Alias1024
Posts: 2526
Joined: Mon Oct 25, 2004 11:13 am

Re: SkyWest to sell ExpressJet

Tue Dec 18, 2018 11:32 pm

In the end this is probably better for both sides. The animosity and bad blood between the two sides of SkyWest Inc. has gone on for way too long. SkyWest can refocus on one airline and ExpressJet can hopefully have a good future with United. Sometimes I wonder how different history of the regional airlines in the US could have been if XJT hadn't had such arrogant and poor management after they were spun off from CO.

ThePinnacleKid wrote:
We had just finished a new long term CPA of 7 years... when SKW attempted in 2008 to get us.. they failed.. in 2010 they tried again, had a 10 year CPA in place lined up with CO behind XJT's back, and then succeeded in the transaction as at that point CO basically told XJT they would do the deal or at the end of the current contract they had they would be COMAIR'd... soooooo hello SKW, ASA, XJT cluster f that transpired...

I thought the 7 year CPA was the result of SkyWest trying to buy ExpressJet.

If I remember my history correctly, XJT had already learned they were losing 69 aircraft worth of flying as allowed by the old CPA. CO expected XJT would return them and they could then be leased to Republic to do flying for CO. XJT shocked CO by exercising their first right to keep the lease on the airplanes and used them to start up the aquafresh painted money incinerator. Republic added CRJs to their certificate for a while to cover the flying.

When it became clear the branded operation would take down the whole company, XJT then turned around and signed a deal to fly some frames for DL, below cost, out of LAX and SLC. They had to pay the leases either way so they chose the DL CPA because it burned cash more slowly than the branded operation. That lowball contract led to a reset on rates in the ASA CPA with DL, which is when SkyWest management went to work. They negotiated the CO CPA to be flown with XJT. When XJT agreed to a new CPA at similar rates to the OO deal, the buyout offer was rescinded and SkyWest walked away with millions from Continental for terminating their agreement.

Then SkyWest bought XJT two years later for less than the first offer, eliminating a major competitor in bidding on new CPAs, and getting DL flying on the west coast back under SkyWest control.
It is a mistake to think you can solve any major problems with just potatoes.
 
n7371f
Posts: 1552
Joined: Fri Jul 04, 2008 3:54 pm

Re: SkyWest to sell ExpressJet

Wed Dec 19, 2018 4:18 am

The former CEO of CommutAir, who resigned just days ago, has his home address linked to the state of Georgia filing for incorporation address for ManaAir (or whatever it is). So there's something more at play here.
 
flyguy84
Posts: 770
Joined: Thu Dec 22, 2016 7:26 pm

Re: SkyWest to sell ExpressJet

Wed Dec 19, 2018 4:26 am

n7371f wrote:
The former CEO of CommutAir, who resigned just days ago, has his home address linked to the state of Georgia filing for incorporation address for ManaAir (or whatever it is). So there's something more at play here.

Of course there is, this is just one piece of the puzzle.
SFO
 
strfyr51
Posts: 3830
Joined: Tue Apr 10, 2012 5:04 pm

Re: SkyWest to sell ExpressJet

Wed Dec 19, 2018 7:49 am

N766UA wrote:
ScottB wrote:
Web500sjc wrote:

I think it was more to do with the employees (pilots) loosing faith in OO management. The pilots union just signed a new contract that gave OO 3 months to sell ExpressJet or else the contract would re open, the pilots themselves have been leaving in droves and they have not had the ability to hire replacements. The FAs were getting furloughed and thier HQ is in a hanger on the north side of the ATL airport that has delta branding all over it, even though they no longer do DL connection flying.

Honestly I don’t think the day to day employees felt that OO mangment in SGU had thier backs when it came to anything- and demanded a change.


Well, OO management wouldn't have agreed to a contract like that if they didn't want to dump ExpressJet anyway. EV has been a boat anchor on SKYW's financials pretty much since SKYW bought them -- EV lost $32.5 million last year and has lost $12.4 million through the first three quarters of this year. The DL Connection flying is done (or will be done by year-end) and the AA Eagle flying ends next year. By the time the deal closes, ExpressJet will be back to what it was about 20 years ago -- flying 100 or so ERJs with golden globes on blue tails.


LOL “Expressjet has been a boat anchor.” Sorry, but Skywest is the one who negotiated their contracts, set their SOP’s, and had the power to manage every detail of their operations. If Expressjet wasn’t performing, that’s on Skywest.

I hope United capitalizes on this, too. They’re heretofore the only legacy without a WO regional, and frankly the motley group they have is pretty underwhelming, especially with all those 50-seaters. I think it’s about time they worked to improve United Express.
.

United By contract with UA- ALPA cannot OWN another airline directly and NOT fly it under the United Banner with those pilots NOT being on the Mainline seniority list with Mainline Pay and Benefits. This was made clear to United a VERY long time ago and United does Not want to risk a Pilot strike to push the p.oint!!
We've pretty much had Labor peace for quite a while even after the merger. It would take a FOOL to upset the apple cart now..
 
Alpha5
Posts: 1
Joined: Wed Dec 19, 2018 7:36 am

Re: SkyWest to sell ExpressJet

Wed Dec 19, 2018 8:12 am

flyguy84 wrote:
n7371f wrote:
The former CEO of CommutAir, who resigned just days ago, has his home address linked to the state of Georgia filing for incorporation address for ManaAir (or whatever it is). So there's something more at play here.

Of course there is, this is just one piece of the puzzle.



Ok so let me just say this as an anonymous C5 employee. There were rumors floating around last year in the office of UA buying ExpressJet and merging with C5 along with a move to Chicago for a good couple of weeks. (Personally I argued SkyWest wasn't going to let go of ExpressJet, I told folks they were crazy, but I was clearly mistaken with today's announcement.) So now with this is all everyone is talking about.
 
ThePinnacleKid
Posts: 530
Joined: Wed Feb 23, 2005 9:47 am

Re: SkyWest to sell ExpressJet

Wed Dec 19, 2018 1:03 pm

Alias1024 wrote:
In the end this is probably better for both sides. The animosity and bad blood between the two sides of SkyWest Inc. has gone on for way too long. SkyWest can refocus on one airline and ExpressJet can hopefully have a good future with United. Sometimes I wonder how different history of the regional airlines in the US could have been if XJT hadn't had such arrogant and poor management after they were spun off from CO.

ThePinnacleKid wrote:
We had just finished a new long term CPA of 7 years... when SKW attempted in 2008 to get us.. they failed.. in 2010 they tried again, had a 10 year CPA in place lined up with CO behind XJT's back, and then succeeded in the transaction as at that point CO basically told XJT they would do the deal or at the end of the current contract they had they would be COMAIR'd... soooooo hello SKW, ASA, XJT cluster f that transpired...

I thought the 7 year CPA was the result of SkyWest trying to buy ExpressJet.

If I remember my history correctly, XJT had already learned they were losing 69 aircraft worth of flying as allowed by the old CPA. CO expected XJT would return them and they could then be leased to Republic to do flying for CO. XJT shocked CO by exercising their first right to keep the lease on the airplanes and used them to start up the aquafresh painted money incinerator. Republic added CRJs to their certificate for a while to cover the flying.

When it became clear the branded operation would take down the whole company, XJT then turned around and signed a deal to fly some frames for DL, below cost, out of LAX and SLC. They had to pay the leases either way so they chose the DL CPA because it burned cash more slowly than the branded operation. That lowball contract led to a reset on rates in the ASA CPA with DL, which is when SkyWest management went to work. They negotiated the CO CPA to be flown with XJT. When XJT agreed to a new CPA at similar rates to the OO deal, the buyout offer was rescinded and SkyWest walked away with millions from Continental for terminating their agreement.

Then SkyWest bought XJT two years later for less than the first offer, eliminating a major competitor in bidding on new CPAs, and getting DL flying on the west coast back under SkyWest control.


Sort of correct but not really.... your timeline and circumstances are slightly off

The 7 Year XJT CPA was formally announced June 5, 2008. - the original press release:

"HOUSTON, June 5 /PRNewswire-FirstCall/ -- Continental Airlines (NYSE: CAL - News) today announced that it has reached a new seven-year capacity purchase agreement with ExpressJet Airlines, Inc. to provide regional jet service for Continental Airlines at rates that are lower than rates under its current agreement and more competitive with those offered by other regional service providers. The new agreement is effective July 1, 2008.
The new contract enables Continental to continue to benefit from the excellent service and substantial feed traffic provided by ExpressJet. The base agreement covers flying by ExpressJet of a minimum of 205 regional jets in the first year and a minimum of 190 regional jets thereafter.

In addition, ExpressJet has the right to return to Continental 39 Embraer 50-seat regional jets that ExpressJet currently uses for non-Continental contract flying. Continental plans to add the returned aircraft to the new agreement and withdraw from the agreement up to 30 of its Embraer 37-seat regional jets currently flown by ExpressJet for Continental. Continental will then sublease or ground all of the withdrawn Embraer 37-seat regional jets to better align regional capacity with current market conditions. Additionally, the agreement reduces the rent Continental charges ExpressJet on 30 other regional jets that ExpressJet will retain for seven years to fly at its own revenue risk.

Continental and ExpressJet also entered into a settlement agreement and release of all the parties' claims relating to payments and rates under the original capacity purchase agreement, including all disputes previously disclosed as possible matters for arbitration."

----- This was done RIGHT around the time SkyWest tried to get XJT the first time... The 69 plane fleet reduction was already in full swing at this point and things didn't go the way CO had intended, XJT exercised their right to retain the aircraft (KNOWING it was going to be at a loss) as a chess move against the plan by CO at the time to bring in CHQ to have a whipsaw regional bidder (UA isn't in the picture back then)... CO also even went after XJT to give up our proprietary W&B program on the 145 to CHQ... we refused... this started a period of a massive Pi$$ing match between XJT and CO management... The purpose of branded and DL contracts were to prove points and simply minimize loss while denying CO the ability to use those aircraft against ourselves. In addition, The BIGGEST failure of CO in the chess move was they released the most expensive lease rate 145's without regard to which aircraft of the 274 they were... the 69 they released ended up being the newest nicest 145XR's and 145LR's... the sudden loss of the most capable 145 in the world (XR) crippled CO in ways they didn't foresee... no other RJ that could fly for CO at the time (50 seats or less) could do what the XR could with payload and range... so you saw the shut down of IAH-BOI, IAH-BFL, etc... Hence why when 2010 came around... bad blood was running strong between CO and XJT

CO had basically stated to XJT Management if you do NOT go through with our back door negotiated new deal (10 year CPA for less planes) with SKW to acquire you; we will not renew your 7 year CPA when it runs out (5 years away) and you will cease to exist. The final chess move.


So there ya go... the real original CPA (7 Year XJT negotiated with CO) and the sale to SKW 10 Year CPA for XJT/ASA acquisition from 2010... Despite what SKW always tried to say and how XJT was sinking them... reality is much different. SKW negotiated that 10 year loss making XJT contract from day one. It was NOT our CPA at all... so cue the shooting star "The More You Know"
"Sonny, did we land? or were we shot down?"
 
flyguy84
Posts: 770
Joined: Thu Dec 22, 2016 7:26 pm

Re: SkyWest to sell ExpressJet

Wed Dec 19, 2018 2:29 pm

Rdh3e wrote:
flyguy84 wrote:
Rdh3e wrote:
Different company. Perhaps you could take a minute to check your facts before posting?

"Headquartered in North Olmsted, Ohio, CommutAir, operating as United Express, was founded in 1989 and is majority owned by Champlain Enterprises Inc. and 40% owned by United Airlines."
http://www.flycommutair.com/aboutus/

Allow me to clarify - the guy who owns a majority stake in CommutAir is one of the guys behind ManaAir.

And you can cite your source?




1- ManaAir, LLC is a Delaware Corporation. ManaAir, LLC is owned by KAir Enterprises, INC and United as a minority joint owner.

2- KAir Enterprises, INC is a Georgia Corporation. With the business address as the home residence of...
Subodh Karnik, the CEO of CommutAir until yesterday.
https://ecorp.sos.ga.gov/BusinessSea...%20Corporation

http://taxcommissioner.dekalbcountyg...=Y&pin=0789747
SFO
 
B737900ER
Posts: 1028
Joined: Thu Aug 31, 2006 10:26 am

Re: SkyWest to sell ExpressJet

Wed Dec 19, 2018 3:01 pm

Alias1024 wrote:
Sometimes I wonder how different history of the regional airlines in the US could have been if XJT hadn't had such arrogant and poor management after they were spun off from CO.

I remember being in the IAH training center around 2004-2005 and having one of the senior managers come give a pep talk. He said he couldn’t wait for the huge profit sharing checks and to be transporting all of CO’s passengers from SAT-MSY as they bypassed Houston waving at Gordon Bethune from 30,000 feet. It all sounded good. Then they showed the aqua fresh paint job concept.

I knew then it was time to jump ship
 
slider
Posts: 7385
Joined: Wed Feb 25, 2004 11:42 pm

Re: SkyWest to sell ExpressJet

Wed Dec 19, 2018 3:29 pm

ThePinnacleKid wrote:
Alias1024 wrote:
In the end this is probably better for both sides. The animosity and bad blood between the two sides of SkyWest Inc. has gone on for way too long. SkyWest can refocus on one airline and ExpressJet can hopefully have a good future with United. Sometimes I wonder how different history of the regional airlines in the US could have been if XJT hadn't had such arrogant and poor management after they were spun off from CO.

ThePinnacleKid wrote:
We had just finished a new long term CPA of 7 years... when SKW attempted in 2008 to get us.. they failed.. in 2010 they tried again, had a 10 year CPA in place lined up with CO behind XJT's back, and then succeeded in the transaction as at that point CO basically told XJT they would do the deal or at the end of the current contract they had they would be COMAIR'd... soooooo hello SKW, ASA, XJT cluster f that transpired...

I thought the 7 year CPA was the result of SkyWest trying to buy ExpressJet.

If I remember my history correctly, XJT had already learned they were losing 69 aircraft worth of flying as allowed by the old CPA. CO expected XJT would return them and they could then be leased to Republic to do flying for CO. XJT shocked CO by exercising their first right to keep the lease on the airplanes and used them to start up the aquafresh painted money incinerator. Republic added CRJs to their certificate for a while to cover the flying.

When it became clear the branded operation would take down the whole company, XJT then turned around and signed a deal to fly some frames for DL, below cost, out of LAX and SLC. They had to pay the leases either way so they chose the DL CPA because it burned cash more slowly than the branded operation. That lowball contract led to a reset on rates in the ASA CPA with DL, which is when SkyWest management went to work. They negotiated the CO CPA to be flown with XJT. When XJT agreed to a new CPA at similar rates to the OO deal, the buyout offer was rescinded and SkyWest walked away with millions from Continental for terminating their agreement.

Then SkyWest bought XJT two years later for less than the first offer, eliminating a major competitor in bidding on new CPAs, and getting DL flying on the west coast back under SkyWest control.


Sort of correct but not really.... your timeline and circumstances are slightly off

The 7 Year XJT CPA was formally announced June 5, 2008. - the original press release:

"HOUSTON, June 5 /PRNewswire-FirstCall/ -- Continental Airlines (NYSE: CAL - News) today announced that it has reached a new seven-year capacity purchase agreement with ExpressJet Airlines, Inc. to provide regional jet service for Continental Airlines at rates that are lower than rates under its current agreement and more competitive with those offered by other regional service providers. The new agreement is effective July 1, 2008.
The new contract enables Continental to continue to benefit from the excellent service and substantial feed traffic provided by ExpressJet. The base agreement covers flying by ExpressJet of a minimum of 205 regional jets in the first year and a minimum of 190 regional jets thereafter.

In addition, ExpressJet has the right to return to Continental 39 Embraer 50-seat regional jets that ExpressJet currently uses for non-Continental contract flying. Continental plans to add the returned aircraft to the new agreement and withdraw from the agreement up to 30 of its Embraer 37-seat regional jets currently flown by ExpressJet for Continental. Continental will then sublease or ground all of the withdrawn Embraer 37-seat regional jets to better align regional capacity with current market conditions. Additionally, the agreement reduces the rent Continental charges ExpressJet on 30 other regional jets that ExpressJet will retain for seven years to fly at its own revenue risk.

Continental and ExpressJet also entered into a settlement agreement and release of all the parties' claims relating to payments and rates under the original capacity purchase agreement, including all disputes previously disclosed as possible matters for arbitration."

----- This was done RIGHT around the time SkyWest tried to get XJT the first time... The 69 plane fleet reduction was already in full swing at this point and things didn't go the way CO had intended, XJT exercised their right to retain the aircraft (KNOWING it was going to be at a loss) as a chess move against the plan by CO at the time to bring in CHQ to have a whipsaw regional bidder (UA isn't in the picture back then)... CO also even went after XJT to give up our proprietary W&B program on the 145 to CHQ... we refused... this started a period of a massive Pi$$ing match between XJT and CO management... The purpose of branded and DL contracts were to prove points and simply minimize loss while denying CO the ability to use those aircraft against ourselves. In addition, The BIGGEST failure of CO in the chess move was they released the most expensive lease rate 145's without regard to which aircraft of the 274 they were... the 69 they released ended up being the newest nicest 145XR's and 145LR's... the sudden loss of the most capable 145 in the world (XR) crippled CO in ways they didn't foresee... no other RJ that could fly for CO at the time (50 seats or less) could do what the XR could with payload and range... so you saw the shut down of IAH-BOI, IAH-BFL, etc... Hence why when 2010 came around... bad blood was running strong between CO and XJT

CO had basically stated to XJT Management if you do NOT go through with our back door negotiated new deal (10 year CPA for less planes) with SKW to acquire you; we will not renew your 7 year CPA when it runs out (5 years away) and you will cease to exist. The final chess move.


So there ya go... the real original CPA (7 Year XJT negotiated with CO) and the sale to SKW 10 Year CPA for XJT/ASA acquisition from 2010... Despite what SKW always tried to say and how XJT was sinking them... reality is much different. SKW negotiated that 10 year loss making XJT contract from day one. It was NOT our CPA at all... so cue the shooting star "The More You Know"


That's darn near precisely how I recall it as well. I'd add to that, however, that the negotiations were going so onerously and slowly that Larry Kellner got involved late to push it along, IIRC, things got really contentious late in 2007 between CO and XJT. XJT keeping the XRJs really pissed CO off.
 
Rdh3e
Posts: 3518
Joined: Wed Mar 30, 2011 2:09 pm

Re: SkyWest to sell ExpressJet

Wed Dec 19, 2018 3:31 pm

flyguy84 wrote:
Rdh3e wrote:
flyguy84 wrote:
Allow me to clarify - the guy who owns a majority stake in CommutAir is one of the guys behind ManaAir.

And you can cite your source?




1- ManaAir, LLC is a Delaware Corporation. ManaAir, LLC is owned by KAir Enterprises, INC and United as a minority joint owner.

2- KAir Enterprises, INC is a Georgia Corporation. With the business address as the home residence of...
Subodh Karnik, the CEO of CommutAir until yesterday.
https://ecorp.sos.ga.gov/BusinessSea...%20Corporation

http://taxcommissioner.dekalbcountyg...=Y&pin=0789747


You have not established that he is the majority owner of CommutAir...
 
flight152
Posts: 3411
Joined: Fri Nov 24, 2000 8:04 am

Re: SkyWest to sell ExpressJet

Wed Dec 19, 2018 3:38 pm

fdxtulmech wrote:
Yup, Skywest used legacy XJT and ASA to gain more profitable routs for Skywest while pushing all of the less profitable 50 seat routs onto XJT. I worked there for nearly 20 years and watched a great company be torn apart by Skywest. Every time we made progress or get close to being profitable we would get knocked back down. Our management team couldn't even make decisions during contract negotiations without having to wait for Skywest to okay it. When they came in we had 274 aircraft and I don't know how many ASA had and now there down to what, 120ish? They lost the Delta contract, the American contract and have all but scuttled the legacy ASA side. I wish those guys all the luck in the world. Things might be looking up and they can finally get some new equipment on property.

You’re obviously confused how the whole fee for departure works. For the regional, there is no “profitable route”, they get paid the same whether or not the flight is empty or full.
 
Alias1024
Posts: 2526
Joined: Mon Oct 25, 2004 11:13 am

Re: SkyWest to sell ExpressJet

Wed Dec 19, 2018 4:07 pm

ThePinnacleKid wrote:
Alias1024 wrote:
In the end this is probably better for both sides. The animosity and bad blood between the two sides of SkyWest Inc. has gone on for way too long. SkyWest can refocus on one airline and ExpressJet can hopefully have a good future with United. Sometimes I wonder how different history of the regional airlines in the US could have been if XJT hadn't had such arrogant and poor management after they were spun off from CO.

ThePinnacleKid wrote:
We had just finished a new long term CPA of 7 years... when SKW attempted in 2008 to get us.. they failed.. in 2010 they tried again, had a 10 year CPA in place lined up with CO behind XJT's back, and then succeeded in the transaction as at that point CO basically told XJT they would do the deal or at the end of the current contract they had they would be COMAIR'd... soooooo hello SKW, ASA, XJT cluster f that transpired...

I thought the 7 year CPA was the result of SkyWest trying to buy ExpressJet.

If I remember my history correctly, XJT had already learned they were losing 69 aircraft worth of flying as allowed by the old CPA. CO expected XJT would return them and they could then be leased to Republic to do flying for CO. XJT shocked CO by exercising their first right to keep the lease on the airplanes and used them to start up the aquafresh painted money incinerator. Republic added CRJs to their certificate for a while to cover the flying.

When it became clear the branded operation would take down the whole company, XJT then turned around and signed a deal to fly some frames for DL, below cost, out of LAX and SLC. They had to pay the leases either way so they chose the DL CPA because it burned cash more slowly than the branded operation. That lowball contract led to a reset on rates in the ASA CPA with DL, which is when SkyWest management went to work. They negotiated the CO CPA to be flown with XJT. When XJT agreed to a new CPA at similar rates to the OO deal, the buyout offer was rescinded and SkyWest walked away with millions from Continental for terminating their agreement.

Then SkyWest bought XJT two years later for less than the first offer, eliminating a major competitor in bidding on new CPAs, and getting DL flying on the west coast back under SkyWest control.


Sort of correct but not really.... your timeline and circumstances are slightly off

The 7 Year XJT CPA was formally announced June 5, 2008. - the original press release:

"HOUSTON, June 5 /PRNewswire-FirstCall/ -- Continental Airlines (NYSE: CAL - News) today announced that it has reached a new seven-year capacity purchase agreement with ExpressJet Airlines, Inc. to provide regional jet service for Continental Airlines at rates that are lower than rates under its current agreement and more competitive with those offered by other regional service providers. The new agreement is effective July 1, 2008.
The new contract enables Continental to continue to benefit from the excellent service and substantial feed traffic provided by ExpressJet. The base agreement covers flying by ExpressJet of a minimum of 205 regional jets in the first year and a minimum of 190 regional jets thereafter.

In addition, ExpressJet has the right to return to Continental 39 Embraer 50-seat regional jets that ExpressJet currently uses for non-Continental contract flying. Continental plans to add the returned aircraft to the new agreement and withdraw from the agreement up to 30 of its Embraer 37-seat regional jets currently flown by ExpressJet for Continental. Continental will then sublease or ground all of the withdrawn Embraer 37-seat regional jets to better align regional capacity with current market conditions. Additionally, the agreement reduces the rent Continental charges ExpressJet on 30 other regional jets that ExpressJet will retain for seven years to fly at its own revenue risk.

Continental and ExpressJet also entered into a settlement agreement and release of all the parties' claims relating to payments and rates under the original capacity purchase agreement, including all disputes previously disclosed as possible matters for arbitration."

----- This was done RIGHT around the time SkyWest tried to get XJT the first time... The 69 plane fleet reduction was already in full swing at this point and things didn't go the way CO had intended, XJT exercised their right to retain the aircraft (KNOWING it was going to be at a loss) as a chess move against the plan by CO at the time to bring in CHQ to have a whipsaw regional bidder (UA isn't in the picture back then)... CO also even went after XJT to give up our proprietary W&B program on the 145 to CHQ... we refused... this started a period of a massive Pi$$ing match between XJT and CO management... The purpose of branded and DL contracts were to prove points and simply minimize loss while denying CO the ability to use those aircraft against ourselves. In addition, The BIGGEST failure of CO in the chess move was they released the most expensive lease rate 145's without regard to which aircraft of the 274 they were... the 69 they released ended up being the newest nicest 145XR's and 145LR's... the sudden loss of the most capable 145 in the world (XR) crippled CO in ways they didn't foresee... no other RJ that could fly for CO at the time (50 seats or less) could do what the XR could with payload and range... so you saw the shut down of IAH-BOI, IAH-BFL, etc... Hence why when 2010 came around... bad blood was running strong between CO and XJT

CO had basically stated to XJT Management if you do NOT go through with our back door negotiated new deal (10 year CPA for less planes) with SKW to acquire you; we will not renew your 7 year CPA when it runs out (5 years away) and you will cease to exist. The final chess move.


So there ya go... the real original CPA (7 Year XJT negotiated with CO) and the sale to SKW 10 Year CPA for XJT/ASA acquisition from 2010... Despite what SKW always tried to say and how XJT was sinking them... reality is much different. SKW negotiated that 10 year loss making XJT contract from day one. It was NOT our CPA at all... so cue the shooting star "The More You Know"


I don't think there was any doubt the 10 year CPA was negotiated by SkyWest. I think they anticipated being able to drive costs down much further than they ultimately were able. Looking back through the history of it all, I was incorrect in the timing of the Delta CPA. That was signed in early 2007 and operated concurrently with the branded operation, not as a way to get out of branded flying.

Just to add a little more to the timeline, the offer from SKW to purchase XJT was made in early April 2008. The CPA was already done between SKW and CO and Continental's squeeze play was on at that point. Here's a link to the letter SkyWest CEO Jerry Atkin sent to XJT CEO Jim Ream and XJT Chairman of the Board Jim Bravante on April 7, 2008 with the offer to purchase the company.
http://www.sec.gov/Archives/edgar/data/ ... 08e992.htm

Here's the letter Continental CFO Jeff Misner sent to XJT on the same day, telling XJT to match the costs or lose 51 more airplanes, with the eventual end of the entire CPA at the end of 2012, and telling XJT they'd get notice of that loss on June 28th if a new CPA wasn't agreed to by that time.
http://www.sec.gov/Archives/edgar/data/ ... 08e993.htm
It is a mistake to think you can solve any major problems with just potatoes.
 
fdxtulmech
Posts: 12
Joined: Tue Apr 10, 2018 1:51 am

Re: SkyWest to sell ExpressJet

Thu Dec 20, 2018 1:34 am

flight152 wrote:
fdxtulmech wrote:
Yup, Skywest used legacy XJT and ASA to gain more profitable routs for Skywest while pushing all of the less profitable 50 seat routs onto XJT. I worked there for nearly 20 years and watched a great company be torn apart by Skywest. Every time we made progress or get close to being profitable we would get knocked back down. Our management team couldn't even make decisions during contract negotiations without having to wait for Skywest to okay it. When they came in we had 274 aircraft and I don't know how many ASA had and now there down to what, 120ish? They lost the Delta contract, the American contract and have all but scuttled the legacy ASA side. I wish those guys all the luck in the world. Things might be looking up and they can finally get some new equipment on property.

You’re obviously confused how the whole fee for departure works. For the regional, there is no “profitable route”, they get paid the same whether or not the flight is empty or full.


Except when United says we want a dual class on this route and all of the sudden XJT is no longer on that route and SkyWest has a brand new 175 flying it with a more profitable contract. At the same time, XJT is picking up "new" routes for the 50 seaters that SkyWest used to fly until they got rid of thier 50 seaters. So in effect, SkyWest was keeping the more profitable routes (under a new contract) and pushing other routes down to XJT under the old contract rates. I wasn't talking about how a regional gets paid, I was talking about how XJT never got any kind of fleet upgrade while SkyWest managed to pickup all kinds of dual class flying while complaining that XJT wasn't making money. It was a all a game.
 
ThePinnacleKid
Posts: 530
Joined: Wed Feb 23, 2005 9:47 am

Re: SkyWest to sell ExpressJet

Thu Dec 20, 2018 1:38 pm

Alias1024 wrote:
ThePinnacleKid wrote:
Alias1024 wrote:
In the end this is probably better for both sides. The animosity and bad blood between the two sides of SkyWest Inc. has gone on for way too long. SkyWest can refocus on one airline and ExpressJet can hopefully have a good future with United. Sometimes I wonder how different history of the regional airlines in the US could have been if XJT hadn't had such arrogant and poor management after they were spun off from CO.


I thought the 7 year CPA was the result of SkyWest trying to buy ExpressJet.

If I remember my history correctly, XJT had already learned they were losing 69 aircraft worth of flying as allowed by the old CPA. CO expected XJT would return them and they could then be leased to Republic to do flying for CO. XJT shocked CO by exercising their first right to keep the lease on the airplanes and used them to start up the aquafresh painted money incinerator. Republic added CRJs to their certificate for a while to cover the flying.

When it became clear the branded operation would take down the whole company, XJT then turned around and signed a deal to fly some frames for DL, below cost, out of LAX and SLC. They had to pay the leases either way so they chose the DL CPA because it burned cash more slowly than the branded operation. That lowball contract led to a reset on rates in the ASA CPA with DL, which is when SkyWest management went to work. They negotiated the CO CPA to be flown with XJT. When XJT agreed to a new CPA at similar rates to the OO deal, the buyout offer was rescinded and SkyWest walked away with millions from Continental for terminating their agreement.

Then SkyWest bought XJT two years later for less than the first offer, eliminating a major competitor in bidding on new CPAs, and getting DL flying on the west coast back under SkyWest control.


Sort of correct but not really.... your timeline and circumstances are slightly off

The 7 Year XJT CPA was formally announced June 5, 2008. - the original press release:

"HOUSTON, June 5 /PRNewswire-FirstCall/ -- Continental Airlines (NYSE: CAL - News) today announced that it has reached a new seven-year capacity purchase agreement with ExpressJet Airlines, Inc. to provide regional jet service for Continental Airlines at rates that are lower than rates under its current agreement and more competitive with those offered by other regional service providers. The new agreement is effective July 1, 2008.
The new contract enables Continental to continue to benefit from the excellent service and substantial feed traffic provided by ExpressJet. The base agreement covers flying by ExpressJet of a minimum of 205 regional jets in the first year and a minimum of 190 regional jets thereafter.

In addition, ExpressJet has the right to return to Continental 39 Embraer 50-seat regional jets that ExpressJet currently uses for non-Continental contract flying. Continental plans to add the returned aircraft to the new agreement and withdraw from the agreement up to 30 of its Embraer 37-seat regional jets currently flown by ExpressJet for Continental. Continental will then sublease or ground all of the withdrawn Embraer 37-seat regional jets to better align regional capacity with current market conditions. Additionally, the agreement reduces the rent Continental charges ExpressJet on 30 other regional jets that ExpressJet will retain for seven years to fly at its own revenue risk.

Continental and ExpressJet also entered into a settlement agreement and release of all the parties' claims relating to payments and rates under the original capacity purchase agreement, including all disputes previously disclosed as possible matters for arbitration."

----- This was done RIGHT around the time SkyWest tried to get XJT the first time... The 69 plane fleet reduction was already in full swing at this point and things didn't go the way CO had intended, XJT exercised their right to retain the aircraft (KNOWING it was going to be at a loss) as a chess move against the plan by CO at the time to bring in CHQ to have a whipsaw regional bidder (UA isn't in the picture back then)... CO also even went after XJT to give up our proprietary W&B program on the 145 to CHQ... we refused... this started a period of a massive Pi$$ing match between XJT and CO management... The purpose of branded and DL contracts were to prove points and simply minimize loss while denying CO the ability to use those aircraft against ourselves. In addition, The BIGGEST failure of CO in the chess move was they released the most expensive lease rate 145's without regard to which aircraft of the 274 they were... the 69 they released ended up being the newest nicest 145XR's and 145LR's... the sudden loss of the most capable 145 in the world (XR) crippled CO in ways they didn't foresee... no other RJ that could fly for CO at the time (50 seats or less) could do what the XR could with payload and range... so you saw the shut down of IAH-BOI, IAH-BFL, etc... Hence why when 2010 came around... bad blood was running strong between CO and XJT

CO had basically stated to XJT Management if you do NOT go through with our back door negotiated new deal (10 year CPA for less planes) with SKW to acquire you; we will not renew your 7 year CPA when it runs out (5 years away) and you will cease to exist. The final chess move.


So there ya go... the real original CPA (7 Year XJT negotiated with CO) and the sale to SKW 10 Year CPA for XJT/ASA acquisition from 2010... Despite what SKW always tried to say and how XJT was sinking them... reality is much different. SKW negotiated that 10 year loss making XJT contract from day one. It was NOT our CPA at all... so cue the shooting star "The More You Know"


I don't think there was any doubt the 10 year CPA was negotiated by SkyWest. I think they anticipated being able to drive costs down much further than they ultimately were able. Looking back through the history of it all, I was incorrect in the timing of the Delta CPA. That was signed in early 2007 and operated concurrently with the branded operation, not as a way to get out of branded flying.

Just to add a little more to the timeline, the offer from SKW to purchase XJT was made in early April 2008. The CPA was already done between SKW and CO and Continental's squeeze play was on at that point. Here's a link to the letter SkyWest CEO Jerry Atkin sent to XJT CEO Jim Ream and XJT Chairman of the Board Jim Bravante on April 7, 2008 with the offer to purchase the company.
http://www.sec.gov/Archives/edgar/data/ ... 08e992.htm

Here's the letter Continental CFO Jeff Misner sent to XJT on the same day, telling XJT to match the costs or lose 51 more airplanes, with the eventual end of the entire CPA at the end of 2012, and telling XJT they'd get notice of that loss on June 28th if a new CPA wasn't agreed to by that time.
http://www.sec.gov/Archives/edgar/data/ ... 08e993.htm


A lot of people actually don't realize that the CPA that XJT worked under post SKW/ASA/XJT merger was SKW, Inc negotiated...

Great add to the timeline with the SEC filing... and that was SKW/CO's original attempt to get XJT in 2008... but that one fell through as SKW couldn't figure out how to get around XJT pilot scope contract language.. which is why the June 5th, 2008 announcement of XJT/CO entering into the new 7 year long term CPA for XJT with the wind down of the branded ops and return of some of the fleet to CO flying (CO wanted the XR's back)... It wouldn't be till 2 years later that SKW/CO would back door deal yet again and finally succeed in the XJT takeover. That deal and the new long term 10 year SKW, Inc. / CO CPA for acquired XJT was in 2010.

Here's the SEC filings that show the abandonment of SKW, Inc XJT Acquisition in June/July 2008.
https://www.sec.gov/Archives/edgar/data ... 061108.htm
"Sonny, did we land? or were we shot down?"
 
amcnd
Posts: 153
Joined: Sun Mar 29, 2015 4:19 am

Re: SkyWest to sell ExpressJet

Thu Dec 20, 2018 2:16 pm

To sum it up this is good for both OO/XJT. OO’inc get out of its unprofitable side of the business (they tried for years, time to move on) and OO gets a guarantee on there UA flying, plus “first right” on 25 more dual class aircraft if UA puts out a RFP. And XJT gets out from under OO and maybe this ManaAir/KAir can change things around to bring back the E145’s profitable. From a XTJ pot standpoint they had 3 airlines they were flying for now down to 1. (Eggs all in one basket) but it should stabilize the bleeding of pilots there. (They have what 3500+ now down to 1200??. Real question is where does this leave the other CRJ700 operators.. Mesa/Gojet.. someone is loosing 25 aircraft.? (Do to scope)Time will tell.
 
fly4ever78
Posts: 63
Joined: Tue Mar 07, 2017 10:17 pm

Re: SkyWest to sell ExpressJet

Thu Dec 20, 2018 4:22 pm

burnsie28 wrote:

DL does they same thing they have 70 seat E75's and CR9's.


Delta does not operate any CR9's with only 70 seats.
 
amcnd
Posts: 153
Joined: Sun Mar 29, 2015 4:19 am

Re: SkyWest to sell ExpressJet

Thu Dec 20, 2018 4:32 pm

fly4ever78 wrote:
burnsie28 wrote:

DL does they same thing they have 70 seat E75's and CR9's.


Delta does not operate any CR9's with only 70 seats.


Yes they do. OO operates 4 currently with a total of 20 on order 900 “atmosphere”
 
fly4ever78
Posts: 63
Joined: Tue Mar 07, 2017 10:17 pm

Re: SkyWest to sell ExpressJet

Thu Dec 20, 2018 4:45 pm

amcnd wrote:
fly4ever78 wrote:
burnsie28 wrote:

DL does they same thing they have 70 seat E75's and CR9's.


Delta does not operate any CR9's with only 70 seats.


Yes they do. OO operates 4 currently with a total of 20 on order 900 “atmosphere”


Interesting, I stand corrected.

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