Originally Posted by
skypilot35
Most people know that OO is the profitable side of INC. That is mostly due to the poor contracts that were bought with XJT. What happens when the XJT contracts expire? There is no way to ever recoup the purchase cost by selling off XJT and its assets. These guys are all about money in the pockets. They are also accountable to the share holders.
A consolidated operating certificate, pilot group, aircraft fleet, training facility is practical. I cannot imagine that this option has never been discussed or considered. Maybe not next year, but within the next 5 years. I would like to see the 5 year plan. We will have 2 fleet types. CRJ / ERJ (not sure about the MRJ).
Just to add, it wasn't just poor contract bought with the purchase of xjt. Skywest literally negotiated the contract xjt had with cal before they bought them. Thanks to the whipsaw.
Originally Posted by
Squallrider
They would need huge fences because the costs to train and force displace people would be huge. This discussion has been going on since expressjet was bought. Synergies would be a pro if you think expressjet will be around, and with all the 50s they have its not likely unless they become small and then the value of synergy goes down anyway. I agree it's all about money but they can't keep losing it either by pouring it into expressjet
No merger ever forces a flush of aircraft, seat and domicile. For example, the current merger stipulation between ASA and xjt does not allow any displacements because of the seniority list integration. That would only be the product of any subsequent a vacancies.
Originally Posted by
Squallrider
Economies of scale involves large number of aircraft (training costs/maintenance etc), if the 145 shrinks to nothing (believe its over a hundred coming off express jet) you lose economies of scale. If you eliminate or reduce departments that are associated with the 145 which is every department HR, scheduling,maintenance, training, then you lose all the synergy. If we merged with Expressjet, how would we gain syngery in the training department? We aren't suddenly going to fit 145 sims in SLC or cross train instructors, the cost would be the same because facilities and personnel wouldn't change. How many people are in our scheduling department now? Considering how long our bids come out Im guessing not many (joke).
As for synergy savings, even a small xjt operation has an over head cost. But it would be a larger cost as a percentage of the operation because you wouldn't be spreading those costs over more aircraft. So there will always be synergy savings. More so with a smaller operation.