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Great Lakes - Raytheon Debt Update  
User currently offlineLAXintl From United States of America, joined May 2000, 25062 posts, RR: 46
Posted (2 years 11 months 2 weeks 5 days 14 hours ago) and read 16191 times:

Great Lakes filed a SEC form 8-K with information that it has entered into an amendment to the agreement with Raytheon to delay its $31.1mil balloon payment due Raytheon from August 31st to October 17th, 2011.
The Raytheon debt covers 25 Beech 1900D aircraft

It also noted Great Lakes defaulted on a planned June 30, 2011 payment on $6.9mil in cross-debt covering EMB-120 aircraft. Raytheon has served Great Lakes with termination notices on 6 EMB120 leases.

In order to satisfy the obligation to Raytheon now due October 17, 2011, the company has retained Raymond James & Associates to act as banking advisor in attracting new financing and optimizing repayment terms of its aircraft debt.


So the million dollar question -- who is going to step forward and help cough up the $31 odd mil for these guys?


From the desert to the sea, to all of Southern California
135 replies: All unread, showing first 25:
 
User currently offlineridgid727 From United States of America, joined Jul 2008, 1113 posts, RR: 0
Reply 1, posted (2 years 11 months 2 weeks 5 days 13 hours ago) and read 16117 times:

ZK just seems to keep getting extensions on this debt. I doubt investors will step up on this one.

When will Raytheon take the 120's?


User currently offlinepoint2point From United States of America, joined Mar 2010, 2752 posts, RR: 1
Reply 2, posted (2 years 11 months 2 weeks 5 days 13 hours ago) and read 16024 times:

ZK provides a needed service to many airports in the midwestern/western part of the U.S., and has found its niche here, in spite of anyone approving or disapproving of how they go about their operations.

So Plan A is just to keep extending the financing and that seems sort of it.

Will they - or even can they - somehow find a Plan B to all of this?


User currently offlinemikefrommke From United States of America, joined Jun 2011, 351 posts, RR: 12
Reply 3, posted (2 years 11 months 2 weeks 5 days 12 hours ago) and read 15996 times:

Quoting point2point (Reply 2):
So Plan A is just to keep extending the financing and that seems sort of it.

The thing that is probably helping them at this point is that Raytheon probably can't place those birds with any other carriers, so they will find a way to keep them flying at ZK. They are no use to Raytheon sitting in the desert.


User currently offlinebjorn14 From Norway, joined Feb 2010, 3412 posts, RR: 2
Reply 4, posted (2 years 11 months 2 weeks 5 days 12 hours ago) and read 15990 times:

Excellent article here:

www.easflights.com



"I want to know the voice of God the rest is just details" --A. Einstein
User currently offlineKarlB737 From United States of America, joined Mar 2004, 3100 posts, RR: 10
Reply 5, posted (2 years 11 months 2 weeks 5 days 9 hours ago) and read 15766 times:

Quoting LAXintl (Thread starter):
So the million dollar question -- who is going to step forward and help cough up the $31 odd mil for these guys?

Why would anyone intervene and who really thinks that Great Lakes will ever pay up. I'm surprised that Great Lakes hasn't come under an FAA investigation. In the earlier thread someone pointed out that the Beechcraft 1900's have been flown past their expected airlife. Couple this massive financial debt to that and one has to ask at what point does a safety issue begin to creep into this situation which I am sure the FAA would like to avoid.


User currently offlinecbphoto From United States of America, joined Dec 2003, 1551 posts, RR: 5
Reply 6, posted (2 years 11 months 2 weeks 5 days 9 hours ago) and read 15672 times:

Quoting KarlB737 (Reply 5):
I'm surprised that Great Lakes hasn't come under an FAA investigation. In the earlier thread someone pointed out that the Beechcraft 1900's have been flown past their expected airlife. Couple this massive financial debt to that and one has to ask at what point does a safety issue begin to creep into this situation which I am sure the FAA would like to avoid.

Seriously? As long as the 1900s are inspected regularly, they can fly as long as need be. Only when it become uneconomical to maintain them, will the airline then get rid of them. You think our 1900s are the only aircraft to have been flown past there expected life? While ZK might be in a lot of debt with Raytheon, they still have enough money to continue operations, safely! Every major airline works with the FAA to ensure safe operations, we are no different, so I am not sure what you are getting at with the FAA investigation?

Quoting mikefrommke (Reply 3):
The thing that is probably helping them at this point is that Raytheon probably can't place those birds with any other carriers, so they will find a way to keep them flying at ZK. They are no use to Raytheon sitting in the desert.

I wish that was true, but the 7 that we are gradually returning back to Raytheon are being placed. I believe a few are going to New Zealand and I am sure the others could find homes! Lots of the ones you see sitting in ABQ and SLN apparently have incomplete maintenance records, which is why they are still sitting and rotting away!



Quoting LAXintl (Thread starter):
So the million dollar question -- who is going to step forward and help cough up the $31 odd mil for these guys?

This is (and has been) the Million dollar question! The company told us, because of the EAS woes going through congress, and because EAS money equals roughly 50% of our income, there were lots of problems securing financiers, but now with the EAS somewhat safe for now, it might be different! But who knows?

Did it say when the leases on the 6 EMB-120s would be terminated? Sounds like stuff around here is going to get pretty serious and bad...fast!



ETOPS: Engines Turning or Passengers Swimming
User currently offlinecbphoto From United States of America, joined Dec 2003, 1551 posts, RR: 5
Reply 7, posted (2 years 11 months 2 weeks 5 days 9 hours ago) and read 15649 times:

Quoting LAXintl (Thread starter):
Raytheon has served Great Lakes with termination notices on 6 EMB120 leases

Quick question on the SEC filing! The way I read it, was that we have 6 aircraft that we are leasing, that will be returned to Raytheon! I know we have 6 1900s that we are returning, but I can't tell in all that fancy wording, if those are what they are talking about, or if they are talking about the Brasilias? I see 4 of the bros are on the senior note! Can someone clarify what they think and how they read it? Thanks!

http://www.sec.gov/Archives/edgar/da.../914397/000119312511239838/d8k.htm



ETOPS: Engines Turning or Passengers Swimming
User currently offlineatcsundevil From Germany, joined Mar 2010, 1183 posts, RR: 2
Reply 8, posted (2 years 11 months 2 weeks 5 days 2 hours ago) and read 15456 times:

Quoting mikefrommke (Reply 3):
The thing that is probably helping them at this point is that Raytheon probably can't place those birds with any other carriers, so they will find a way to keep them flying at ZK. They are no use to Raytheon sitting in the desert.

Surprisingly, finding a home for an old, beat up, high time B1900D is relatively easy. Lots of them are getting sent to Africa because they're easily fixed with minimal tools/supplies, good short field takeoff, and good high and hot performance. Raytheon would love for these to go to Africa because then they're not their problem anymore -- they are for as long as they're in the US.

Quoting cbphoto (Reply 6):
Seriously? As long as the 1900s are inspected regularly, they can fly as long as need be. Only when it become uneconomical to maintain them, will the airline then get rid of them. You think our 1900s are the only aircraft to have been flown past there expected life? While ZK might be in a lot of debt with Raytheon, they still have enough money to continue operations, safely! Every major airline works with the FAA to ensure safe operations, we are no different, so I am not sure what you are getting at with the FAA investigation?

You're exactly right! Delta/NW DC9s, anyone? How about UPS DC-8s(yes, I know they're retired, but they were old with lots and lots of time)? Provided they receive proper maintenance and remain airworthy, time on the airframe doesn't mean much aside from decreased operating economics, but that's the carrier's problem...the FAA could care less provided they are regularly and properly maintained and airworthy. "Expected life" is really from the standpoint of the manufacturers who generally build aircraft to last for 20 years/X number of hours/X number of cycles -- this helps advertise the airplane to assure the customer that it won't break in five years, just like a car companies will. Most manufacturers, like Boeing (and apparently Raytheon) advertise 20 years but design and build to last possibly 30 or even 40+. The FAA would have nothing to investigate unless there were improper maintenance procedures or the aircraft were in an unsafe condition. To cut an aircraft's life short because of an arbitrary number wouldn't make sense. The DMV doesn't make you junk your car when it hits 100,000 miles, because most cars are still running just fine at 100k if they're maintained well enough. That also applies to aircraft.

Quoting cbphoto (Reply 7):
or if they are talking about the Brasilias?

Hope not! You guys actually make money with those things! Lol. Not only would a bunch of FAs be out of a job, but with no forseeable replacement, ZK might be in serious danger of bankruptcy. Seeing as they'd start losing lots of aircraft, that would be it for them.

I hate to say this because ZK is a cool little airline, but I'm worried this is the beginning of the end. Its been a long time coming, and after losing the Montana contracts, this could be the death blow. I certainly hope not and I really hope things work out, not just for the airline, but for all of a its awesome employees and for the towns they serve who really need their service. PHX routes would probably be replaced by SeaPort (they tried going for PHX-SOW anyway) which means that TSA in PGA and SOW would lose their jobs, which could happen to potentially dozens of other airports. The residual of ZK going under would be huge for a lot of people, which is why I hope someone might provide the investment. The last thing that several hundred people need in this economy is to lose their job and for lots of these small towns to potentially lose commercial air service or TSA staffing.



1954 1974 1990 2014 -- Los geht's!
User currently offlinebjorn14 From Norway, joined Feb 2010, 3412 posts, RR: 2
Reply 9, posted (2 years 11 months 2 weeks 5 days 2 hours ago) and read 15449 times:

Why does ZK not have a fleet renewal plan?


"I want to know the voice of God the rest is just details" --A. Einstein
User currently offlinecbphoto From United States of America, joined Dec 2003, 1551 posts, RR: 5
Reply 10, posted (2 years 11 months 2 weeks 5 days 1 hour ago) and read 15389 times:

Quoting atcsundevil (Reply 8):
Hope not! You guys actually make money with those things! Lol. Not only would a bunch of FAs be out of a job, but with no forseeable replacement, ZK might be in serious danger of bankruptcy. Seeing as they'd start losing lots of aircraft, that would be it for them.

I hate to say this because ZK is a cool little airline, but I'm worried this is the beginning of the end. Its been a long time coming, and after losing the Montana contracts, this could be the death blow. I certainly hope not and I really hope things work out, not just for the airline, but for all of a its awesome employees and for the towns they serve who really need their service. PHX routes would probably be replaced by SeaPort (they tried going for PHX-SOW anyway) which means that TSA in PGA and SOW would lose their jobs, which could happen to potentially dozens of other airports. The residual of ZK going under would be huge for a lot of people, which is why I hope someone might provide the investment. The last thing that several hundred people need in this economy is to lose their job and for lots of these small towns to potentially lose commercial air service or TSA staffing.

Well Said!   

Quoting bjorn14 (Reply 9):
Why does ZK not have a fleet renewal plan?

Simple really! What can replace a Beech 1900? There is currently nothing on the market that will do the job the 1900 does. Which is still why they are in high demand!



ETOPS: Engines Turning or Passengers Swimming
User currently offlineatcsundevil From Germany, joined Mar 2010, 1183 posts, RR: 2
Reply 11, posted (2 years 11 months 2 weeks 5 days 1 hour ago) and read 15353 times:

Quoting bjorn14 (Reply 9):

The long answer: it's mostly because they can't really afford the fleet they've Anther so, there isn't currently an adequate replacement for the 1900D or EMB120. A 19 seat turboprop with good performance, relatively good reliability, and is relatively easy to maintain means that a new aircraft would have some big shoes to fill in a relatively niche market. If such an aircraft were built, they would maybe only sell 100 airframes at best. ZK wouldn't even be able to afford or probably even finance new aircraft should one fit that mold. They've gotten lucky with their current fleet and money issues aside, aircraft to replace their current fleet really just don't exist.

All they really could do is find a different aircraft which may suit their needs and adapt. SeaPort uses newer PC-12s, but 9 seats means less potential EAS revenue. It's also a single engine piston...they can, however, be flown by one pilot, so it's a bit of a trade-off in that respect. They could get a dozen or so seats seats in a King Air B200 or something, but those are expensive. As for the E120, the only potential options are a Saab 340 or Dash 8-200, but even those are getting old, so there's not really a newer direct or even close replacement.

Short answer: their business model sorta sucks and if they're able to survive and start planning for the future, their business model is going to have to change one way or the other, primarily to support a fleet that will likely look very different than it does today.



1954 1974 1990 2014 -- Los geht's!
User currently offlineridgid727 From United States of America, joined Jul 2008, 1113 posts, RR: 0
Reply 12, posted (2 years 11 months 2 weeks 5 days ago) and read 15315 times:

Quoting atcsundevil (Reply 11):
Short answer: their business model sorta sucks and if they're able to survive and start planning for the future, their business model is going to have to change one way or the other, primarily to support a fleet that will likely look very different than it does today.

It really does suck, and for years Voss has operated on the premise that there will always be someone there to bail him out when the heat is on. It was a really hard blow to him when Montana highline cities were not approved for his bid.
Voss has for years really mismanaged ZK and this model has been used in some IATA classes in airline management as an example.

So should ZK go down- There is always Gulfstream in the area now, who could very well cherry pick the best EAS routes, and cities involved in a shut down. (When Gulfstream was in bankrupcty they somehow came up with investors in the 20-30 million dollar range) Cape Air is always a possibility as well since they have bid on Northwest Cities for EAS services in the past, and have ordered a new aircraft type to introduce to their operations. Then you also have Island Air from Hawaii who several years ago was interested in setting up an operation in the midwest with EAS services they may be a possibility but Im sure they would be a Dash8 operator and that would produce way too much capacity in many of these markets if they were even interested anymore. Also there is Seaport with their PC12's, so there are possibilities for replacement in the areas served--albeit on a different business model than ZK

ON many of the EAS routes flown by ZK now, a 1900 is way overkill. Some of those cities handle 3 or 4 passengers a day now, and in some the 1900 doesn't meet the traffic they are producing.

Is there really any other airlines that could (even if they had an interest) take these EAS cities on should ZK be put under by creditors.


User currently offlineazjubilee From United States of America, joined Apr 2000, 3905 posts, RR: 28
Reply 13, posted (2 years 11 months 2 weeks 4 days 22 hours ago) and read 15184 times:

This might be a wild idea, but perhaps DL will come to the aid of Lakes as 31 million is pennies to big D. Big D is exiting a huge amount of small markets in the midwest and needs to find a replacement carrier for the EAS markets it is contracted via Mesaba to serve. If DL can help make Lakes stronger, it then in turn creates the ability for DL to exit sooner the markets it doesn't want to be apart of. Finally, DL can then come up with some sort of interline agreement for the passengers from the Lakes flights to the DL flights in the DL hubs. This makes DL look better in the eyes of the small communities and the customers it is abandoning, creates some stability for this new distant relationship between Lakes and DL and in the end DL gets what it wants.

User currently offlineSLCGuy From United States of America, joined Jul 2008, 163 posts, RR: 0
Reply 14, posted (2 years 11 months 2 weeks 4 days 18 hours ago) and read 14253 times:

Quoting atcsundevil (Reply 11):
All they really could do is find a different aircraft which may suit their needs and adapt. SeaPort uses newer PC-12s, but 9 seats means less potential EAS revenue. It's also a single engine piston...they can, however, be flown by one pilot, so it's a bit of a trade-off in that respect.

The PC-12 wouldn't be a good choice due to FAA regulations limiting single engine Part 135/121 passenger operations in IFR weather conditions. By the way, the PC-12 is a turboprop not piston powered.


User currently offlineGQfluffy From , joined Dec 1969, posts, RR:
Reply 15, posted (2 years 11 months 2 weeks 4 days 17 hours ago) and read 13994 times:

Quoting azjubilee (Reply 13):

DL was partnered with Big Sky in BOS and look how that ended-

Big Sky went under.

Big Sky paid more, operated with a better on-time percentage, and had less MX issues with their B1900D's than Great Lakes ever has, not to mention where Big Sky was based, it better served it's market that Great Lakes took over, and subsequently lost.


User currently offlineScottB From United States of America, joined Jul 2000, 6743 posts, RR: 32
Reply 16, posted (2 years 11 months 2 weeks 4 days 16 hours ago) and read 13884 times:

Quoting azjubilee (Reply 13):
This might be a wild idea, but perhaps DL will come to the aid of Lakes as 31 million is pennies to big D.

Except that the main ZK hub at DEN actually strengthens two of Delta's biggest competitors in the Rocky Mountain region. If Delta were all that concerned about the EAS markets, they wouldn't be orchestrating the pull-down of XJ's EAS flying.

Quoting mikefrommke (Reply 3):
Raytheon probably can't place those birds with any other carriers, so they will find a way to keep them flying at ZK. They are no use to Raytheon sitting in the desert.

They're not much use to Raytheon, either, if they've got a bunch of capital tied up there in the loans which could be used in better ways. I doubt Raytheon is all that interested in remaining a shareholder of GLUX.


User currently offlineazjubilee From United States of America, joined Apr 2000, 3905 posts, RR: 28
Reply 17, posted (2 years 11 months 2 weeks 4 days 16 hours ago) and read 13800 times:

ScottB - I hadn't thought of that angle. Good point. In retrospect my idea is an expensive way for DL to get out of what they're doing. Disregard... carry on... nothing to see here!

User currently offlineLAXintl From United States of America, joined May 2000, 25062 posts, RR: 46
Reply 18, posted (2 years 11 months 2 weeks 3 days 18 hours ago) and read 13147 times:

Quoting point2point (Reply 2):
and has found its niche here, in spite of anyone approving or disapproving of how they go about their operations.

Well I would question that niche, as its certainly not one that has been very successful financially.

If you look at ZK earnings, they essentially have broken even, or turned small profits these last 3 or so years, but are only doing it without having to pay much for their aircraft.

I'm not sure the business model runs if they had to actually pay the ownership cost, and not continually push the mountain of payments back.

Kinda like folks living for almost free in a house without mortgage payments for a few years. We know how well that worked for America.

Quoting mikefrommke (Reply 3):
The thing that is probably helping them at this point is that Raytheon probably can't place those birds with any other carriers, so they will find a way to keep them flying at ZK. They are no use to Raytheon sitting in the desert.

I'm not sure they will be in the desert. There seems to be a bit demand globally still for the B1900 including in Africa.

Additionally don't forget Uncle Sam has bought for parting several B1900s to keep its ever growing King-Air reconnaissance platform operational, so the more known US registered B1900 that become available could be a bonus for the DoD.



From the desert to the sea, to all of Southern California
User currently offlineatcsundevil From Germany, joined Mar 2010, 1183 posts, RR: 2
Reply 19, posted (2 years 11 months 2 weeks 3 days 2 hours ago) and read 12928 times:

Quoting SLCGuy (Reply 14):
By the way, the PC-12 is a turboprop not piston powered.

You're right -- I do know that or at least they tell me I'm supposed to...that's what I get for commenting on here when I'm falling sleep.

Quoting ridgid727 (Reply 12):
It really does suck, and for years Voss has operated on the premise that there will always be someone there to bail him out when the heat is on. It was a really hard blow to him when Montana highline cities were not approved for his bid.
Voss has for years really mismanaged ZK and this model has been used in some IATA classes in airline management as an example.

You're exactly right. ZK is run by great people, but management has held them back for years. You couldn't be more right when you say Voss expects someone to bail him out, except this time, I don't think they will. The fact that they're in a situation of defaulting on high time, aging, generally oversized aircraft is an indication that they've ignored some pretty glaring issues for quite a while.

This has nothing to do with the economy, because EAS funded airlines get paid whether people fly with them or not...it has everything to do with poor maintenance of their aircraft leading to poor reliability because they over-utilize their airplanes, which pisses off locals, which means they lose their bid on the next EAS RFP. Which brings us to now, after they lost a pretty major market in Montana, and they're still stuck with these aircraft that SHOULD have already begun phasing out for something newer years ago, and now they risk losing the lot.

I hate to admit that ZK should go down, but at the very least, Voss and the entire management team has to go if the airline has a chance in hell of surviving. If they go chapter 11 and restructure/reorganize, build a new management team capable of making the necessary restructuring changes, unload some of their airplanes they're defaulting on anyway -- not to mention they don't work with their business model anymore, and acquire aircraft that will fit whatever new business model they look to reorganize into, then maybe they've got a shot. But, I'm well aware this is a pipe dream. Voss will never let go of the reigns and he will drive his company into the ground. Everyone will lose their jobs but he'll probably still be a rich man with a trophy wife and a nice summer home. Oh, the expletives I could/should use here right now...

Maybe I could run ZK. I'd do a hell of a lot better than Dougie. Maybe we could make it an a.net project lol. With all of the "experts" on here, let's see if we could out our mouths where our money is.



1954 1974 1990 2014 -- Los geht's!
User currently offlinebjorn14 From Norway, joined Feb 2010, 3412 posts, RR: 2
Reply 20, posted (2 years 11 months 2 weeks 3 days 1 hour ago) and read 12893 times:

Quoting atcsundevil (Reply 19):
Maybe I could run ZK. I'd do a hell of a lot better than Dougie. Maybe we could make it an a.net project lol. With all of the "experts" on here, let's see if we could out our mouths where our money is.

Market cap for GLUX is only $11.83MM. What I find particularly insane is that at your largest hub you don't have a codeshare with the largest airline at that hub. To me that says what a sorry airline you run.



"I want to know the voice of God the rest is just details" --A. Einstein
User currently offlineenilria From Canada, joined Feb 2008, 7111 posts, RR: 13
Reply 21, posted (2 years 11 months 2 weeks 2 days 22 hours ago) and read 12844 times:

Quoting cbphoto (Reply 6):
but now with the EAS somewhat safe for now, it might be different! But who knows?

Investors will look at more than one year of stability before handing over $50 million.

Quoting cbphoto (Reply 6):
Did it say when the leases on the 6 EMB-120s would be terminated? Sounds like stuff around here is going to get pretty serious and bad...fast!

The B1900's may be marketable, but the E120s are worthless. I questions whether Raytheon really wants them. ZK may not want them either.

Quoting atcsundevil (Reply 8):
I hate to say this because ZK is a cool little airline, but I'm worried this is the beginning of the end.

Well, they are generally profitable, so it would be unusual to see a profitable airline die.

Quoting bjorn14 (Reply 9):
Why does ZK not have a fleet renewal plan?

Because they chose EAS and they live hand to mouth.

Quoting ridgid727 (Reply 12):
Voss has for years really mismanaged ZK and this model has been used in some IATA classes in airline management as an example.

I'm not sure that is true. They could have gone down the RJ path and they looked at it. I'm not sure that would have been better. That business has been decimated. EAS is in danger too, but I'm not sure the future is so different from flying small RJs. Both are fairly bleak.

Quoting LAXintl (Reply 18):
If you look at ZK earnings, they essentially have broken even, or turned small profits these last 3 or so years, but are only doing it without having to pay much for their aircraft.

I'm not sure the business model runs if they had to actually pay the ownership cost, and not continually push the mountain of payments back.

There is truth to all that, but somebody has to fly EAS...unless they finally kill it.

Quoting atcsundevil (Reply 19):
I hate to admit that ZK should go down, but at the very least, Voss and the entire management team has to go if the airline has a chance in hell of surviving.

That won't help. The problem is that the EAS business model is pretty low margin. They have still done better than all the legacies and have not filed Ch11 yet. The legacies have all renegotiated lease rates over and over, but they didn't get stuck with this balloon payment. The question is whether Raytheon wants to shut down ZK. Another thing to consider is that Raytheon is a big defense contractor and if Raytheon kills ZK, they will gain a lot of enemies in the House and Senate. The EAS program has some pretty powerful support which is why it seems to survive despite so much pressure against it.

Quoting bjorn14 (Reply 20):
Market cap for GLUX is only $11.83MM. What I find particularly insane is that at your largest hub you don't have a codeshare with the largest airline at that hub.

When did they code share with UA end? I thought it was a dual code share with both F9 and UA?


User currently offlineKarlB737 From United States of America, joined Mar 2004, 3100 posts, RR: 10
Reply 22, posted (2 years 11 months 2 weeks 2 days 21 hours ago) and read 12805 times:

Quoting cbphoto (Reply 6):
Every major airline works with the FAA to ensure safe operations, we are no different, so I am not sure what you are getting at with the FAA investigation?

Above, the question you posed.

The answer to your question below:

Quoting atcsundevil (Reply 19):
...it has everything to do with poor maintenance of their aircraft leading to poor reliability because they over-utilize their airplanes, which pisses off locals, which means they lose their bid on the next EAS RFP. Which brings us to now, after they lost a pretty major market in Montana, and they're still stuck with these aircraft that SHOULD have already begun phasing out for something newer years ago, and now they risk losing the lot.


Here is the potential result of maintenance issues as stated in another thread:

FAA Fines Alaska Air Over Maintenance Violations
http://www.airliners.net/aviation-fo...eneral_aviation/read.main/5251936/

[Edited 2011-09-10 08:19:59]

User currently offlineridgid727 From United States of America, joined Jul 2008, 1113 posts, RR: 0
Reply 23, posted (2 years 11 months 2 weeks 2 days 9 hours ago) and read 12634 times:

Quoting atcsundevil (Reply 19):
Voss will never let go of the reigns and he will drive his company into the ground. Everyone will lose their jobs but he'll probably still be a rich man with a trophy wife and a nice summer home. Oh, the expletives I could/should use here right now...

You hit the nail on the dead. The Czar in Cheyenne will not loosen the reins, The company will go down.

Quoting enilria (Reply 21):
Well, they are generally profitable, so it would be unusual to see a profitable airline die.

Profitable? More like cooked books. I think F9 could turn profits if they didn't pay for the leases on the aircraft they fly, and keep pushing the baloon payments bak another 3 months.


User currently offlinecbphoto From United States of America, joined Dec 2003, 1551 posts, RR: 5
Reply 24, posted (2 years 11 months 1 week 5 days 6 hours ago) and read 12272 times:

Well..another update! Looks like Raytheon is dumping all of it's stock in ZK! It may have been previously reported, but either way, its a pretty sizable amount of stocks!

http://xml.10kwizard.com/filing_raw.php?repo=tenk&ipage=7807290



ETOPS: Engines Turning or Passengers Swimming
25 usxguy : Doug's ex wife also sold her stock in the company this summer as well..... cbphoto - I mentioned it in my blog (linked in one of the posts above) and
26 Post contains links cbphoto : http://www.wyomingbusinessreport.com/article.asp?id=59929 Looks like ZK has made a public announcement on the stocks as well as the balloon payment! E
27 enilria : That's pretty bleak. Who would buy shares in a company that is basically doomed?
28 Post contains links LAXintl : You can read the SEC filing at: http://www.sec.gov/Archives/edgar/da...4397/000119312511242171/dposam.htm Essentially all they are doing it flooding t
29 ridgid727 : It sounds as though Raytheon is frustrated with the ongoing Saga though. I wonder if any of those cities served exclusively by ZK are attempting to at
30 Post contains images FlyASAGuy2005 : For a minute I would have said you were onto something but DL would have wanted something big in turn. At least with the cash injection to Trans Stat
31 ridgid727 : If DL did show an interest, I think most of those Mountain States routes would probably be transferred to SLC or MSP
32 cbphoto : That, or if they sell enough, they might try to attract a bigger investor to foot the rest of the 30+ Million they owe! Its been known for a few year
33 bjorn14 : I don't think so as DL dropped BTM why would they want to pick up even lesser enplaned cities.
34 Post contains links ridgid727 : Was unaware that DL dropped BTM. It is still bookable thru August of 2012. I read sometime ago that Boeing discharged a $10million dollar debt last s
35 ScottB : Actually, this is Raytheon selling its stake:
36 KarlB737 : From the article: "Great Lakes reported total operating revenue of $125.4 million in 2010," You would think that they could have at least paid $15 mi
37 smoot4208 : Have they already returned their 6 EMB-120s? It said that the 6 B1900Ds that Raytheon terminated the leases on will be returned from late august to De
38 cbphoto : You would think, but ZK has not been known for it's "great" business decisions! ZK should have done a lot of things differently in order to have avoi
39 LAXintl : Thanks for clarifying that. In other words, this does nothing zero about the $31.1mil balloon payment. ZK does not have $15mil to pay. Their net prof
40 GQfluffy : Half the reason Great Lakes never made it in Montana was it's flying most if not all of those small EAS routes out of DEN versus BIL. How is SLC or M
41 ridgid727 : It doesn't. Im stating that DL would not be interested in investing in a commuter airline only flying between Havre and Billings. If there is nothing
42 rdh3e : Net Income (profit) doesn't really relate to debt payments. Debt payments is really what you mentioned in your last sentence, Cash on Hand. Cash is k
43 KarlB737 : In essence is sounds like either ZK is done or a clone of RAH comes along and: 1. Pays off the total debt. 2. Inserts some newer and additional turbo
44 cbphoto : That would be nice, but I am not even sure who would do that? Though as I type this, I remembered that Gulfstream International found a financier to
45 boslax : Could Raytheon already have a deal to place the ZK aircraft into someone else's fleet, such as Gulfstream. May take a little time to ramp-up, buf if R
46 KarlB737 : I agree that is why someone else would come in and make the much needed changes that I listed so the airline would become something positive and not
47 enilria : The argument has been made that they were only profitable with free aircraft. Raytheon is dumb. They are going to get close to nothing. The smartest
48 ScottB : Maybe yes, maybe no. That really depends on what they can get for the mortgaged aircraft if they can take them away from Great Lakes. Having an extra
49 cbphoto : Well, Gulfstream is apparently getting a few Saab 340s (ex XJ?) starting in November, so not sure that they would even want more 1900s. I can say a f
50 Post contains links ridgid727 : Back in August, the Nassau Gaurdian had an article that said that Gulfstream was getting around 25 Saabs to replace their 19 pax aircraft operating in
51 USXguy : apparently lots of people are offering cash for decent 1900Ds. so this may not bode well for Lakes.
52 Post contains links cbphoto : http://www.kgwn.tv/story/15519524/gr...akes-airlines-being-hit-by-economy Slightly different tone to this article then the last one, including word fr
53 LAXintl : Getting refinanced still does not solve the basic problem of having the outstanding debt still hanging over their heads. Whether Raytheon or someone e
54 enilria : The timing is just amateurish. They could have sold this stock a year ago. It's just stupid to sell it just as they threaten to ruin the company. It'
55 rdh3e : That's illegal, and they would be investigated and convicted of securities fraud. That said, the best way this can possibly turn out is as follows: 1
56 USXguy : Apparently Great Lakes cancelled the October new hire class for pilots... I wonder if they are expecting more-than-anticipated aircraft leaving the fl
57 william : Isn' t the BAE Jetstream still for sale? Its on BAE web page. When American Eagle started out of DFW they used Jetstream 31s and old Convairs (thats a
58 cbphoto : Well..that could also be because of the 7 1900s that are leaving the fleet and the general reduction in flying for the winter months. We are pretty w
59 jgrantco : Are stats published for LF, O&D, connecting. After watching about a dozen or more flights come into DEN early this morning (Sun) from LBL, GCK, LB
60 cbphoto : LF really vary on time of day, day of week and sometimes just in general. HYS generally always goes out with 15-19 PAX and sometimes we even bump pas
61 bjorn14 : Nope. Production continued for the J31/32 until 1993 and the J41 stopped being built in 1997.
62 ridgid727 : ZK would and still could be a great and progressive airline, if the lead weight of VOSS were to just exit the company and never come back. He has sty
63 cbphoto : 99% of all the issues ZK has stems from upper management! For too long ZK has had the mentality of "we can make money fast and easy through the EAS p
64 USXguy : She left last year I believe to focus on her side business.
65 ScottB : We don't know if there were any prior restrictions on Raytheon with respect to selling its stake; Raytheon's shares were not registered, as disclosed
66 jgrantco : The DEN markets for ZK seem perfect for this type of operation due to distances involved. There are no good alternates for most of these cities outsid
67 cbphoto : Chuck Howell, is the CEO (or was, he might have a new title now) and he is a direct result of Raytheon. In a matter of fact I believe he used to (or
68 KarlB737 : What if Raytheon offered a continuation arrangement for the airline of the aircraft conditional on the exit of Voss. Hmmmm.
69 cbphoto : Well, according to an internal memo we received today, the reason most of this is going down the way it is, is due to the fact that Raytheon does ind
70 smoot4208 : So worst case, they will still retain 6 B1900D
71 RIDGID727 : I would assume ZK is talking with Chapter 11 lawyers. That would buy them more time. If not, who out there could take on those EAS contracts. Gulfstr
72 rdh3e : Can another carrier just grab them up, or does the government have to re-award them? That could be the exact bone that the Dems are looking to throw
73 JBo : DOT Procedure would require the cities to open for bid. When Skyway was announcing they were shutting down, they informed the DOT of their intentions
74 enilria : It wouldn't help much because they would eliminate the balloon payment, but Raytheon would still make them pay market rates for the planes going forw
75 Post contains links cbphoto : Correct, plus the 6 EMB-120! However it has been made public that the company would cease operations if the 1900s were repossessed. ZK could not func
76 LAXintl : Anyone hear of any updates in their ability obtain new financing? We are merely 2-3 business days away from the latest deadline to cough up the $31.8m
77 Post contains links KarlB737 : I did some digging. It comes from KGWN-TV in the Cheyenne area. It doesn't say much and it was updated October 5th, 2011. Whether this is dated info
78 ScottB : A bankruptcy filing won't actually eliminate the balloon payment; it will only postpone Great Lakes' contractual obligation to either make the paymen
79 enilria : If they filed for Ch11 I don't even think they would be allowed to pay the balloon payment at 100 cents on the dollar as it would discriminate agains
80 ScottB : Actually, they would because the balloon payment is secured debt -- secured by the aircraft. The court can't force RTN to take a haircut on the aircr
81 ridgid727 : Tomorrow is October 17th, the day ZK has the $31million plus due. Anyone know if Raytheon is going to take possession of some 1900D's soon?
82 smoot4208 : I feel like it will just get extended again like it has the past 3 deadlines
83 cbphoto : I think only a few individuals at Raytheon and ZK really know that answer. I have a hunch, that even if Raytheon were to repossess the aircraft, they
84 Post contains links ridgid727 : There was an article last week in a Cheyenne based newspaper where freelance writers write, concerning Great Lakes that was spot on and while it doesn
85 FlyASAGuy2005 : So...today's the day. What's the verdict? Any specifics coming out as yet?
86 Post contains links KarlB737 : I just E-Mailed the factual details from this thread to KGWN-TV News in Cheyenne and asked them if they had a story on this matter. I am not holding m
87 ScottB : Well, I can only think of three possible outcomes today: (1) Great Lakes & Raytheon push the date back yet again in exchange for another payment.
88 KarlB737 : I just got a reply from KGWN-TV and this is it: "Thank you for the email and information. We looked into this last week, but didn’t get any comment
89 cbphoto : Nice work, keep us posted if hear anything more! Talked to a few guys at work today (lucky me, I have the day off) and so far no one has heard any ne
90 cbphoto : Since opening bell, ZK's stock has risen almost 46%, something could be in the works here!
91 ScottB : I wouldn't put that much into it; that trade was almost an hour-and-a-half ago, and even though the volume is well above the average daily volume for
92 Post contains links cbphoto : http://biz.yahoo.com/e/111017/glux.ob8-k.html Another extension, this time until November, 17th 2011 with an extension fee of 125K!
93 Post contains images ScottB : So I called it correctly!
94 Post contains images cbphoto : That you did! Should we all start wagers to see what happens on November 17th?
95 point2point : I have a feeling that after adding up all of these extension and interest payments that ZK has made to Raytheon were applied just as principle paymen
96 seabosdca : Easy to see, hard to prove. Especially when dealing with a penny stock, where 46% can be a routine intraday swing. I would eat a hat if the SEC went
97 enilria : Will they have another $125k by then? lol
98 ScottB : I agree that they wouldn't bother since there was ultimately no effect. If, however, it did materially affect trading, they'd likely look into it. An
99 Post contains images LAXintl : Well the extensions are getting ever shorter. First it was years, then 9 mos, then 3 mos, then 45 days and now 30-days. What a crazy way to run an ent
100 ridgid727 : As one writer put it the survival of Great Lakes is legendary. Every time they are about to drop off the cliff, Raytheon throws out a life line, and t
101 md94 : I hope they work it out because I am flying on ZK during the Thanksgiving Holiday out of DEN.
102 LAXintl : I see ZK lost some government cheese EAS flying. DOT elected to award Garden City KS to American Eagle with flight to DFW much based on the community
103 cbphoto : GCK was pushing hard for Eagle, so it was not a huge surprise that we lost it. In reality, it is not that big of a loss for us, seeing as though PAX
104 smoot4208 : Did AA only win this award? I know a couple months back, they asked the DOT to postpone their decision so they could evaluate the feasibility of all
105 JBo : Seeing as many of these cities are within reasonable driving distance, if they all start having different carriers going to different hubs that may a
106 LAXintl : According to DOT, AA only put in for Garden City. The breakdown of submittals were: Garden City - American, Sky West, Great Lakes, Air Choice Hays - S
107 smoot4208 : Interesting that Sky West put some in out of DEN. I know DDC backed Great Lakes to DEN. With all of their troubles, they should've backed Sky West to
108 EDTrauma : Would love to know how many ZK employees have contributed to this forum. I started as ramp in PHX and moved up north with ZK. It's been mentioned befo
109 Post contains links rdh3e : While I have no comment on him as a person, at least he doesn't make "THAT" much money. Still a lot, but it's not outrageous. http://people.forbes.co
110 Post contains images cbphoto : Well...At least one person right here Don't read too much into that, that is just what Voss makes as the head of ZK! Voss has other interests in Oil
111 ridgid727 : Quite a few years back, Wasn't it Risley at Mesa that said all pilots are cut from the same t u r d, and Voss concurred . I think he has a great big
112 cbphoto : Voss has always had a close connection to Mesa, especially when Air Midwest was in existence. It has been noted numerous times that JO and Voss have
113 EDTrauma : Employee # 3315. Once a Laker, kept the scars...LOL
114 EDTrauma : More like a J.R. Ewing that could never cut it as a Bob Crandall wanna-be.
115 mhkansan : Here at MHK, some of the ex ZK people call the place "Great Mistakes" and have great disdain for Eagle. We've got our own problems here, but even thou
116 Post contains images cbphoto : Still stuck in the nightmare that is Lakes! I can't wait for the lifetime of scars this company will give me While I shouldn't talk bad about the com
117 EDTrauma : Keep the faith. Don't let them kill your passion. They almost did mine.
118 ridgid727 : OK, so 17th of NOV is rapidly approaching. Will we see Raytheon give into Voss again, or take their aircraft back?
119 Post contains links cbphoto : http://www.sec.gov/Archives/edgar/da...0119312511312344/d252809dnt10q.htm This was just posted, apparently a notification of late filing, so the compa
120 enilria : Does ZK have the money to keep posting $125,000 in late fees every few weeks?
121 cbphoto : That's the BIG question as to how long ZK can afford to continue paying the late fees. Raytheon knows this and they know that they can continue to co
122 USXguy : how is lakes broke? they are profitable.. just not *VERY* profitable...
123 nws2002 : They are only profitable (barely) because they've been allowed to avoid paying Raytheon for so long.
124 smoot4208 : So are we taking any bets? I'm thinking they will just keep extending the deadline. If a month comes and ZK can't make the payment, then they can just
125 USXguy : that's the thing - there ARE people out there begging for 1900s.
126 cbphoto : I bet a beech 1900 that they extend it! If not, you'll have 25 to choose from! Believe it or not, it's not the airlines that are wanting the 1900s, b
127 Post contains links cbphoto : http://www.marketwatch.com/story/gre...new-financing-agreement-2011-11-17 It appears ZK has dodged the bullet and has secured new financing for Raythe
128 point2point : The article doesn't say much, but from the Raytheon pov, hey, why not? They've been milking this cash cow for years now, with just late fees alone it
129 Post contains links usxguy : And they're now public. http://www.easflights.com/2011/11/its-a-good-day-in-cheyenne/ Raytheon was able to dump their shares in the company and Chuck
130 point2point : Holy Cow....... Well, now pick up the pieces and move on.... isn't that what's usually advised after a divorce? And now without all of these enormous
131 ScottB : Um, it went from bad to worse. The majority of the new debt carries a minimum rate of 15.5%. And they paid the lender $2.5 million as a closing fee.
132 Post contains images point2point : Well.... okay..... I don't have my amortization sheets out, and don't know really the complete picture of the numbers, but couldn't it be somehow bet
133 ScottB : The payment schedule is in the company's SEC filing. The issue as I see it is that the loan repayment will consume the vast majority of the company's
134 Post contains links LAXintl : Interview with CEO Chuck Howell. Surprisingly he seems quite optimistic about the restructured loans even though they carry a floating interest rate,
135 Post contains links LAXintl : Per SEC filings looks like Raytheon managed to sell their 5,371,980 shares on or about the 16th and are now clear of any ownership interest. Also the
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