jsled, not necessarily doubting you, but the link you provided makes no mention of $3B in cash. Can you point me to a SEC filing or a press release that specifically states that? Your quote looks like some sort of internal memo... hardly a credible source.

And what do you think about the 11% interest rate. That's loan sharking compared to a typical loan rate. Add up the interest of $80 million at 11% compounded interest, then tell me with a straight face that SkyWest got hosed!!!?

As for XJT, I hear they are doing the flying at a loss. They want to stop the bleeding from all the parked planes. Flying them at a loss costs the company less than just keeping them parked.

I'd say it's the other way around. I've heard inside information that UAL actually secured a credit line of up to $300 million from SkyWest, the $80M was just the up front loan.

11% is lower than the 175mill@ 12.75% notes(that were issued at a discount so they yield 17%) United issued earlier this year..........

John,

You have to scroll down to "investor updates". It is dated Dec 17...here ya go..

http://phx.corporate-ir.net/External...R5cGU9MQ==&t=1

Still dispute the 3 billion? and that is unrestricted.


As for the interest, look at the DAL credit line issued in Sep...9.2% I believe and UAL's latest was 13%!! Major airlines are not a good risk. I suspect Skywest had to make the loan to close the deal, and who is to say this deal won't be operated at a loss? What else would ASA do with those jets?

Ah unsubstantiated rumors, so yummy! First off how on earth does anyone know that isn't part of XJT's top management? Secondly, XJT has been scraping by for years now so I doubt they could honestly take a deal at a loss just for the sake of flying airplanes. Unlike SkyWest or Republic they don't have a billion dollars sitting in a bank for a rainy day. The flying will be done for a profit, even if it's a razor thin margin.

I don't know where you get your information from but I was told (to my face) by our VP of Flight Ops that the United deal is profitable at a certain block hour level. We have already surpassed that level with our projected block hour numbers for the summer and United continues to add to those projected block hours every week, hence why we are having to recall and determine where the new base will be. Our profit margin is lower than our historic margin but that is what the regional airline business is morphing into, less profits and higher quality requirements. The key is XJT is paying 1/2 price for the already discounted lease rates for our aircraft, that coupled with the size of our fleet allows us to operate at a lower price. I know you guys like to assume that we are doing this at a loss but XJT has the lowest cost per hour of any 50 seat operator right now for various reasons. Our UAX operation will not only be cheaper than the others but we will also have wifi, power outlets, and XM radio on our aircraft which will give us a better product. The only reason we are able to underbid everyone is our lease payments that are currently 50-60% lower than any other 50 operator which was part of our new CAL CPA, that coupled with the size of our fleet makes each 145 very very cheap. Glad to see XJT and ASA get new flying and hopefully it is a trend that will continue.........

Can you cite a source to this? I know that with the new CPA with CAL at the rates XJT was forced to accept due to attempted SKW buyout, it is at a loss at current aircraft utilization, it is at a loss.

As for doing flying at a loss because of parked airplanes, isn't that the same reason why SKW got a deal with UAL to fly 13 out of 20 parked airplanes?

The way that deal was explained to me is that the new CAL CPA was a completely different payment model than what XJT was used to. Before it was a cost+10% payment plan which is now a flat hourly rate. The reason it was unprofitable is that the flat hourly rate doesn't make money if CAL gives us low block hours. With the recession CAL cut us back about as far as they could possibly go without getting rid of airframes. So in the end XJT paid the leases but didn't get much money from CAL as they flew the airplanes relatively little.

Now that UA is thrown into the mix the block hours of the entire fleet will bring them into profitability. Hypothetically, if things go the other way and the planes are pushed to their limits then XJT's profits would be at it's peak.

Really???:confused:

Yes. It is good when higher paid pilots replace lower paid pilots.

I know where you are going with this and yes I agree it would be even better if lower paid regional pilots are replaced with higher paid mainline pilots. But that is out of our control.......this is a good thing that higher paid pilots are getting more flying even if it is just a baby step. I look forward to the day mainline pilots wake up and stop outsourcing to regionals but that day has not happened yet.