Originally Posted by
contrails
That is where you went wrong. You assumed they signed a CPA that made them a profit! Oh wait -- we're supposed to all assume that, because that is how companies normally operate.
The CPA that XJT entered into with CAL is actually so bad for XJT that they cannot really make a profit with the current budget. Even with labor concessions the CEO has been quoted as saying, to paraphase, 'I'm not sure we have a viable business plan.'
So that is the problem.
But, they could not negotiate higher rates because RAH, SKW, PCL, Colgan, etc. are also interested in capturing new flying and so XJT basically had the option of losing flying or signing a less lucrative deal.
you think xjt is going to be the only one signing agreements at a loss in this market? it is a sign of things to come. SKW was willing to do it at a loss because it got their foot in the door with another major. The regional industry is getting uglier and profitable contracts are going to be few and far between. It is all positioning for an "eventual" turn for the better in the industry.