UAL / CAL scope

[badog]

What do the skw and shuttle America pilots think will happen if they actually get this scope on the 70 seat jets? I'm pretty sure jerry is counting on these 70's for his future? We all know what CAL thinks of the crj 200! This COULD back skw into a corner. Discuss......

 

[Cpt Oveur]

Jerry is the only one with a check account at big, and with oil going no where but up, e's the only one with money to loan United. With that said, he's going to ensure that as much of his flying is protected...

 

[badog]

jerry has a dog in the fight but no say.
skw is just a contracted feed provider.
ual/cal is making money.
Scope could partially kill him off, (and everyone else)

 

[EngineOut]

jerry has a dog in the fight but no say.
skw is just a contracted feed provider.
ual/cal is making money.
Scope could partially kill him off, (and everyone else)

Do you guys realize that SkyWest is in a LONG TERM contract with United? In excess of 10 years for most of the airframes from the DOS. If United were to terminate the contract to bring the flying in-house, they'd have to essentially pay SkyWest as if they had flown those years for United. It would cost United millions if not billions to do so. This reason alone is why it's never going to happen...that is unless the UAL/CAL pilots intend to concede millions-billions of dollars in wages to pay for it. I'm guessing not, but who knows?

 

[NotTooBad]

Jerry can loan money but put it in scale - SKYW total value is equal to quarterly loses UAL has taken.

 

[badog]

Do you guys realize that SkyWest is in a LONG TERM contract with United? In excess of 10 years for most of the airframes from the DOS. If United were to terminate the contract to bring the flying in-house, they'd have to essentially pay SkyWest as if they had flown those years for United. It would cost United millions if not billions to do so. This reason alone is why it's never going to happen...that is unless the UAL/CAL pilots intend to concede millions-billions of dollars in wages to pay for it. I'm guessing not, but who knows?

Scope would not rescind the 10 year agreement but would limit the air frames and reduce or eliminate them as the contract comes due. It's not, "all or nothing" but a decrease over time, Just a thought. Either way, regional feed is about to shrink.

 

[Thebadcat1313]

Scope would not rescind the 10 year agreement but would limit the air frames and reduce or eliminate them as the contract comes due. It's not, "all or nothing" but a decrease over time, Just a thought. Either way, regional feed is about to shrink.

For some Carriers, regional feed will shrink... Mesa for example with their United Contract. Big Regional Carriers like SkyWest become cheaper as they grow.... In essence being able to provide the same service at a fraction of the cost. Companies like this will have no problem competing in a new Regional environment. About 20 years ago I recall some aviation analysts saying there would be 3 or 4 Legacy Carriers and 2 or 3 Regional Carriers as Market dynamics dictate. That is slowly becoming the reality. Company's, as they shrink (Comair, Mesa) will not be able to compete and will be absorbed and/or liquidate. The only flying Regional Carriers will acquire in the new environment is at the cost of another. Or by merger/acquisition.

 

[WWEfan]

Jerry will take over the regional industry in the U.S. and dictate the price of feed. That is how Skywest, Inc. will survive.

 

[nimtz]

Jerry is the only one with a check account at big, and with oil going no where but up, e's the only one with money to loan United. With that said, he's going to ensure that as much of his flying is protected...

It's not 2005 anymore and I can assure you that Jamie Dimon will line up plenty of financing before anyone drops to their knees before Uncle Jerry.

http://ycharts.com/companies/UAL/cash_on_hand

 

[bluechunks]

Do you guys realize that SkyWest is in a LONG TERM contract with United? In excess of 10 years for most of the airframes from the DOS. If United were to terminate the contract to bring the flying in-house, they'd have to essentially pay SkyWest as if they had flown those years for United.

The important thing is to keep telling yourself that is true. Once you say it enough times you will actually believe it.

Here's the secret that every regional pilot in the the U.S. must learn (and hopefully not the hard way): you are working for a glorified crew leasing company and not an airline.

If your company is not selling the tickets, or setting the schedules, or buying the gas, or paying the leases on aircraft, or landing fees, or gate rent, ect.... then your company is simply a service provider whose business is selling staffing. This is why it so so very important for pilots to get the flight time and move as history is filled with regional airlines that provided lift for UA and UA later tossed aside for the next low bidder.

 

[AntiJedi]

If your company is not selling the tickets, or setting the schedules, or buying the gas, or paying the leases on aircraft, or landing fees, or gate rent, ect.... then your company is simply a service provider whose business is selling staffing.

Well, considering that SkyWest is doing all of that except selling the actual ticket is many of its markets---especially in markets that DL/UA pilots have never touched, yet think they've always owned---I think it's pretty safe to say that they aren't "just a staffing provider."

 

[nimtz]

Well, considering that SkyWest is doing all of that except selling the actual ticket is many of its markets---especially in markets that DL/UA pilots have never touched, yet think they've always owned---I think it's pretty safe to say that they aren't "just a staffing provider."

Yeah I hear the RASM's out of St George are killer!

 

[AntiJedi]

Yeah I hear the RASM's out of St George are killer!

They refuse to move HDQ, and they need the seats to get the employees in and out. You're right, but noting the above, they're willing to eat it.

 

[bluefin]

Well, considering that SkyWest is doing all of that except selling the actual ticket is many of its markets---especially in markets that DL/UA pilots have never touched, yet think they've always owned---I think it's pretty safe to say that they aren't "just a staffing provider."

How do you figure that? Regionals don't pay for schit! if they had to pick up the tab, they would not longer be in business. Look at UAL financials, they pay for everything, "fee for departure" even if the plane is empty!! The only way to stay competitive at the regional level is to take it out of the employee's, low wages, take away their health care, i.e. skywest!

 

[AntiJedi]

How do you figure that? Regionals don't pay for schit! if they had to pick up the tab, they would not longer be in business. Look at UAL financials, they pay for everything, "fee for departure" even if the plane is empty!!

I wasn't talking about other regionals; I was talking about SkyWest. SkyWest has a sizeable at-risk operation. Most of it is the Brasilias, but there's also MKE, and certain DEN and ORD routes. At no point did I say that ALL, or NONE of their flying was at-risk.

 

[bluechunks]

Well, considering that SkyWest is doing all of that except selling the actual ticket is many of its markets---especially in markets that DL/UA pilots have never touched, yet think they've always owned---I think it's pretty safe to say that they aren't "just a staffing provider."

I wasn't talking about other regionals; I was talking about SkyWest. SkyWest has a sizeable at-risk operation.

Uh huh.

The revenue-sharing (i.e. "at risk") flying that Skywest does for UAL is a tiny portion of the flat-rate ("fixed fee") total.

"As of December 31, 2010, SkyWest Airlines operated 70 CRJ700s, 83 CRJ200s and 38 Brasilia turboprops under the SkyWest Airlines United Express Agreement..."​

"As of December 31, 2010, 29 of the 38 Brasilia turboprops and 18 of the 83 CRJ200s SkyWest Airlines operated under the SkyWest Airlines United Express Agreement were operated under a revenue-sharing arrangement."

Source: Skywest 2010 Annual Report​

Here's some fun with math: Skywest operates 191 aircraft for UA and only 47 (24%) are revenue sharing. But out of the 47, over 60% are 30-seat turboprops.

In reality the core business of Skywest (in reference to UA) is that of a flat-rate fixed-fee per departure operator as the capacity of the Brazilia fleet is tiny in reference to the size of either Skywest or United. Add-in ASA and ExpressJet and the ratios are off the scale.

 

[XPOO]

To further what AntiJedi was saying, the following is all at-risk flying for SkyWest (as of February 2011):

All SLC based EMBs (SGU, CDC, RKS, EKO, TWF, SUN, GCC, PIH, COD, WYS)
All DEN based EMBs (RKS, GCC)
All PDX based EMBs (SEA, RDM, EUG, OTH, LMT)
All MKE AirTran routes (STL, DSM, PIT, OMA, IND, CAK)
Certain LAX routes (CLD, IMP, SBA, SBP, MRY, ELP, SGU, FAT/LAS, PSP/LAS)
Certain SFO routes (SBP, ONT, BFL, MOD, SMF, CIC, RDD, ACV, CEC, LMT, RDM, PSC, OTH, SMF/ACV, ACV/CEC)
Certain DEN routes (MAF, MKE)
Certain ORD routes (EAU, CWA, DLH, CMX, MKG, MKE, FWA, MBS, AVL, PAH, SPI)

I would say that is more at-risk flying that any other regional in the country.

 

[AntiJedi]

Here's some fun with math: Skywest operates 191 aircraft for UA and only 47 (24%) are revenue sharing. But out of the 47, over 60% are 30-seat turboprops.

In reality the core business of Skywest (in reference to UA) is that of a flat-rate fixed-fee per departure operator as the capacity of the Brazilia fleet is tiny in reference to the size of either Skywest or United. Add-in ASA and ExpressJet and the ratios are off the scale.

Oh yay! Finally a reference!

As I said in my previous post, a sizeable portion portion of the flying is at-risk. It may not be the lion's share, but it's there, and it's noticable. For UA, the at-risk is limited in percentage via contract; there's nothing that can be done about that, except try and amend the contract.

As for ASA and Expressjet, well, if you use the INC umbrella, yeah you'd be right; however, since all of the carriers operate seperately, and under different contracts---not to mention that ASA and Expressjet will be busy merging---I intentionally avoided discussing them.

 

[strega7]

Certain SFO routes (ACV)

Are you sure about this one?

 

[bluechunks]

As I said in my previous post, a sizeable portion portion of the flying is at-risk. It may not be the lion's share, but it's there, and it's noticable.

This is where we disagree. IMHO, it is neither sizable or noticeable and that's the reason why it's already planned to go away over the next 36 months.