Don't be surprised if Delta ties up the airplanes long enough to keep Republic from transferring them to United. They could easily tie them up long enough so RAH can't fulfill their CPA. Delta will not easily allow RAH to move them to a competitor of Delta. Remember who has a lawsuit against who. When Delta wanted Pinnacle to be cheaper and forced them into bankruptcy, they said the only way they would financially back Pinnacle during bankruptcy was if they parked all of the planes that Colgan flew for United. Why would Delta simply bow out, cancel the CPA, and let the lift they give up go over to benefit a competitor?

 

Those 55 aircraft orders for United weren't going to just show up overnight. The rumor mill is churning out that the Delta flying could be finished by May. No one has ever commended BB for being an employee friendly CEO, but he has made some smart business decisions before (minus trying to venture out of the fee for departure game).

 

I'm not trying to add fuel to the fire, but I have a curiosity: How do you know those aircraft are "paid off?" Practically speaking, unless you are privy to the inner financial machinations of RAH, the only way to know that an air frame is free of liens would be to conduct a title search. It is not uncommon for companies to offer otherwise "paid off" assets as security on instruments like revolving credit lines.

 

Three basic patterns of ownership for airframes.

1. Your airline owns it, free and clear, paid off. Cost of flying it is therefore less. It could be then available for use as collateral for any loan your airline needs: Operating cash, other capital improvements which are not their own collateral, etc. If you do this, that lender could be a major airline, bank, venture capital firm, Uncle Guido, etc.

2. You lease it from its owner, who could be a major, could be an airframe leasing company, Leasing subsidiary of Boeing, Airbus, or other mfgr, bank (commercial, private, Ex-Im), etc. Just like a car lease, various agreement language about residual value, cost to own at end of lease, etc. Your cost of operating it includes your payments on the lease.

3. Your airline buys it, owns it, but has a loan to make payments on. Cost of debt service on the loan is part of the cost of operating it. Likewise, loan could come from anybody with a large enough checkbook.

Those contracts are long legal documents, with lots of whereases and wherefores and complications. Lawyers bill by the hour writing this tonnage.

 

Every once in a while 404 gets carried away and even makes outlandish predictions. I think he posted a prophecy about PSA once too that amounted to bollocks

 

So you think Delta is going to let RAH just walk away from the contract and let the airplanes be used for a competitor just that easy?

 

Of course they won't. Delta unilaterally extended the 145 contract cause they caught wind of those planes going to support the United operation under a CHQ spinoff that was going to be spearheaded by WH. Daddy D is not stupid.

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That's my point

 

404, never got the call back from RAH for an interview huh?

 

We had this exact situation when Frontier booted us to the curb for the first time. We had 17 E170s parked (if memory serves me right) that were costing something like $300k per month to sit around and do nothing.

Ultimately, those planes found homes elsewhere and I would expect the same (or even disposal) for the Delta fleet if we lost that codeshare.