I will, when I get to where he already went. (I appreciate the problems you are facing.)

While those 700s are tired and old and lack paint, the Mesa MX at IAD has no peer. Those guys kept those birds flying and well maintained. Way fewer writeups and problems than in DFW or PHX. They will be fine birds for GoJet.

Will GoJet buy them or will they lease them from Mesa?

Leased


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Who will pay for the conversion?

There was a change in terminology used at our last employee meeting. They are going to "another united carrier" but later in the call JO said explicitly GoJet. HOWEVER - they are being leased "To united". United is making the lease payments to Mesa. So how that works between UA and GoJet is up to them but Mesa is gonna get paid regardless and GoJet is getting the aircraft.

Ya he def slipped that one out lol


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When is Mesa going to buy GoJet?

Hahaha


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Not. Though not excluded as a possibility - a foreign acquisition is more likely.

No Kushner with all the Qatari money he got

Qatari money is a foreign company? Burisma certainly is. Someone is a lil touchy regarding the Biden crime Syndicate. Biden’s and China money are a much bigger possibility. Best of luck.

"His mom lived in Long Island for 10 years or so, God rest her soul. Although she's, wait... Your mom's still alive. It was your dad that passed. God bless her soul. I gotta get this straight."

Listened in on the OO earnings call today, they’re still planning on leasing the 550’s but CC made it clear that multiple carriers were potentially in the running. Honestly he didn’t sound very optimistic about a deal even going through for any carrier.

I have no idea if UA is negotiating back and forth with GoJet and another competitor for a cheaper contract, or scope is potentially being negotiated on UA’s end voiding the need for future 550’s. I have no idea, don’t shoot the messenger, just saying the optimism is our CEO’s voice was low when asked the question.

The pandemic has been good luck for GJ pilots, kept GJ from being another TSA. Like Delta and American, United has had it with HK too and is worried about an FMLA/Guard firing story coming out. Firing SB, DH and RB did nothing because HK is the problem. United is done with us now too I believe. Since 2014 we've been attacking a guy who may not know the heads of all the big airlines well but who is close enough that he gets invited to their kids weddings.

Once more on the Mesa quarterly results call GoJet was mentioned by name as leasing the Mesa 700s on an 8 year lease. The 550s are coming and there are coming to GoJet.

The stumbling block seems to be that Mesa and SkyWest were expecting payments. HK doesn't want to pay and is hoping United negotiates something for them, United wants to end the GJ contract and have someone else fly the 550s.

I would bet my house that JO already made that offer.

I would take that bet. UA is guaranteeing the lease payments to Mesa. There’s a ton more money in leasing them. If GoJet can’t do it then someone else will but Mesa paying for the conversion then operating them isn’t profitable. Getting paid as a lessor whine someone else pays to convert them and operate them, now there’s some money. In the mean time they are flying IAD to OKC, fueling up then continuing to TUS.

Maybe PSA, with their language change on their mission statement, is going to branch out and do some United CRJ550 flying with all those new hires.

Did GoJet recall all their furloughed pilots? If so, are they all getting current or just on payroll for cares act compliance?

Sorry to have to tell you but leasing a plane to another carrier for them to operate at a profit is not more profitable than taking same paid for aircraft and operating it on your own CPA. Easier, maybe, but not more money.

No bearing the cost of conversion.
No Mx Costs
No cancellation penalties
No engine overhaul costs
Fixed guaranteed income.
Lease holder tax credits.

I beg to differ.

In most cases, with regional jets, it's not. Leasing planes can be much more profitable than operating them. It's also a good way to diversify your company to avoid the risks of relying only on capacity purchase agreements for revenue.

And Go Jet will make a profit above all those costs or they wouldn't do the deal. JO might do it because it's easier or the only deal United will give him but not because it is more profitable.

Right now it doesn’t matter. They are all headed to the desert.

Headed to the desert?? We are taking on 2 a month, anything going to a desert is just temporary until the pipeline for conversion opens up. I know a few pilots who have repoed planes from mesa to GJ

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That’s awesome to hear.

It very well could be more profitable to just lease them. Not on that list was the direct operating costs. Knowing the cockroach Mesa is, if they would make more money operating them they would.


If it costs 200k a month to lease and 200k a month in direct operating costs and UA will pay any carrier 500k, Mesa makes 200k just to lease them while Gojet clears 100k after paying the lease and all other expenses. Sure Mesa could do it and make that extra 100k themselves but they are making 200k to do nothing while they would have to spend 200k to make that extra 100K. They likely can allocate that 200k to other projects which have a higher return on investment. Obviously this is overly simplistic...

Your math is off and this is not consistent with what JO said in one of the quarterly earnings calls this summer. Mesa owns those 700s so the lease payments that GJ would pay would go to Mesa as part of the 500K. 300K per month per plane (your numbers) profit.

he was using fake numbers just to show how leasing is easier money than operating. He was correct, it is only 100k in profit. 500k revenue -200k lease payment(pure profit to Mesa)- 200k in operating cost=100k you are really bad at math

Maybe not. With this formula since mesa isn’t making a 200,000 lease payment the profit would be 300k for Mesa operating them.

true, Mesa would make more money operating them, but then they have all the headaches of operation. 300k with tons of headaches or 200k with none.

Lease payments also provide a diversified income stream. Someone else will still be on the hook for the rent even if demand goes down and utilization decreases.

You have no clue what you are talking about.

Really it seems like you’re the only one here not knowing what they’re talking about.

Mesa does not lease planes. Leasing planes to other airlines that are subject to the same market forces that you are is not diversification. GE is diversified as they are in aviation, health care, and washing machines. See the difference?

Mesa's 700s are paid for therefore no costs to offset. In a conference call that I listened to, JO specifically said he approached United about operating the jets as 550s and would prefer that to leasing. Mesa already has maintenance, training, operations, scheduling, spares, and pilots that are trained on the airframe. Every plane Mesa can operate at this point is cost reduction per acft due to the existing operation. There is more profit in operating the planes than leasing them to another competitor to operate at a profit.

Tell me how any of that is wrong.

Depends on how the agreements are structured. Operating the aircraft you’re paid fee for departure, which means you’re exposed to a lot of risk if there’s say, a global pandemic, and your block hours are greatly reduced. I would guess leases are probably a monthly fee plus a premium based on block flown. You could be in a situation where you’re making money on leases while the lessee is underwater because they’re not flying enough. I’d call that diversification.

Fair enough, but that diversification only goes as far as the health of the lessee. I doubt JO would even lease the acft. to GJ except that United is guaranteeing the payments. OO already cut them off because they couldn't pay. I don't know the history of OO leasing airframes but I would guess they do it because they got stuck with acft. they owned but couldn't place just like Mesa. I doubt it was a deliberate business decision but will stand corrected if they went out and bought aircraft for the purpose of leasing them out.

Remember Mesa is the only passenger airline in the US that made a full year profit in 2020. All quarters. Why would JO want to take on the counter party risk of a lease when he has shown that he can operate those airframes at a profit? I repeat, he specifically said in a conference call that he wanted to operate those airframes as 550s for United but that if that didn't work out he would lease or park them. That doesn't sound like a man wanting to get into the leasing business. Would he turn down the money? Of course not, but that doesn't mean it is plan A.