nicholasblonde

AND AE already has a highly experienced (albeit high cost) group of pilots and FOs at the company who don't want to leave (otherwise they would have easily already went to a major/UPS/FedEx)...if Virgin did that, they could put those high-dollar AE senior guys on bigger, newer airframes, thus reducing the per pax per mile cost relative to flying ERJs. Then the guys on the ERJs would be more junior...so overall, Virgin America + AE could actually outcompete AA...newer more fuel efficient large aircraft flown by VA mainline (instead of AAs MD-80s) creating a place for the senior AE pilots to go, lower costs on the ERJ routes due to more junior pilots, and dominance in the caribbean, which could also cross-feed both Virgin domestic and Virgin Atlantic's tourist travelers. Not to mention Virgin has plenty of cash to make it happen, even if it's a long-term play...just look at Virgin Nigeria...that's definitely a long-term play with plenty of risk involved...Virgin's business strategy has always been founded on taking opportunities that more conservative companies are too risk-averse to take. I could see Branson pushing for something like this through back channels, even if VA has been forced to distance itself from the Brits.

nicholasblonde

I was wondering the same thing...but even if AMR has all the gates, it would make it even more difficult to sell AE at a decent price if all you're getting is a bunch of older planes, an expensive pilot group, some guaranteed flying, and the executive certificate.

I'm not sure what the economics are, but has anyone considered whether AE could take some of the way-senior captains and convert some of the ERJs into the bizjet version kind of like XJet does? They could create a sizeable charter fleet overnight (certification?), and maybe even venture into all biz-class flights on major routes since they already have the gates. Just throwing that out there.

ExperimentalAB

they cannot compete a/established American routes however...

ChinsFive

The thing is, none of what we are speculating would happen for a while. For AMR to make any money off Eagle they need to be worth something (it doesn't matter if they IPO it, sell it to a private equity investor, hedge fund, ect.) it has to be worth something for it to become sold for the "right price."

Because of this AMR will load Ealge up with debt and then inflate Eagle's CPA and provide some short term stability (2-3 years is my guess) by locking AMR into that flying. When the newly generated CPA allows them, AMR will pull flying from Eagle and put it out to bid or lower Eagle's rates. Now that they got the high price per share they needed from the Eagle sale (assuming an IPO) the will no longer need Eagle. They will make it difficut for Eagle to retain flying for current rates, and/or keep leased aircraft.

The result will be AMR getting cash value for the sale of Eagle, and cheaper flying be either lowering the value of Eagle's CPA, canceling parts of the CPA and trying to give their airplanes to a less expensive carrier, or binding Eagle to cheaper rates via other methods (MFN clauses come to mind.)

For all this too hapen however AMR will need to create value in Eagle by giving their CPA some stability (that can be washed away) and an impressive fees for depature or cost plus percentage contract. Due to these things Eagle won't change for a few years. It'll be kinda like what happened at ExpressJet.

JMHO

wrf2e

That is a question we have been asking ourselves. I do know that here at BNA the jetbridges are owned by American (that is why they are so crappy). I think the gates are as well. AMR still owns the B, C, and D concourses as well as the International gate that is in the A concourse from when BNA was a hub. They lease the D concourse (eagle's old spots) to the Transportation Safety Administration for office space, and about half of the C concourse is leased to Southwest. Concourse B is leased by NW, DL, US JetBlue and Continental. Out of all the gates that AMR owns here, less than 10 are used by AMR and 4 of those we use here at eagle.

sigep_nm

As much as you would like to believe it, pilot wages are a very small amount of the equation in terms of cost. Here is an example for: An airliner pulls up to gate, engines running and burning a significant amount of fuel. If you are at a good airline you as a pilot are still getting paid. You are waiting there because there arent enough $7 an hour rampies to marshall you in. You finally get parked and wait another ten minutes for a jet bridge jockey (probably making 10 an hour) to pull the bridge up. In this twenty minute period the company has paid for twenty extra minutes of flight crew wages, and probably ten minutes of $100 dollar a barrel of oil/gas. This happens an average of three to four flights a day per aircraft, multiplied to by 365 days per year. Lets just say the average flight crew combined is making $110 an hour, and this delay results in an extra hour of block time per day. 110 x 365 = 41000 ish. Now lets say that it is a fleet of 50 aircraft, which results in a yearly cost of 2.1 Million. Now if we were to take the same scenario and add fuel into the equation. Lets say the burn on the ground is 1200lbs per hour, which is about 171 gallons of fuel. Now lets take jet A at $4.00 a gallon. So approximately $680 per hour of fuel burn at a gate. 680 x 365 = $249,660 for one aircraft per year to wait for rampies (remember these are $7 an hour rampies) 249, 660 per aircraft for a 50 aircraft fleet results in 12,483,000 in cost. 2.1 million in pilot wages vs. 12.4 million for fuel cost, all because most companies wont staff there ramps properly. Do you still believe that a senior pilot group is hurting a company? These numbers arent 100% accurate but they are pretty damn close. If you put the kool aid down for a few days its amazing how clear some things become.

FlywithStyle

Ok So how about this situation. I live in LA have about 400/100. My life is in LA and cannot be changed for the time being. So I have been thinking about picking AE because of the domicile preferential choice. I am looking to just build my hours until I am ATP qualified and then a few more maybe 2000 and then move to more of a corporate job that awaits me. So with all this talk if my plans find an airline just to build some time and 121 experiance would AE be fine for a couple of years?

nicholasblonde

If you gotta be in LA and you have 400/100 and you just need some 121 time up to 2000 hours then heck yeah, AE is perfect for you!

naley70b

Thats all well and true, maybe ya'll should spend your breath dissuading people from going to Mesa, GoJets and the likes, so that we can actually make progress in our industry instead of regressing....just a thought from a simple turboprop FO.

maveric311

Didnt get the Xjet job. They seem to be realy tight in the interview proces. I didnt make any mistakes and I thought my HR interview went pretty well. I have 1035 and 200 multi all in Cessna's and Pipers and I didnt get the job? I think they selecting about 2 people out of 22 that interviewed that day. They said they had many people in a pool and no set plans for a class. the best estimate they could give us for the next class date was March.

I think Eagle will be a good place to work for a while maybe not a career but a nice place to get initial expereince. Plus if a Virgin Sale ever goes through, WOW! but I think somthing like that is doubtfull. who knows. thanks for all the responses on my first post guys. hope to see some of you out there on the line in the coming year.