.

You're probably right that the industry would be awash in 50 seaters (since everyone has plenty of those). But the larger 70 seaters are still in short supply. CO has no 70 seaters, NW only has a handful of AVRO RJ's (which are far from new) and AA only has a small number as well. With DL gone, those carriers would want to steal some of DL's former customers and the E170's would be prime for the job.

CHQ might have a hard time placing the ERJ's (37/50 seats) it operates for DCI, but I don't think it would be hard to find a home for the E170. Keep in mind, we're only talking about 16 planes right now.

 

[FDJ2]

Lets say DL fails, what do you think will happen in a market like TLH where DL currently controls 75% of the capacity? Do you think all those people in TLH will just stop flying because DL is no longer around? Of course not. It's likely that carriers like NW and US would want to increase capacity into those markets (right now they only fly 50 seaters). So hmmmm....what's the next step up from a 50 seater? The E170.

Or perhaps the 717, or reduced frequency in larger aircraft, it could be quite a few things. All of this hypothetical of course. But what is not hypothetical is that Chq did invest in DCI through their purchase of 16 E Jets for starters. That's at least $300M- $400M. Could those E jets find a home without DCI? Maybe, maybe not. If Chq were confident that their was a huge growing market for E-Jets, the build them and they will come philosophy, then why don't they go ahead and put in an order for 100 E Jets? After all, there are plenty of customers out there looking for 70 seaters.

 

[MedFlyer]

Or perhaps the 717, or reduced frequency in larger aircraft, it could be quite a few things. All of this hypothetical of course. But what is not hypothetical is that Chq did invest in DCI through their purchase of 16 E Jets for starters. That's at least $300M- $400M. Could those E jets find a home without DCI? Maybe, maybe not. If Chq were confident that their was a huge growing market for E-Jets, the build them and they will come philosophy, then why don't they go ahead and put in an order for 100 E Jets? After all, there are plenty of customers out there looking for 70 seaters.

The 717 is going out of production. The 736 and the A318 aren't exactly selling well either.

Reduced frequency....NW and US each only fly 3x daily to TLH with 50 seaters. You propose they only fly 1x daily with a mainline plane....thats not going to work.

CHQ has quite a few E170's on order, but there are factors that limit how many they can order. Despite the demand for 70 seaters, some carriers are still limited by scope (NW). The market for 70 seaters may be there, but there's nothing CHQ can do about scope. Even at DL, CHQ can't possibly operate 100 E170's. DL's scope won't allow it given that ASA/Comair also have 70 seaters (and will be getting more). Not to mention that CHQ certainly isn't the only provider of 70 seaters in the market....CHQ can't possibly capture the entire market.

Plus, it's just smart business not to grow too fast. Unlike DL, some companies are smart enough not to bury themselves in debt. Steady, rational growth is a far better business model than wildly adding and dumping capacity like many of the legacies have done.

 

[lowecur]

Thank you MedFlyer

Sometimes I think I'm talking to R2D2.

 

[FDJ2]

You propose they only fly 1x daily with a mainline plane....thats not going to work.

Well multiple flights a day certainly aren't working, so perhaps TLH can't support daily high frequency, low lift flights, but only a couple of larger flights a day. As for the 717, Airtran could always redeploy some of their existing 717s. Maybe JBLU will come in with some 190s. Tons of other options besides a E170. Just a thought.

MedFler: "CHQ has quite a few E170's on order, but there are factors that limit how many they can order. Despite the demand for 70 seaters, some carriers are still limited by scope (NW). The market for 70 seaters may be there, but there's nothing CHQ can do about scope. Even at DL, CHQ can't possibly operate 100 E170's. DL's scope won't allow it given that ASA/Comair also have 70 seaters (and will be getting more). Not to mention that CHQ certainly isn't the only provider of 70 seaters in the market....CHQ can't possibly capture the entire market."

But according to Lowcur, scope will be gone, there will be massive consolidation and E Jets will be in high demand, so why doesn't Chq just get a jump on the game, get a head start and finance 100 E-Jets. It's a done deal.

Nope, it just doesn't work that way. Chq will only finance $100s millions of E jet debt when they have what they feel is a solid contract to operate them, otherwise they'd be buying more.

 

[FDJ2]

Sometimes I think I'm talking to R2D2.

No, you were just all over the place with your logic. Shooting from the hip if you will. A little more consistency would help.

I'll leave you and Medflyer the last word, because the discussion involves an improbable hypothetic. DAL isn't going Ch7, there are simply too many interests involved that would stand to lose $$$ if it did, and CHQ wouldn't have bought a several hundred million dollar chain attached to a 10,000lb anchor if they thought DAL were to liquidate.

 

[lowecur]

No, you were just all over the place with your logic. Shooting from the hip if you will. A little more consistency would help. Thank you, those thoughts are very soothing.

I'll leave you and Medflyer the last word, because the discussion involves an improbable hypothetic. DAL isn't going Ch7, there are simply too many interests involved that would stand to lose $$$ if it did, and CHQ wouldn't have bought a several hundred million dollar chain attached to a 10,000lb anchor if they thought DAL were to liquidate.

Click your heals three times and repeat after me, "there's no place like home, there's no place like home." AAAAAAAAAAAAHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHH!!!!!!!!!!!!!!!!!!!!!

Okay my Kraut-Mick friend, Johnny
will never get that part because I
hate that pinko punk and I'm going
to run him out of the Movies. And
I'll tell you why. He ruined one of
Woltz Brothers' most valuable
proteges. For five years I had this
girl under training; singing lessons!
Acting lessons! Dancing lessons! We
spent hundreds of thousands of dollars--
I was going to make her a star. I'll
be even more frank, just to show you
that I'm not a hard-hearted man,
that it wasn't all dollars and cents.
That girl was beautiful and young
and innocent and she was the greatest
piece of ass I've ever had and I've
had them all over the world. Then
Johnny comes along with that olive
oil voice and guinea charm and she
runs off. She threw it all away to
make me look ridiculous. A MAN IN MY
POSITION CANNOT AFFORD TO BE MADE TO
LOOK RIDICULOUS!

 

[737 Pylt]

oh brother!

Click your heals three times and repeat after me, "there's no place like home, there's no place like home." AAAAAAAAAAAAHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHH!!!!!!!!!!!!!!!!!!!!!

Okay my Kraut-Mick friend, Johnny
will never get that part because I
hate that pinko punk and I'm going
to run him out of the Movies. And
I'll tell you why. He ruined one of
Woltz Brothers' most valuable
proteges. For five years I had this
girl under training; singing lessons!
Acting lessons! Dancing lessons! We
spent hundreds of thousands of dollars--
I was going to make her a star. I'll
be even more frank, just to show you
that I'm not a hard-hearted man,
that it wasn't all dollars and cents.
That girl was beautiful and young
and innocent and she was the greatest
piece of ass I've ever had and I've
had them all over the world. Then
Johnny comes along with that olive
oil voice and guinea charm and she
runs off. She threw it all away to
make me look ridiculous. A MAN IN MY
POSITION CANNOT AFFORD TO BE MADE TO
LOOK RIDICULOUS!

Hey lowIQr:
Did your parents have any children that lived??
737