404yxl

I'm just curious if those that think like this person, really understand how those payments on those planes work and what is needed to make sure your payments on "owned" planes don't default.

Customers pay money to their mainline provider and the mainline provider provides payments to their contracted partner to cover their costs associated with their contracted lift. Sometimes those costs involve the airplane costs. Sometimes the mainline partner bears the cost. If contracted partner fails to live up to their contractual obligations, the mainline partner may cancel their contract (CPA) with their contractor.

Now riddle me this. If Republic's mainline partners withhold payments to Republic for failing to meet the terms of their CPA, how exactly will RAH make the payments on those planes.

To put it another way. You may own that car or home of yours, but if you owe on a loan, do you think you aren't at risk of it being repossessed or foreclosed on? Or do you just keep to keep your car or house forever if you decide to never make the payments?

TurbineTime

This is getting a little tiresome, but I'll say it again. The aircraft referenced in the post you quoted are some of the oldest in the republic fleet, they are paid off and have been for some time. If the CPA w/ delta is cancelled, they will be reallocated throughout the rest of the fleet to cover other flying. Again, there are no payments on those aircraft and they can be used elsewhere. They will not be going anywhere but the paintshop to get their new United colors.


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Gjn290

What about the nine airplanes republic is getting for Delta next year?

404yxl

I don't think you get it. If Delta cancels the CPA, Republic is out all of that money. United will not pay Republic more so they can cover the payments on the cancelled Delta planes unless Republic can staff more flying for United with those planes.

TurbineTime

I get it. Republic spent the last 2 quarters paying down debt early. There are no payments to make on the aircraft in question. They are booked through February with new hire classes and attrition has dramatically slowed, staffing will improve. And the number of delta painted birds almost perfectly equals the number of cancelled ejet orders, the delta aircraft will be moved over to replace those cancelled orders. It all makes sense and Bedford gets rid of the 145's to help with staffing.


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404yxl

No you don't get it. If Republic can't fulfill its contractual obligation with Delta, Delta can stop paying them. Republic does not own their airplanes without loans due on them. In fact Republic has over $2 Billion in loans due on their airplanes.

I guess you don't understand what happened to Mesa in 2009 and how that could happen at Republic.

TurbineTime

You're letting your desire to get your hands on republic planes out way the facts. Obviously rah has loans on aircraft, they make payments on them all the time. But not on the delta planes you continue to talk about. They are already paid for and have been for some time. If American and United stopped paying, I agree it could get dicey. But they haven't and BB is using this to shed the 145's like he's wanted to all along.


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404yxl

Why do you think I want those planes? You are coming off as someone who can't accept reality.

TillerEnvy

You are clueless 404.

404yxl

It's ok Tiller, we get it, you are in denial how the Mainline/Contractor relationship works.

Mainline airlines are the ones selling the tickets and if they cut their contractors funding due to not meeting the terms of the CPA, the contractors don't have a way to pay for their "owned" airplanes.