Announcement
 

TO: All Trans States Airlines Employees
CC: Trans States Holdings
FROM: Rick Leach
DATE: February 24, 2020
RE: Trans States Update
In recent years, the regional aviation landscape has changed dramatically and continues to do so. Our industry has never been more competitive and the margins for success at the regional level are razor thin. Major airlines are also searching for cost efficiencies within their regional portfolios and have taken numerous stepsto streamline productivity. In the past year alone, we’ve seen major airlines move aircraft between regional partners to simplify and create critical mass among their fleet types, shift aircraft from one partner to another to reduce geographic overlap among regional carriers and take steps to concentrate flying.

While we believe the Embraer 145 will be the most sustainable traditional 50-seater in the marketplace, in the medium to long term, the traditional 50-seat segment (CRJ200 and EMB145) has had some of the more significant market pressures among regional aircraft. With the tight pilot resource environment, coupled with increased unit cost due to reduced productivity and general cost increases on most line items, the last 18 months have proven to be tough for Trans States Airlines. Last year was an exceptionally challenging financial year, and early indications point to 2020 continuing down the same path. At a time when we need to fly each of our airframes to their fullest potential, we are facing a Captain shortage that will result in an inability to meet our increased productivity objectives and even our current contractual flying obligations. The imbalance between Captains and First Officers is so extreme that earlier this month, the company took the unprecedented action of canceling a First Officer class already in session, while delaying others. Reducing our flying or operating a smaller fleet only makes the economic equation more challenging.

We have explored numerous other options, looking for a solution that would allow us to reduce costs while maintaining efficiency, but none are achievable in a realistic timeframe. In short, our expenses continue to rise, resulting in a balance sheet that is neither profitable nor sustainable.
During our discussions with United regarding possible contingencies and actions to be considered to address these challenges, United relayed a desire to simplify the Embraer 145 program by consolidating flying. Given the reality of our challenges outlined above, coupled with United’s desire to simplify and create critical mass, we have come to the extremely difficult decision that an organized and well-planned wind-down of the Trans States operation is the most viable course of action.
Trans States Airlines still has an extremely important role to play in the United network throughout the remainder of 2020, but you will see a measured reduction of aircraft come off-line before the start of summer flying. United is counting on us to operate a significant number of aircraft throughout the summer, after which aircraft transitions will resume at a yet to be determined rate through end of the year, with all flying to be concluded by the end of 2020.

Trans States employees have very competitive and valuable skill sets and could go virtually anywhere in the industry, but it is our ardent hope you will choose to apply for openings at one of our other Holdings carriers or the Holdings company. United will also work with us to create opportunities for our employees with select UAX carriers.

Sarah Murphy, Senior Vice President at United Express, asked me to relay the following to the Trans States employee group: “Connecting the world begins with bringing customers into our hubs using a vast network of regional flying, of which Trans States has been an integral part for decades, and will continue to be throughout 2020. We are tremendously grateful for your commitment to our customers, and each other, during this transition period. We’re working hand-in-hand with Rick and the TSA team to ensure we provide as many opportunities as possible for you to remain part of the United Express family.”

More specific details on those opportunities will be provided by your department Directors very soon, but please know that I am committed to each of you and will work to create as many options as possible for your consideration.

I have been with Trans States Airlines for over 32 years, and while I know challenges and change are a constant in our industry, this has been a difficult realization and emotional decision for me. If I felt that there was any other viable option for a sustainable path forward, I would have done everything in my power to secure a different outcome, as we have many times before in our long history. As challenging as this situation will be for us all, I know that our unwavering commitment to safety and quality will remain steadfast throughout the duration of this transition.

This is a message I wish I did not need to communicate to you, but we are a family, and families get through difficult times together. For nearly 40 years, we have been an industry leader and operated this airline with professionalism and integrity, with safety and quality as our cornerstones, and I know that we will continue to do so in the months to come. Thank you for your support during this challenging time.

Sorry to hear about this everyone. What a mess..

Well that sucks

Sorry to hear guys

Sorry everyone that’s there.

Sorry to hear. Have always had great interactions with Waterski crews


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Wow guys, truly sorry to hear this...

Sorry guys. Good times ahead for you all with the way this industry is changing for the good. Keep your heads up.