Originally Posted by
slowplay
The aircraft fleet booklet show 618 total RJ's in the Delta system as of 1/1/12. That number is continuing to decline, as there is only 1 delivery scheduled for this year and CMR is forecast to shed at least 24 CRJ-100/200 by this fall. I believe there will be a lot more change in that segment of the industry. Pinnacle Corp and Republic are both having signficant financial problems, and Skywest, Inc isn't making any money. The following was in a Pinnacle 8-K last week and is from a letter to all employees:
What happens next is not yet clear. Our hope is that we can reach agreement with all of the necessary parties on the changes we need to implement our turnaround plan and ensure the company’s continued viability. It is also possible that we may ultimately conclude the best way for us to achieve our goal is to use the court-supervised Chapter 11 process which, as you know, many other airlines have used successfully in recent years. Going that route could enable the company to change or cancel key contracts, obtain financing and take other important actions to implement the turnaround plan, all while continuing normal business operations.
I didn't think Pinnacle could "force" us to pay them more just by declaring BK. If we hold the line with them as well as agressively enforce their performance end of the CPA/ASA the best they could hope for would maybe a temporary injunction delaying how soon we could dump them. But if they come to us for any relief whatsoever we should tell them to pound sand and use it as an opportunity to cull even more 50 seaters at the very least.
While I'm sure we want the full compliment of 255 large outsourced RJ's in our "armada" Pinnacle has zero leverage over us even with those airframes as there are tons of other carriers tripping all over themselves to instantly add whatever they can't do at the prices they low balled in their bid for the work in the first place. For any planes they have that we may be directly leasing or owning, those could be transfered almost instantly.
In either case it seems like a great opportunity to reduce 50 seaters and depending on the timing reducing 51-76 seaters that we allow to be outsourced.