Originally Posted by
Paid2fly
The company is not "using any capital to cover no changes for all in bad times"...SkyW is one of the very few companies still showing a large profit quarter after quarter(even Southwest has been losing money for the last 4 or 5 quarters)!! The fact that we are still showing an operational and net profit would indicate they are actually adding to their surplus capital. They purchased ASA with some of that capital, and have been investing in a carrier in Brazil to the maximum amount allowed by the laws there.
As far as furloughs go the last several dozen times I've tried to drop a trip or even take vacation/user I've been denied due to insufficient reserves. I've also been called on my days off because they supposedly were below minimum reserves "system wide"! It appears they aren't really all that "overstaffed"???!!!!
I did not say that the company was using the Capital. I said that some people say "but we have almost a billion in cash" when the company cuts things fo us. What I ment is that having the billion is not going to prevent the company from trying to save while the profit is getting less and less. The cash capital is for other things like investments that you mentioned, save the company if UA closes the doors, etc.
ASA was bought years ago and the purchase cost itself is not relevant to the financial situation today but it has cost us a lot of the ASA / Skywest gross profit for the quarter when they had to park 60 airplanes and cancel over 270 flights in a short period.
I am not at all saying that ASA is not good for us or that they do not produce a profit for Skywest. They have and I believe they will continue.
Yes we are showing a profit but it has gone down to lower levels and it does not take much happening in a quater for that to turn to negative numbers. This mean that the company have been using more of the gross profit to cover operational cost showing at the end lower net profit. You can tell that by looking at the revenue and flown seat miles against the cost profile and compare it to earlier years. The cost profile has not decreased in the same way as the profit. The cost profile has actually grown a lot.
The company knows that a $15 - 60 million net profit in a quarter is very marginal for the size of the Skywest operation and it is looking at every posibility to cut the cost and increase that net profit without any furloughs on the pilot side. That is a difficult task.
On the furlough side. The operation is big and will show differences from base to base and I had the same opinion that you have until recently.
Talking to a very high positioned source change my mind. I was told we are way overstaffed.