Originally Posted by
MinRest
Why on earth would XO by that dump...
I’ve read the posts on APC and other info about RW. My first brush assessment (which is worth zero..6-9 month assessment, much better) is this will be good for XO and RW.
First of all, XO has 51% US ownership and RW will fall under that organizational structure. RW we are told will still operate independently as they do now. Will their tails fall onto the XO certificate in the future, who knows but for now it is a good thing and my reasons are below.
1. I don’t know the purchase price but suspect XO got a good price. Interest rates are at an all time low. Financial institutions found this a good deal to support. Look around at other consolidations in private jet world, consolidation is happening. Previous struggles with RW showed they were cash strapped..owner (creditors) must’ve found the offer OK enough to allow owner/founder to probably slowly transition out. I would expect new leadership within 12 months or less but purely speculating..not uncommon in these type of buyouts.
2. XO when consolidated with Vista Jet suddenly had an “up-sell” options for clients, CL350 or Global. XO had been off loading to other 135 carriers clients who requested light aircraft/less expensive options for flights 2 hrs or less. Not efficient in XO equipment. RW has that equipment and now that revenue will stay in house.
3. New Memberships have increased dramatically since April...yields have decreased according to multiple 135 leaders. Yields on shorter flight are higher and demand is higher due to costs and simply many who use to fly commercially were flying on short haul but don’t want the exposure to Covid. XO didn’t have the type equipment needed to be profitable on shorter routes, but now they do with RA.
4. Plans to purchase 50 more light aircraft shows confidence this market will be around post Covid. Easier to do that with an established 135 company. Plug and play
5. Mx facility. XO will be able to now use a wholly owned subsidiary for some of Mx work..would expect costs to be lower than using our primary Duncan Mx contractor. XO has tie in with JSSI, the Costco in plane service, management, parts and Mx so the RW facility gets that benefit that they didn’t have before.
6. More traffic flowing to RWA...broader marketing ties with XO versus using whatever RWA had before. Plus the ability to have fewer empty legs wit tie ins to Jetsmarter program. Filling empty seats and crowdsourcing.
Lots of speculation above and no inside knowledge other than looking at press releases and public info. Realize RWA pilots in the past have had MAJOR issues with RWA management/ops.
Don’t know current temp of water at RWA but this has the makings of a better future IMHO than the cards tRWA pilots current have in their hands.
It’s been a little over a yr since VJ/XO joined forces but having good leadership at the top, i.e. Kevin Thomas, is a good thing and I suspect he will be closely watching how the RWA ops melds into a solid operation that our clients will see as seamless as they flow between aircraft/personnel.
It would be a foolish investment if that was not the case..lots of self interest into making the RWA brand better.
again you get what you paid for with the drivel above.