Typical response from you. I've noticed that when someone proves you wrong (which is quite often on this forum), you turn and deflect. Why don't you address the points covered in the thread instead?

A few points of clarification:

Skywest bought us, not ASA. Our airline was not in bankruptcy when it was purchased nor anywhere near.

As of the last stockholders meeting, it looks like XJT will be the surviving entity and BTA the surviving certificate, I'm sure given your vast experience you can put two and two together.

 

Being new to XJT, could you please explain what you mean by the quoted statement? <disclaimer "This is not sarcasm. It is an honest question" /disclaimer>

 

When there is a merger, one of the two operating certificates will be retained (please see the NWA/Delta merger) regardless of who the management entity might be. Its driven by economics, and what favors a transition better. In this case based on multiple factors it looks like XJT will be the surviving entity, hence ops specs, procedures, call sign, and so on.

 

Tony doesn't realize that both of our airlines mutually needed to merge. He thinks everything at ASA is hunky-dory without a merger, except that we are presently operating all of our Delta flights at a loss, as was XJT operating CO flights at the time of the merger announcement. Without this merger, we would be in the very same boat that XJT was in.

Part of our 20 year CPA with Delta was that we needed to be the second least expensive Delta Connection operator by the 5th year of the agreement. If the airline was not the second least expensive, we would be paid at whatever rate the second least expensive airline is getting paid regardless of whether or not we operated the contract at a loss. That 5th year anniversary has come and gone, and we weren't the second least expensive, ergo, we are operating the Delta contract at a loss.

In order to bring our costs more in line to return to profitability, this merger was devised. Referencing the CASM between XJT and ASA, XJT has approximately 15% lower costs than ASA (the CASM's were approximately 9.2 cents per mile for ASA and 7.8 cents per mile for XJT). You merge a more expensive company with a less expensive company and voila...ASA's costs fall to a rate that will make the Delta flying profitable again.

Throw in a new 10 year CPA with Continental that returns the XJT operation to profitability, and you have an airline with a pretty good balance sheet.

 

Very good info Ramen....nice to read a post with actual statistics and metrics to rely on in comparison.

 

Thanks for the kudos. It just makes me crazy that some of our employees think that XJT was on the verge of bankruptcy and we swooped in to save the day, when in reality we are saving each other. The only difference is that SkyWest had the cash on hand to execute the purchase and made the first move. Would both companies have survived without this merger? Probably. Both were managed very well, but these are the cards management and the shareholders dealt us to move forward. Whether ATC calls us Acey or Jetlink is irrelevant, I'll proudly use whichever callsign we are told. The important thing to remember is that, going forward, we have a financially stable, well managed company that will keep us employed. Without that, nothing else matters.

Here's to a smooth merger and an industry leading contact.

Happy Hanukwanzmas

 

I decided to actually do some research and quote each airline's CASM from their respective 10-Q reports:

For the three months ending 30-Sept-2010, SkyWest INC CASM: 8.9 c/mile
For the three months ending 30-Sept-2010, XJT CASM: 7.02 cents/mile

Notes:

- Both operational expense rates exclude fuel.

- SkyWest INC does not publish separate CASM reports for both operations in the 10-Q; however, it is safe to assume that ASA is more expensive than the averaged SkyWest INC cost. The last publish CASM specific to ASA that I remember was 9.2 cents/mile, and given the published data, its likely a bit higher than that.

- Using 9.2 cents/mile, XJT is 23.7% cheaper than ASA

 

Excellent post, not much I can add here other than a lot of people don't realize that the CAL management also had a hand at orchestrating the merger, and are clearly working hand in hand with Jerry and Co.

 

Has anyone recently taken the ASA 30 question written? Any info to what's on it or specific areas to study for?

 

I read the gouges off of WillFlyForFood, and they were pretty spot on. I would start there. It's nothing crazy, you'll do fine.