Mesa's Future
01-28-2008 | 10:44 AM
#11
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From: 737 Right
I don't know for sure, but I doubt that contracts between regionals and mainline contain such covenants. However, the financial condition of a regional may influence their ability to acheive other contractual metrics (such as dispatch reliability and on-time performance).
01-28-2008 | 10:49 AM
#12
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Joined: Jan 2006
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From: Engines Turn or People Swim
Regional Question:
When mainline carriers contract with a regional to provide feed, are there specific reasons that the mainline carrier can void the contract? My thinking is that like certain financial instruments, if xyz goes below abc then you cash us out. Do the mainline carriers state "if your balance sheet looks a certain way, and your potential liabilities exceed your net worth, we can void the contract and go with another regiona in better financial shape"? Similiar to a loan convenant with a bank - does this exist in the regional world, and if so, I wonder if Mesa's balance sheet is getting close to triggers?
When mainline carriers contract with a regional to provide feed, are there specific reasons that the mainline carrier can void the contract? My thinking is that like certain financial instruments, if xyz goes below abc then you cash us out. Do the mainline carriers state "if your balance sheet looks a certain way, and your potential liabilities exceed your net worth, we can void the contract and go with another regiona in better financial shape"? Similiar to a loan convenant with a bank - does this exist in the regional world, and if so, I wonder if Mesa's balance sheet is getting close to triggers?
I know there are specific operational performance requirements, and there might be financial items also.
The bigger issue with finances is the FAA...121 airlines must maintain adequate financial reserves or the Fed will pull their ticket. The reasons are obvious...a broke airline is not likley to do Mx correctly, and may take other operational shortcuts.
I suspect that mesa has aleady qualified for contrat termination on operational performance issues with UAL (and maybe Airways) based on the fact that other regionals had to cover their UAL flying last year. But it would be hard to fire any large regional right now...no one else can take on a sudden large amount of flying due to pilot shortages.
01-28-2008 | 11:04 AM
#13
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Joined: Dec 2005
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From: 7ER B...whatever that means.
Regional Question:
When mainline carriers contract with a regional to provide feed, are there specific reasons that the mainline carrier can void the contract? My thinking is that like certain financial instruments, if xyz goes below abc then you cash us out. Do the mainline carriers state "if your balance sheet looks a certain way, and your potential liabilities exceed your net worth, we can void the contract and go with another regiona in better financial shape"? Similiar to a loan convenant with a bank - does this exist in the regional world, and if so, I wonder if Mesa's balance sheet is getting close to triggers?
When mainline carriers contract with a regional to provide feed, are there specific reasons that the mainline carrier can void the contract? My thinking is that like certain financial instruments, if xyz goes below abc then you cash us out. Do the mainline carriers state "if your balance sheet looks a certain way, and your potential liabilities exceed your net worth, we can void the contract and go with another regiona in better financial shape"? Similiar to a loan convenant with a bank - does this exist in the regional world, and if so, I wonder if Mesa's balance sheet is getting close to triggers?
01-28-2008 | 11:06 AM
#14
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Joined: Dec 2005
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From: 7ER B...whatever that means.
I know there are specific operational performance requirements, and there might be financial items also.
The bigger issue with finances is the FAA...121 airlines must maintain adequate financial reserves or the Fed will pull their ticket. The reasons are obvious...a broke airline is not likley to do Mx correctly, and may take other operational shortcuts.
I suspect that mesa has aleady qualified for contrat termination on operational performance issues with UAL (and maybe Airways) based on the fact that other regionals had to cover their UAL flying last year. But it would be hard to fire any large regional right now...no one else can take on a sudden large amount of flying due to pilot shortages.
The bigger issue with finances is the FAA...121 airlines must maintain adequate financial reserves or the Fed will pull their ticket. The reasons are obvious...a broke airline is not likley to do Mx correctly, and may take other operational shortcuts.
I suspect that mesa has aleady qualified for contrat termination on operational performance issues with UAL (and maybe Airways) based on the fact that other regionals had to cover their UAL flying last year. But it would be hard to fire any large regional right now...no one else can take on a sudden large amount of flying due to pilot shortages.
01-28-2008 | 11:08 AM
#15
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Joined: Jan 2006
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From: Engines Turn or People Swim
01-28-2008 | 11:13 AM
#16
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Joined: May 2006
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From: B6 CA
01-28-2008 | 11:28 AM
#17
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From: SkyWest Capt.
Regional Question:
When mainline carriers contract with a regional to provide feed, are there specific reasons that the mainline carrier can void the contract? My thinking is that like certain financial instruments, if xyz goes below abc then you cash us out. Do the mainline carriers state "if your balance sheet looks a certain way, and your potential liabilities exceed your net worth, we can void the contract and go with another regiona in better financial shape"? Similiar to a loan convenant with a bank - does this exist in the regional world, and if so, I wonder if Mesa's balance sheet is getting close to triggers?
When mainline carriers contract with a regional to provide feed, are there specific reasons that the mainline carrier can void the contract? My thinking is that like certain financial instruments, if xyz goes below abc then you cash us out. Do the mainline carriers state "if your balance sheet looks a certain way, and your potential liabilities exceed your net worth, we can void the contract and go with another regiona in better financial shape"? Similiar to a loan convenant with a bank - does this exist in the regional world, and if so, I wonder if Mesa's balance sheet is getting close to triggers?
01-28-2008 | 11:56 AM
#20
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Joined: Dec 2005
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From: 7ER B...whatever that means.
Assuming 50-seat flying doesn't disappear completely in the next 2 years and CAL decides to release those airplanes, I wouldn't be surprised if those airplanes find their way into an agreement with UAL, USAir or Delta.
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