Originally Posted by
dontsurf
... of course all airline stocks are down considerably with the price of oil, but expressjet's most recent 10Q is far outside the maintstream. there's a couple of disturbing things in there, highlighted in other posts and in fact in other media than this forum, that any shareholder should be very concerned about. especially if anyone decides to buy a bunch of stock and become an "activist" shareholder.
As for our 1st quarter earnings, there is a little more to it...
The $31 million loss was based of taking a $9 million loss on our Auction Rate Securities (ASRs) if we were to sell them. That is what a recent offer to buy them were at. However we did not sell them, so the actual loss was $22 million. If the company decides it needs the cash they will sell the ARSs for a loss, but they have already claimed it in the 1st quarter, so it won't reflect on any future quarters.
The loss of $22 million was with the last of our couple of training classes finishing up, we have had none since February. We had a load factor on Branded of 50% for the months of January and February. We had a pulldown on Branded from 200 flights/day to 160/flights a day starting April 1st, the start of the 2nd quarter. We also offered 150 COLA's(Company Offered Leaves of Absence), some of which some fairly senior Captains wanted and were given, starting April 1st, the start of the 2nd quarter.
So my question to those of you who think we burning cash is this: With all these cost saving measures that were taken April 1st, how is our loss going to be greater than $22 million in the 2nd quarter? Also, I would dare to say it will be greatly lower than that, unless something else hits us pretty hard. That said, I really want to see what our 2nd quarter numbers are before I jump to any conclusions. If we are still losing a lot at that point, then I will concede the point, but the company has already taken plenty of strategic moves to lower costs. That said, our April load factor for Branded was 62%, which is much better than it was in 2007, so our revenue stream will be way higher, and I doubt we would lose more money than in 2007. Wait and see what our Load Factor is for May and June and we shall see which way we are headed. We also are moving 11 more aircraft to our Charter division, which has very high margins, starting at the end of August. I think our management has a good plan and I hope we can succeed with it.