ExpressJet
11-03-2016 | 05:01 PM
#181
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One little problem with your details. UA owns the 145's. UA owns a lot (almost half) of C5. SkyWest made the statement a couple of years ago they were getting out of the 50 seat market.
SkyWest chose to give the gifted people the larger jets that are replacing the 145s and it appears they will shut down the unionized portion of their companies.
Yes I am only talking about the L-XJT side for those whinny asa guys.
SkyWest chose to give the gifted people the larger jets that are replacing the 145s and it appears they will shut down the unionized portion of their companies.
Yes I am only talking about the L-XJT side for those whinny asa guys.
I don't think SKYW ever made the statement to get out of the 50 seat market - at least not as far as I can recall or find.
The fact that UA owns all the 145 amplifies the problem for XJET. The only lever for INC is labor arbitrage and operational leverage.
They have no upside in owning / financing the equipment which they are extremely savvy about and drives quite a bit of upside on the SKYW side. Given the unfavorable cost structure at XJET leaves even less room to turn operations around then.
11-03-2016 | 05:20 PM
#182
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Where did they state the opposite of that? And what was the actual statement that you are referring to? Are we getting more planes, because I must have missed that notice on the company web site.
11-03-2016 | 08:33 PM
#183
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Joined: Nov 2016
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^^^^^
Skywest has got the boot to ASA/XJT's throat. It is going to be a slow wind down over the next few years. As Skywest continues to hire and staff, and L-ASA/XJT struggles with manning, the writing is on the wall.
Super senior, no movement (multi year FO's still on reserve, 13 year captains still on reserve), and no chance of realistically upgrading in the next 8+ years. No new metal flowing to L-ASA/XJT side as that is going to Skywest (the more profitable side). Oh yeah, and as an added bonus L-ASA picked up more LGA flying - yeeeaaaayyy. So what. DTW is going to Skywest. I am sure that pretty soon Skywest will open an ATL base as well. When that happens you'll know the death blow has been delivered to L-ASA. They're still flying ratted out -200/-700/-900 while Skywest has all the new metal flowing (and flying) their way. Contract, yeah its OK, but who cares about how good a contract you have when you're getting the blood slowly let out of you.
At one time it was a good place to be. But business is business. And Skywest is in the business of making money. L-ASA/XJT side is not. Skywest owns them and will slowly choke them off and get that flying eventually. Skywest can staff, and am very confident CC has a plan to make it so.
Skywest has got the boot to ASA/XJT's throat. It is going to be a slow wind down over the next few years. As Skywest continues to hire and staff, and L-ASA/XJT struggles with manning, the writing is on the wall.
Super senior, no movement (multi year FO's still on reserve, 13 year captains still on reserve), and no chance of realistically upgrading in the next 8+ years. No new metal flowing to L-ASA/XJT side as that is going to Skywest (the more profitable side). Oh yeah, and as an added bonus L-ASA picked up more LGA flying - yeeeaaaayyy. So what. DTW is going to Skywest. I am sure that pretty soon Skywest will open an ATL base as well. When that happens you'll know the death blow has been delivered to L-ASA. They're still flying ratted out -200/-700/-900 while Skywest has all the new metal flowing (and flying) their way. Contract, yeah its OK, but who cares about how good a contract you have when you're getting the blood slowly let out of you.
At one time it was a good place to be. But business is business. And Skywest is in the business of making money. L-ASA/XJT side is not. Skywest owns them and will slowly choke them off and get that flying eventually. Skywest can staff, and am very confident CC has a plan to make it so.
Last edited by EEECBUC; 11-03-2016 at 09:10 PM.
11-04-2016 | 06:46 AM
#185
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Joined: Oct 2015
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I understand why long-time folks continue to hold but it baffles me that they can find any new hires at all.
11-04-2016 | 01:37 PM
#186
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This is really simple…
INC is just optimizing their profitability.
XJT hasn’t been profitable for a long time and still isn’t based on the last INC earnings call. So They try to discontinue unprofitable flying. This is no different from the SkyWest side where all the UA 700 go away mostly because they are just not very profitable.
Once those aircraft EMB145 or CRJ 700 come of contract it is really about managing the tail risk of the lease financing - a place where many of the CRJ 200 already are. Ideally, they match any contract extension against the residual lease timeline which tends to be 2-3 years. And that is exactly what you see. After that it is all gravy if they get extended – or INC returns the plane, adjusts the work force via attrition and goes home happy.
So they are going for shorter term opportunities that also happen to be priced at a premium. Again, no difference between XJT and SKYW. A lot of the 50 seater flying at SKYW is short-term as well. I don't think UA is thrilled about this approach but that’s why they are propping up C5. Presumably they are willing and able to operate at lower price than INC wants to do either under XJT or SKYW. Note that a lot of the "new" SKYW flying is not with UA but AA....
Personally, I believe the 50 seaters will be here for a lot longer than everyone wants to make us believe. So these 2-3 deals will continue to roll barring any major economic downturn.
As for new dual class cabin flying, it simply comes down to unit cost. Pilot productivity is higher at SKYW than XJT and as a result unit cost are a lower (PBS vs. hard line with vacation touching and I am sure a host of other things). So the 175 stuff goes there – very basic economics really.
INC is just optimizing their profitability.
XJT hasn’t been profitable for a long time and still isn’t based on the last INC earnings call. So They try to discontinue unprofitable flying. This is no different from the SkyWest side where all the UA 700 go away mostly because they are just not very profitable.
Once those aircraft EMB145 or CRJ 700 come of contract it is really about managing the tail risk of the lease financing - a place where many of the CRJ 200 already are. Ideally, they match any contract extension against the residual lease timeline which tends to be 2-3 years. And that is exactly what you see. After that it is all gravy if they get extended – or INC returns the plane, adjusts the work force via attrition and goes home happy.
So they are going for shorter term opportunities that also happen to be priced at a premium. Again, no difference between XJT and SKYW. A lot of the 50 seater flying at SKYW is short-term as well. I don't think UA is thrilled about this approach but that’s why they are propping up C5. Presumably they are willing and able to operate at lower price than INC wants to do either under XJT or SKYW. Note that a lot of the "new" SKYW flying is not with UA but AA....
Personally, I believe the 50 seaters will be here for a lot longer than everyone wants to make us believe. So these 2-3 deals will continue to roll barring any major economic downturn.
As for new dual class cabin flying, it simply comes down to unit cost. Pilot productivity is higher at SKYW than XJT and as a result unit cost are a lower (PBS vs. hard line with vacation touching and I am sure a host of other things). So the 175 stuff goes there – very basic economics really.
There is no tail risk with the 145s. And it's not Skywest calling the shots in short term deals with these 50 seaters. For example, if UAL wanted a long term deal (>2years) that Inc can make a profit from, of course they would sign that deal. Also, UAL has given long term deals for these same 145s to TSA and Commutair. Keep in mind that Inc has negotiated and renegotiated this money losing CPA three separate times and it's still unprofitable. It's UAL who has Inc over the barrel, and along with them the employees who have done nothing wrong to deserve what's happening.
UAL has said they are planning on having less than 100 fifty seat regional jets by 2019. With 36 of the 145s now at TSA (along with the dozen or so they already have) and 40 in the process of being transferred to Commutair, I don't see how that leaves any 50 seat jets for Skywest or XJT to operate for UAL, especially since UAL has tail risk on those 145s to at least 2020.
Lastly, the line bidding and vacation touching as not as lucrative as being portrayed relative to ASA's PBS. But it is true that pilot costs are higher than Skywest. So it makes sense that they put any and all CRJ and 175 flying at Skywest.
11-04-2016 | 01:39 PM
#187
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Joined: Oct 2016
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There (mx) contract has some things that are like the pilot contract. Not advantageous to managment... yes 100 airplanes is a big enough size to be efficient, but there 100 airplanes partners dont want.. i would ask why ASA/XJT lists are not combined.. its been longer then most majors time wise to combine them... XJT is a great place to work.. but time to move on..
It's obvious Inc likes the employees to be separate.
11-04-2016 | 01:59 PM
#188
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Joined: Oct 2015
Posts: 472
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There is no tail risk with the 145s. And it's not Skywest calling the shots in short term deals with these 50 seaters. For example, if UAL wanted a long term deal (>2years) that Inc can make a profit from, of course they would sign that deal. Also, UAL has given long term deals for these same 145s to TSA and Commutair. Keep in mind that Inc has negotiated and renegotiated this money losing CPA three separate times and it's still unprofitable. It's UAL who has Inc over the barrel, and along with them the employees who have done nothing wrong to deserve what's happening.
UAL has said they are planning on having less than 100 fifty seat regional jets by 2019. With 36 of the 145s now at TSA (along with the dozen or so they already have) and 40 in the process of being transferred to Commutair, I don't see how that leaves any 50 seat jets for Skywest or XJT to operate for UAL, especially since UAL has tail risk on those 145s to at least 2020.
Lastly, the line bidding and vacation touching as not as lucrative as being portrayed relative to ASA's PBS. But it is true that pilot costs are higher than Skywest. So it makes sense that they put any and all CRJ and 175 flying at Skywest.
UAL has said they are planning on having less than 100 fifty seat regional jets by 2019. With 36 of the 145s now at TSA (along with the dozen or so they already have) and 40 in the process of being transferred to Commutair, I don't see how that leaves any 50 seat jets for Skywest or XJT to operate for UAL, especially since UAL has tail risk on those 145s to at least 2020.
Lastly, the line bidding and vacation touching as not as lucrative as being portrayed relative to ASA's PBS. But it is true that pilot costs are higher than Skywest. So it makes sense that they put any and all CRJ and 175 flying at Skywest.
I think we are arriving at the same place. INC puts assets where they can be most productive and that isn't XJET unfortunately for them. They truly have the short end of the stick but you cannot really blame INC for the dynamics either even though I am sure it doesn't feel that great at XJET.
I think you are correct in the sense that INC has renegotiated the UA contract multiple times - and it still isn't great. But again, we are in the same spot. once the contract is up INC will pull out or only sign a profitable extension. If long term deals were profitable, I am sure INC will go after them. But INC has also figured out that the ad-hoc stuff that arises when other regionals cannot cover it is even more profitable and that is there MO right now... also on the SKYW side.
50 seaters at UA... I know what has been announced and yet I only believe it when I see it. Their plans change almost monthly. And with Kirby in there I am sure the regional lift will get a whole different level of attention. Time will tell. But I don't believe that the 50 seaters will go anywhere barring any catastrophic event that results in a downturn.
11-04-2016 | 06:44 PM
#189
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Joined: Oct 2016
Posts: 336
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There is no tail risk with the 145s. And it's not Skywest calling the shots in short term deals with these 50 seaters. For example, if UAL wanted a long term deal (>2years) that Inc can make a profit from, of course they would sign that deal. Also, UAL has given long term deals for these same 145s to TSA and Commutair. Keep in mind that Inc has negotiated and renegotiated this money losing CPA three separate times and it's still unprofitable. It's UAL who has Inc over the barrel, and along with them the employees who have done nothing wrong to deserve what's happening.
UAL has said they are planning on having less than 100 fifty seat regional jets by 2019. With 36 of the 145s now at TSA (along with the dozen or so they already have) and 40 in the process of being transferred to Commutair, I don't see how that leaves any 50 seat jets for Skywest or XJT to operate for UAL, especially since UAL has tail risk on those 145s to at least 2020.
Lastly, the line bidding and vacation touching as not as lucrative as being portrayed relative to ASA's PBS. But it is true that pilot costs are higher than Skywest. So it makes sense that they put any and all CRJ and 175 flying at Skywest.
UAL has said they are planning on having less than 100 fifty seat regional jets by 2019. With 36 of the 145s now at TSA (along with the dozen or so they already have) and 40 in the process of being transferred to Commutair, I don't see how that leaves any 50 seat jets for Skywest or XJT to operate for UAL, especially since UAL has tail risk on those 145s to at least 2020.
Lastly, the line bidding and vacation touching as not as lucrative as being portrayed relative to ASA's PBS. But it is true that pilot costs are higher than Skywest. So it makes sense that they put any and all CRJ and 175 flying at Skywest.
11-04-2016 | 07:30 PM
#190
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Joined: Oct 2016
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Our objective in the fleet transition is to improve our profitability through the addition of new dual class aircraft, including the E175 aircraft, placed into service, while removing aircraft from service that have been operating under unprofitable or less profitable fixed-fee contracts.
The contract is scheduled to expire on an individual aircraft basis commencing in 2016. The final aircraft is scheduled to expire in 2017, subject to two one-year extension provisions
You should also note that the great news that was on the XJT website about the extensions does not sound as concrete as XJT management makes it sound. The SEC filings have to be truthful while the company employee propaganda can all be lies.
Just in case you want the link so you can read the thing yourself:
https://www.sec.gov/Archives/edgar/d...160930x10q.htm
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