What's the Latest at ASA/Expressjet?
#2871
ExpressJet and Delta are parties to the ExpressJet Delta Connection Agreement, originally dated as of September 8, 2005. As of December 31, 2012, ExpressJet operated 18 CRJ900s, 41 CRJ700s and 93 CRJ200s for Delta under the ExpressJet Delta Connection Agreement. As of December 31, 2012, ExpressJet was operating more than 750 Delta Connection flights per day between Atlanta or Detroit and outlying destinations. Under the ExpressJet Delta Connection Agreement, Delta is entitled to all passenger, cargo and other revenues associated with each flight. Commencing in 2008, ExpressJet obtained the right to maintain its percentage of total Delta Connection flights that it had in 2007, so long as its bid for additional regional flying is competitive with bids submitted by other regional carriers.
In exchange for providing the designated number of flights and performing ExpressJet's other obligations under the ExpressJet Delta Connection Agreement, ExpressJet is scheduled to receive from Delta on a weekly basis (i) specified fixed rate payments for each completed flight, which are intended to pay for certain direct costs related to Delta Connection flights plus (ii) if ExpressJet completes a certain minimum percentage of its Delta Connection flights, an amount equal to a certain percentage of the direct costs (not including fuel costs) related to the Delta Connection flights. Costs directly reimbursed by Delta under the ExpressJet Delta Connection Agreement include costs related to fuel, ground handling, and aircraft engine maintenance and aircraft ownership. The ExpressJet Delta Connection Agreement also provides for incentive compensation based upon ExpressJet's performance, including on-time arrival performance and completion percentage rates.
The ExpressJet Delta Connection Agreement provides that, upon the fifth anniversary of the execution of the agreement (September 8, 2010), Delta obtained the right to require that certain contractual rates under that agreement shall not exceed the second lowest rates of all carriers within the Delta Connection Program. On November 19, 2010, ExpressJet (formerly Atlantic Southeast) reached an agreement with Delta related to the second lowest rate provisions to be applied under the ExpressJet Delta Connection Agreement. As a result of that agreement, ExpressJet and Delta have established the contractual rates which will apply under the ExpressJet Delta Connection Agreement through December 31, 2015.
The ExpressJet Delta Connection Agreement is scheduled to terminate on September 8, 2020, unless Delta elects to exercise its option to extend the term for up to four additional five-year terms. The ExpressJet Delta Connection Agreement is subject to early termination in various circumstances including:
•
if ExpressJet or Delta commits a material breach of the ExpressJet Delta Connection Agreement, subject to 30-day notice and cure rights;
if ExpressJet fails to conduct all flight operations and maintain all aircraft under the ExpressJet Delta Connection Agreement in compliance in all material respects with applicable government regulations;
•
if ExpressJet fails to satisfy certain performance and safety requirements;
•
if, under certain circumstances, Delta has a right to terminate the SkyWest Airlines Delta Connection Agreement;
•
if the other party files for bankruptcy, reorganization or similar action (subject to limitations imposed by the U.S. Bankruptcy Code) or if either party makes an assignment for the benefit of creditors; or
•
if ExpressJet fails to maintain competitive base rate costs (provided, however, that ExpressJet has the right to adjust its rates prior to any such termination).
During 2012, we reached an agreement with Delta to add 34 additional used dual-class Bombardier regional jet aircraft in exchange for the early termination of 66 CRJ200 aircraft under our Delta Connection Agreements. All 34 dual-class aircraft will be operated under the terms and conditions of the SkyWest Airlines Delta Connection Agreement regardless of whether SkyWest Airlines or ExpressJet operate the aircraft. The 34 additional aircraft consist of five CRJ700s and 29 CRJ900s. As of December 31, 2012, we had taken delivery of 15 CRJ900s and five CRJ700s. Of the 20 dual-class aircraft that were in operation as of December 31, 2012, ExpressJet was operating 11. The remaining lease terms of the 34 additional aircraft currently run through December 31, 2022. We anticipate that the 14 remaining CRJ900 aircraft will be delivered by June 2013. We anticipate that all 66 CRJ200 aircraft will be removed from the Delta Connection Agreements by December 31, 2015. Of the 66 CRJ200s scheduled to be removed from Delta operations, 41 CRJ200s are subleased from Delta for a nominal amount, which are scheduled to be returned to Delta without obligation to us.
In exchange for providing the designated number of flights and performing ExpressJet's other obligations under the ExpressJet Delta Connection Agreement, ExpressJet is scheduled to receive from Delta on a weekly basis (i) specified fixed rate payments for each completed flight, which are intended to pay for certain direct costs related to Delta Connection flights plus (ii) if ExpressJet completes a certain minimum percentage of its Delta Connection flights, an amount equal to a certain percentage of the direct costs (not including fuel costs) related to the Delta Connection flights. Costs directly reimbursed by Delta under the ExpressJet Delta Connection Agreement include costs related to fuel, ground handling, and aircraft engine maintenance and aircraft ownership. The ExpressJet Delta Connection Agreement also provides for incentive compensation based upon ExpressJet's performance, including on-time arrival performance and completion percentage rates.
The ExpressJet Delta Connection Agreement provides that, upon the fifth anniversary of the execution of the agreement (September 8, 2010), Delta obtained the right to require that certain contractual rates under that agreement shall not exceed the second lowest rates of all carriers within the Delta Connection Program. On November 19, 2010, ExpressJet (formerly Atlantic Southeast) reached an agreement with Delta related to the second lowest rate provisions to be applied under the ExpressJet Delta Connection Agreement. As a result of that agreement, ExpressJet and Delta have established the contractual rates which will apply under the ExpressJet Delta Connection Agreement through December 31, 2015.
The ExpressJet Delta Connection Agreement is scheduled to terminate on September 8, 2020, unless Delta elects to exercise its option to extend the term for up to four additional five-year terms. The ExpressJet Delta Connection Agreement is subject to early termination in various circumstances including:
•
if ExpressJet or Delta commits a material breach of the ExpressJet Delta Connection Agreement, subject to 30-day notice and cure rights;
if ExpressJet fails to conduct all flight operations and maintain all aircraft under the ExpressJet Delta Connection Agreement in compliance in all material respects with applicable government regulations;
•
if ExpressJet fails to satisfy certain performance and safety requirements;
•
if, under certain circumstances, Delta has a right to terminate the SkyWest Airlines Delta Connection Agreement;
•
if the other party files for bankruptcy, reorganization or similar action (subject to limitations imposed by the U.S. Bankruptcy Code) or if either party makes an assignment for the benefit of creditors; or
•
if ExpressJet fails to maintain competitive base rate costs (provided, however, that ExpressJet has the right to adjust its rates prior to any such termination).
During 2012, we reached an agreement with Delta to add 34 additional used dual-class Bombardier regional jet aircraft in exchange for the early termination of 66 CRJ200 aircraft under our Delta Connection Agreements. All 34 dual-class aircraft will be operated under the terms and conditions of the SkyWest Airlines Delta Connection Agreement regardless of whether SkyWest Airlines or ExpressJet operate the aircraft. The 34 additional aircraft consist of five CRJ700s and 29 CRJ900s. As of December 31, 2012, we had taken delivery of 15 CRJ900s and five CRJ700s. Of the 20 dual-class aircraft that were in operation as of December 31, 2012, ExpressJet was operating 11. The remaining lease terms of the 34 additional aircraft currently run through December 31, 2022. We anticipate that the 14 remaining CRJ900 aircraft will be delivered by June 2013. We anticipate that all 66 CRJ200 aircraft will be removed from the Delta Connection Agreements by December 31, 2015. Of the 66 CRJ200s scheduled to be removed from Delta operations, 41 CRJ200s are subleased from Delta for a nominal amount, which are scheduled to be returned to Delta without obligation to us.
In addition, the Delta Connection Agreements also provide that, beginning with the fifth anniversary of the execution of the agreements (September 8, 2010), Delta has the right to require that certain contractual rates under those agreements shall not exceed the second lowest rates of all carriers within the Delta Connection Program. During the fourth quarter of 2010, SkyWest Airlines and Atlantic Southeast reached an agreement with Delta on contractual rates satisfying the second-lowest rate provision and agreed on rates through December 31, 2015. Delta additionally waived its right to require that the contractual rates payable under the Delta Connection Agreements shall not exceed the second lowest of all carriers within the Delta Connection Program through December 31, 2015. As a result of the negotiated adjustment of the contractual rates under the Delta Connection Agreements, our passenger revenues for the year ended December 31, 2011 were approximately $21.7 million lower than they would have been under the rates that existed prior to the adjustment. Additionally, SkyWest Airlines and Atlantic Southeast finalized certain contractual rates from September 8, 2008 through December 31, 2010 with Delta. As a result, we recorded $10.3 million in additional revenue as a result of the finalization of contractual rates during the quarter ended December 31, 2010. Under the terms of the SkyWest Airlines and ExpressJet Delta Connection Agreements, Delta has agreed to compensate SkyWest Airlines and ExpressJet for initiatives that directly result in pass through cost savings. Delta agreed to share such savings with SkyWest Airlines and ExpressJet on an equal basis for a twelve-month period. During the three months ended December 31, 2010, Delta paid, and SkyWest Airlines and Atlantic Southeast recognized, approximately $6.9 million in cost savings revenue. We did not receive similar payments during the year ended December 31, 2011. In addition, under our ExpressJet Delta Connection Agreement and our SkyWest Airlines and ExpressJet United Express Agreements we are paid an incentive compensation upon the achievement of certain performance criteria. Our passenger revenues for the year ended December 31, 2011 were $18.9 million lower, compared to the year ended December 31, 2010, due primarily to our receipt of lower incentive payments.
Also, looks like the 80% in Atlanta rule is gone, replaced by keeping current percentage of DCI flights, as long as bid is competitive
#2872
/sigh
Page 49 of the Skywest Inc 2012 10K spells it out for everyone to see.
The SEC required Inc to report them separately a while ago. But I'm sure all you guys knew that.
http://www.sec.gov/Archives/edgar/da...12817z10-k.htm
Page 49 of the Skywest Inc 2012 10K spells it out for everyone to see.
The SEC required Inc to report them separately a while ago. But I'm sure all you guys knew that.
http://www.sec.gov/Archives/edgar/da...12817z10-k.htm
#2873
Banned
Joined APC: Dec 2007
Position: EMB 145 CPT
Posts: 2,934
/sigh
Page 49 of the Skywest Inc 2012 10K spells it out for everyone to see.
The SEC required Inc to report them separately a while ago. But I'm sure all you guys knew that.
http://www.sec.gov/Archives/edgar/da...12817z10-k.htm
Page 49 of the Skywest Inc 2012 10K spells it out for everyone to see.
The SEC required Inc to report them separately a while ago. But I'm sure all you guys knew that.
http://www.sec.gov/Archives/edgar/da...12817z10-k.htm
#2874
Skywest must have a very lucrative CPA with United. Expressjet is much bigger than Skywest, yet Skywest brings in much more revenue. The rates paid to Skywest and Expressjet for Delta flying are the same, as both carriers negotiated the 2nd lowest cost rate with Delta.
The E145 CPA is probably hampering revenue as well, which ironically, Skywest Inc did to themselves
Profitablity of the contracts seem to lean heavily on performance incentives, hence the reason management is going crazy with all these nexlev mind meld meetings after horrific performance this past quarter.
The E145 CPA is probably hampering revenue as well, which ironically, Skywest Inc did to themselves
Profitablity of the contracts seem to lean heavily on performance incentives, hence the reason management is going crazy with all these nexlev mind meld meetings after horrific performance this past quarter.
#2875
Banned
Joined APC: Dec 2007
Position: EMB 145 CPT
Posts: 2,934
Skywest must have a very lucrative CPA with United. Expressjet is much bigger than Skywest, yet Skywest brings in much more revenue. The rates paid to Skywest and Expressjet for Delta flying are the same, as both carriers negotiated the 2nd lowest cost rate with Delta.
The E145 CPA is probably hampering revenue as well, which ironically, Skywest Inc did to themselves
Profitablity of the contracts seem to lean heavily on performance incentives, hence the reason management is going crazy with all these nexlev mind meld meetings after horrific performance this past quarter.
The E145 CPA is probably hampering revenue as well, which ironically, Skywest Inc did to themselves
Profitablity of the contracts seem to lean heavily on performance incentives, hence the reason management is going crazy with all these nexlev mind meld meetings after horrific performance this past quarter.
#2876
Gets Weekends Off
Joined APC: Aug 2008
Posts: 265
6/4/2012: Word on the street is there will be a TA by summers end. The SLI will somewhat favor the ASA side. It is also being said that do not be to surprised if Delta comes in and buys some of the pilot group if not all. With Delta's lightning speed contract TA, and what looks like the same with Expressjet, makes one wounder why the rush. let's just say there is something in the works. Can't say much for the other regionals, but it appears that this Delta TA will benefit the new Expressjet, more than any other regional, for the better. Things are definitely looking good as time goes forward.
#2877
Surprised a discussion hasn't started here about the firing of ASA's Negotiations Chair. Good move IMO
#2878
Gets Weekends Off
Thread Starter
Joined APC: May 2012
Posts: 344
Yea, things did change for the worse. CT came to the union and provided a pretty good contract, prior to pinnacle doing what they did, and stated that this is the best The company can offer with the emphasis of knowing the union would not believe him. It is believed that He also knew what was going to happen with pinnacle thus the offer. Union turned it down but now regrets that decision. It's all we can do to keep what we have.
#2879
I think the biggest problem with CM is that he has held the position too long, giving him a tendency to miss the forest for the trees. Too out of touch with the line pilots. I really believe these paid, full time ALPA positions need to have term limits.
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