Skywest sues Delta Air Lines
 

Biting the hand that feeds us??????:confused:

"This afternoon SkyWest, Inc. filed a lawsuit against Delta Air Lines on behalf of both SkyWest Airlines and ASA. The dispute is regarding irregular operations costs, which Delta claims have been overlooked in the monthly billings since September 2005 and feels have been inappropriately reimbursed to SkyWest Airlines and ASA."

Huh...well if DAL is trying to screw us, Jerry is absolutely right in standing up for Inc...and from what little I've learned about the aviation, this is purely business - I don't think anybody is taking it personally. Any other thoughts...?

I'm not taking sides.....just stating the obvious. How will this affect future contract negotiations with DAL?

well if its reached the point of a lawsuit, this means that every step prior to that in settling this thing failed. cant be good news for anyone.

From my previous experience with large-scale business ventures, this sort of lawsuit, over a single item, is not too uncommon. It is probably just a means to resolve a disagreement over one point. I have seen business as usual, and ongoing negotiations over new contracts occurring in conjunction with similar lawsuits. It all depends on the dollar amount and the personalities involved.

The Short Answer to this is NO ONE KNOWS, People on here are going to speculate and theorize ect ect but truth of the matter is none of us knows, It amazes me how US pilots can be such rumor mongers, barracks lawyers ect ect if we knew so much why arent we in Law or Business for ourself running our own airlines..

Blkflyer.....you still at comair?

I bet the settlement involves Skywest getting all of Comair's flying.

I just love how every Skywest guy refers to their CEO by his first name...:)

No.. the powers that be have decided that I am not worthy to work for such a well oiled machine of an airline, On another note tho I do miss sleeping in Ops at JFK with RJ the Mouse and company, I also miss sitting at BOS for 3-4 hours for a Production Break.

On a serious note tho I miss the people I worked with at Comair Most were Great Folks

Jerry's not the only one; Mgmnt uses first names in order to achieve a personal sense through out the company. It’s also part of their “open doors” philosophy.

Jerry, Brad, Rich, Roy, Dave, etc. After while you just get used to it and it starts to fit.

I know, it’s ridiculous when you first hear it but if you really think about it, it’s a simple and it works well here. Just adds to the Kool-Aid drinking.

This was an incredibly stupid move that will have repercussions in a negative fashion for SkyWest.

If SkyWest wants to play chicken with Delta, by all means. However Delta will win in the long term.

Just look at Continental and ExpressJet. You dont play chicken with someone 10X your size and that is accoutable for 2/3rds of your total earnings.

Nice power play Jerry!

Dont worry about it.. Delta loves Skywest......

That is contrary to what a group of Delta gate agents told me tonight.

delta gate agents? hahahaha come on man

LOL thats like me getting my Stock Tips from my 9 year old Neice.

I wrote that to mimic the absurdity of your post.

Since we do not get to see the big picture, we can only take the face value of the story. This is like cutting off your nose to spite your face. Or it could be just doing business.

You must be a Kool-Aid drinking SKYW F/O. ;)

haha We all thought CAL loved Expressjet, well they did until Kellner and Smisek started running the show............

I wouldn't worry about skywest, we've done it before and we'll do it again. I would worry about how much expressjet is going to lose next year and what or who is going buy you when you become bankrupt.

And if I were you I would worry about what could happen to SkyWest, or any regional for that matter when mergers begin because the regionals will be hurt badly.

I wouldn’t worry about SKW; the reduction in our flying will be spread out over a few years which will make its impact minimal on our labor groups. When the merger does happen I’m sure it will affect MEM (Pinnacle & Mesaba) and CVG (Comair) the most. ATL, SLC, LAX & NYC are very important for DAL while MSP & DTW are the same for NWA; as recent global growth has shown us. That leaves MEM and CVG out in the cold and IMO destined for closure. SKW & ASA are mainly SLC & ATL based, bring our contacts into the equation which gives SKW Inc guaranteed %age connection departures from each city and the only way SKW will be affected is with a total decrease in regional flying. Which, in the long run, is good for us all seeing that it means more mainline jobs.

As for the lawsuit, it’s just business and I’m sure both parties will come to an agreement. DAL bent/broke the rules and SKW’s just looking for what rightfully theirs. At its most basic level it’s no different than filing a grievance with your union over something your airline did or didn’t do. In the end SKW won’t burn a bridge and they won’t pull an ACA.

Nothing is guaranteed in this industry. Once you start believing that, you set yourself up for suprises. EVERYONE in this industry is vunerable.

It is correct, I will not argue that, but it's guaranteed as long as DAL honors the contract and if they don't then SKW retains (in other words they have yet to pay DAL per the contract) $125M which is the last installment of the ASA purchase agreement. When the terms of the contract expire then the installment is due, until then the ball is in DAL's court. If DAL does renig then SKW just purchased ASA for $300M instead of $425M and over the coarse of the last 3 years SKW Inc as made around $150M/year, or $450M over 3 years, in profits from ASA which puts them in the black on the purchase ($450M - $300M = +$150m).

PS. #'s are not exact but ballpark.

Unacceptable, only come back when you have the exact #'s!:D

Haaaa, plus or minus a few Mil on the profits only.

What do they say: "Horseshoes, hand grenades & aviation." :D

Jetjock,
Since you know a little about the Delta/Skywest contract, how long is that %% of Delta Connection flying guarenteed to Skywest. When does Skywest have to make that $125 million dollar payment?

http://www.skywest.com/media/05/8-15-05.php

Quote:
"purchase price of $425 million. .................................................. .................. SkyWest shall be entitled to retain $125 million if Delta does not affirm the ASA or SkyWest Delta Connection Agreements in a Chapter 11 proceeding prior to the fourth anniversary of the closing of this transaction. The purchase price is also subject to adjustment based on ASA’s levels of cash and working capital as of the closing date. The transaction, which is subject to regulatory reviews and other conditions, is currently expected to close during September 2005."

The $125M is due 4 years after the agreement which means in late 2009.

Quote:
"Jerry Atkin, SkyWest’s Chairman and Chief Executive Officer, sees the ASA acquisition as an opportunity to strengthen SkyWest’s partnership with Delta. “Through this acquisition, our company will enter into long-term agreements with initial terms of 15 years with Delta at both ASA and SkyWest Airlines, making SkyWest the most significant regional relationship in the Delta Connection program. Moreover, we believe that ASA is well-positioned to pursue additional code sharing relationships.”"

2005 purchase agreement & flying is for 15 years or until 2020.

Disclaimer.. I Dont drink Kool-Aid.... something about Jim Jones syndrome

When I said dont worry about it Delta Loves skywest I was being Sarcastic

I dont know how many times I have to say this.. but a REgional is a Regional is a Regional and that includes Skywest...

W2's, days off/QOL, moral and Mgmnt/labor group relations tell otherwise; but if you mean we all live and die by codeshares then you are correct.

I don't think you are exactly qualified to call JA stupid. I suspect your track record in business falls short of his, by several orders of magnitude.

You might want to spend a little more energy worrying about xjets future, and less on skw. From a purely objective point of view, xjet is facing a lot more uncertainty.

Maybe you could apply to skw again? They will usually re-interview after 6 months. (unless you REALLY blew the first one :rolleyes: ).

My Point exactly... Unless Skywest starts selling tickets and are not dependent on contracts.. well you see my point, A regional is a Regional... Mainline dont care about anything but the Bottom line.. and if that means breaking a contract then they will do so.. I am not a business major or an lawyer but I do know that nothing surprizes me in this business

The second I heard this I knew people on this board would blow it out of proportion. This is simply business as has been said before. I am not going to go into details but basically Delta has bent/broken the contract. For a group of people who think honoring contracts is so important most of you sure seem to think Skywest should just let Delta do whatever they want. Kinda hypocritical don't you think? Biting the hand that feeds you? I guess that is the attitude you should take next time your management violates your contract. After all they are the hand that feeds you.