regional consolidation
07-17-2008 | 12:05 PM
#11
Gets Weekends Off
Joined: Sep 2006
Posts: 787
Likes: 0
History has shown it's easier to axe a wholly owned. No court, no questions asked. At least with Skywest, ASA, and Pinnacle, they would have huge court battles to fight, because it would be "company vs. company."
It's a touchy subject and I wish no one a job loss, but it would seem that the most cost efficient and painless option for Delta as a company (but not for pilots) would be:
Dissolve Comair & dump Mesa
Give XJs 900s away to Skywest, ASA, and Pinnacle
Use Compass as a flowback relief valve for NWA would-be furloughs
Use Mesaba for EAS lift in the Saabs
It's a touchy subject and I wish no one a job loss, but it would seem that the most cost efficient and painless option for Delta as a company (but not for pilots) would be:
Dissolve Comair & dump Mesa
Give XJs 900s away to Skywest, ASA, and Pinnacle
Use Compass as a flowback relief valve for NWA would-be furloughs
Use Mesaba for EAS lift in the Saabs
07-18-2008 | 05:39 AM
#12
Gets Weekends Off
Joined: Feb 2008
Posts: 493
Likes: 0
History has also shown that oil prices were far lower. Todays prices are forcing a game plan change. Why artificially prop up a contract carrier with a cost plus agreement, paying for their fuel and insulating them from this volatile market... therefore ensuring profitability at said carrier? Why do that when they can grow the wholly owned, spread the costs out further and collect the profits if there happened to be some.
The ways of the past are gone. A year ago I would have believed Mesaba and Compass (and Comair, Eagle etc...) would have been quickly spun off to raise cash once the growth stopped. Just like Pinnacle and ASA were. Today, it's a different story and I think the mainlines will shift their focus towards wholly owned regional partners and limit their exposure to cost plus agreements where possible.
On the issue of consolidation however... at least with the new Delta I can see Comair and Mesaba merging, or at least Comair falling under the MCHoldings umbrella. If there are indeed furloughs at NWA and a near flush of the list over at Compass I could see NWA selling those 175s in an asset sale, like Mid Atlantic. This creates cash (or at least breaking even) as well as mitigating all the costs of retraining the "new" Compass seniority list. IF they don't furlough, Compass would plug away as status quo apart of McHoldings.
The ways of the past are gone. A year ago I would have believed Mesaba and Compass (and Comair, Eagle etc...) would have been quickly spun off to raise cash once the growth stopped. Just like Pinnacle and ASA were. Today, it's a different story and I think the mainlines will shift their focus towards wholly owned regional partners and limit their exposure to cost plus agreements where possible.
On the issue of consolidation however... at least with the new Delta I can see Comair and Mesaba merging, or at least Comair falling under the MCHoldings umbrella. If there are indeed furloughs at NWA and a near flush of the list over at Compass I could see NWA selling those 175s in an asset sale, like Mid Atlantic. This creates cash (or at least breaking even) as well as mitigating all the costs of retraining the "new" Compass seniority list. IF they don't furlough, Compass would plug away as status quo apart of McHoldings.
Last edited by bored; 07-18-2008 at 05:45 AM.
07-18-2008 | 07:34 AM
#13
Gets Weekends Off
Joined: Sep 2007
Posts: 1,206
Likes: 0
From: G550 Captain
History has also shown that oil prices were far lower. Todays prices are forcing a game plan change. Why artificially prop up a contract carrier with a cost plus agreement, paying for their fuel and insulating them from this volatile market... therefore ensuring profitability at said carrier? Why do that when they can grow the wholly owned, spread the costs out further and collect the profits if there happened to be some.
The ways of the past are gone. A year ago I would have believed Mesaba and Compass (and Comair, Eagle etc...) would have been quickly spun off to raise cash once the growth stopped. Just like Pinnacle and ASA were. Today, it's a different story and I think the mainlines will shift their focus towards wholly owned regional partners and limit their exposure to cost plus agreements where possible.
On the issue of consolidation however... at least with the new Delta I can see Comair and Mesaba merging, or at least Comair falling under the MCHoldings umbrella. If there are indeed furloughs at NWA and a near flush of the list over at Compass I could see NWA selling those 175s in an asset sale, like Mid Atlantic. This creates cash (or at least breaking even) as well as mitigating all the costs of retraining the "new" Compass seniority list. IF they don't furlough, Compass would plug away as status quo apart of McHoldings.
The ways of the past are gone. A year ago I would have believed Mesaba and Compass (and Comair, Eagle etc...) would have been quickly spun off to raise cash once the growth stopped. Just like Pinnacle and ASA were. Today, it's a different story and I think the mainlines will shift their focus towards wholly owned regional partners and limit their exposure to cost plus agreements where possible.
On the issue of consolidation however... at least with the new Delta I can see Comair and Mesaba merging, or at least Comair falling under the MCHoldings umbrella. If there are indeed furloughs at NWA and a near flush of the list over at Compass I could see NWA selling those 175s in an asset sale, like Mid Atlantic. This creates cash (or at least breaking even) as well as mitigating all the costs of retraining the "new" Compass seniority list. IF they don't furlough, Compass would plug away as status quo apart of McHoldings.
07-18-2008 | 07:44 AM
#14
Gets Weekends Off
Joined: Sep 2007
Posts: 1,206
Likes: 0
From: G550 Captain
History has shown it's easier to axe a wholly owned. No court, no questions asked. At least with Skywest, ASA, and Pinnacle, they would have huge court battles to fight, because it would be "company vs. company."
It's a touchy subject and I wish no one a job loss, but it would seem that the most cost efficient and painless option for Delta as a company (but not for pilots) would be:
Dissolve Comair & dump Mesa
Give XJs 900s away to Skywest, ASA, and Pinnacle
Use Compass as a flowback relief valve for NWA would-be furloughs
Use Mesaba for EAS lift in the Saabs
It's a touchy subject and I wish no one a job loss, but it would seem that the most cost efficient and painless option for Delta as a company (but not for pilots) would be:
Dissolve Comair & dump Mesa
Give XJs 900s away to Skywest, ASA, and Pinnacle
Use Compass as a flowback relief valve for NWA would-be furloughs
Use Mesaba for EAS lift in the Saabs
From a purely business standpoint, DAL would not shift all CRJ900 flying to Skywest, when Skywest is already too big as it is as a regional. Your statement lacks any semblance of logic or credibility. Why would DAL destroy Mesaba if they are interested in selling it in the first place? Who would buy a regional which has no CRJ900 flying but left only with Saabs.
At any case, from a business point I agree with the assessment that wholly owned regionals like Compass and Mesaba and Comair will grow in the near future. Only exception I see is Pinnacle. I see DAL giving DAL regional flying to Pinnacle and gradually shifting away from contract feeder regionals.
Thread
Thread Starter
Forum
Replies
Last Post
