Originally Posted by
Bond
Man, some of you guys just can't see the forest from the trees! They have the final say, and have to approve any potential buy out/merger etc.
Unless, skywest is willing to operate the Coex side at a potential loss, the rates we're giving CAL cannot get any cheaper, not to metion the fact that CAL already expressed interest in reducing it's regional jet feed...oh and did I forget scope?
I can see it just fine. Continental only cares that the flights get done, with reasonable performance. I understand they have the final say, my point was that they don't have a compelling reason to stop SKW from purchasing XJT.
Further, SKW will easily be able to fly cheaper than XJT for Continental. The current deal between XJT and CAL pays XJT around 10% margins. If SKW is willing to accept 7% that would have save CAL somewhere in the ballpark of $9,000,000 per quarter.
Edit: Just saw the other thread on SKW already having approval from Continental for the deal. I guess it points to SKW being willing to accept lower margins than XJT.