Regional Airlines Get Wings Clipped by Big Pa
#21
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.
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.
#22
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.
#23
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Joined APC: Aug 2009
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Posts: 65
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.
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.
11% is lower than the 175mill@ 12.75% notes(that were issued at a discount so they yield 17%) United issued earlier this year..........
#24
Gets Weekends Off
Joined APC: Apr 2006
Position: 737 CA
Posts: 2,750
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.
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.
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?
#25
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.
#26
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Joined APC: Jan 2006
Posts: 199
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.........
#27
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Joined APC: Dec 2007
Position: EMB 145 CPT
Posts: 2,934
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?
#28
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.
#30
Gets Weekends Off
Joined APC: Jan 2006
Posts: 199
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.
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.
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