User avatar
antoniemey
Posts: 1400
Joined: Mon Dec 26, 2005 5:38 pm

RE: Is ExpressJet Imploding From Within?

Thu Mar 13, 2014 5:55 pm

Take two companies performing poorly, who have totally different fleets and totally different operational guidelines, glue together. Voila, you have ExpressJet as it exists today.

ExpressJet is not imploding, it's been Frankensteined.
Make something Idiot-proof, and the Universe will make a more inept idiot.
 
Rdh3e
Posts: 3529
Joined: Wed Mar 30, 2011 2:09 pm

RE: Is ExpressJet Imploding From Within?

Thu Mar 13, 2014 6:15 pm

Quoting ThePinnacleKid (Reply 99):
ADDITIONALLY... SkyWest, Inc. negotiated a NEW contract with CO/UA for L-XJT FOR the purchase of XJT. The contract XJT does with UA is the one negotiated when OO purchased L-XE.... So yeah, that underperforming loss making contract.. that's OO's.

So according to you, OO negotiated an agreement on behalf of XE in 2009 (when XE signed with UA). That is incredible foresight considering OO didn't buy XE for a full year after XE started flying for UA....
 
ThePinnacleKid
Posts: 530
Joined: Wed Feb 23, 2005 9:47 am

RE: Is ExpressJet Imploding From Within?

Thu Mar 13, 2014 6:37 pm

Quoting RDH3E (Reply 101):
So according to you, OO negotiated an agreement on behalf of XE in 2009 (when XE signed with UA). That is incredible foresight considering OO didn't buy XE for a full year after XE started flying for UA....

RDH3E, what are you talking about?! SkyWest, INC aquired L-XJT in 2010.

http://centreforaviation.com/analysi...ed-us-regional-consolidation-32650

SkyWest, as part of it's agreement to aquire ExpressJet specifically renegotiated the CPA.. so the loss making CPA wasn't even that of ExpressJet's doing.. it's all SkyWest, Inc.

Go to the part: New CPA with Continental  

and by my reference to UA.. that was in regards to newUA... as in CO/UA merged entity.

[Edited 2014-03-13 11:41:55]
"Sonny, did we land? or were we shot down?"
 
 
Rdh3e
Posts: 3529
Joined: Wed Mar 30, 2011 2:09 pm

RE: Is ExpressJet Imploding From Within?

Thu Mar 13, 2014 7:03 pm

Quoting ThePinnacleKid (Reply 102):
RDH3E, what are you talking about?! SkyWest, INC aquired L-XJT in 2010.

That's exactly what I said.

I don't think you realize that the "renegotiation" OO did is because of a provision that exists in the contracts all Majors/Regionals have in their contracts.

In effect it says that in the event of a merger (in this case OO/EV) CO/UA have the right to reject without penalty any contracts in whole or in part currently in force. This effectively means that UA used the merger to leverage better terms out of OO under threat of rejecting their contracts which would have meant OO bought XE for no reason but to throw money away. It was not OO's choice.

And yes, your first post was very ambiguous, so when you said LOSS making contract, I assumed it was the UA contract, which is widely known to be very cheap in comparison to the CO contract which was one of the richest in the industry.

[Edited 2014-03-13 12:04:26]
 
durangomac
Posts: 410
Joined: Fri Dec 08, 2006 5:18 am

RE: Is ExpressJet Imploding From Within?

Thu Mar 13, 2014 7:29 pm

Quoting ThePinnacleKid (Reply 102):
SkyWest, as part of it's agreement to aquire ExpressJet specifically renegotiated the CPA.. so the loss making CPA wasn't even that of ExpressJet's doing.. it's all SkyWest, Inc.

Actually, SkyWest, Inc. was only able to slightly sweeten the contract that ExpressJet negotiated back in 2008 that was way below what SkyWest, Inc. had negotiated with CO and even further lower than their contract at the time with CO.
 
ThePinnacleKid
Posts: 530
Joined: Wed Feb 23, 2005 9:47 am

RE: Is ExpressJet Imploding From Within?

Thu Mar 13, 2014 11:14 pm

Quoting RDH3E (Reply 104):
It was not OO's choice.

It absolutely was SkyWest, Inc.'s choice... they didn't have to buy L-XJT. They further were the ones that negotiated the contract which was actually better than L-XJT's 7 year CPA... it solidified a place for OO/EV for long term viability with the now newUA. They in effect also got first right of refusal for 75 of the 206 L-XJT aircraft requirement to be up-gauged should there be relief in scope.

Further, SkyWest, Inc. colluded prior to the 2010 acquisition with Continental for ExpressJet... here was the proposal statement from the failed 2008 attempt:

http://inc.skywest.com/invest/invest...releases/2008/Apr/XJT_Proposal.pdf

even there they mention they had PRE-negotiated a new contract for the resultant SkyWest owned "ExpressJet"

here again:

http://seekingalpha.com/article/2192...-airlines-mimic-major-counterparts

[Edited 2014-03-13 16:24:32]
"Sonny, did we land? or were we shot down?"
 
User avatar
RyanairGuru
Posts: 7832
Joined: Wed Nov 01, 2006 3:59 am

RE: Is ExpressJet Imploding From Within?

Thu Mar 13, 2014 11:25 pm

Quoting ThePinnacleKid (Reply 106):
they didn't have to buy L-XJT

  

If Skywest Inc negotiated a CPA with CO prior to purchasing XJT then they knew exactly what terms they were buying XJT on. If they could not break even at those rates then they should have walked away. If they failed to do proper due-diligence,, and now complain that the merged EV is loss making, I have zero sympathy for them.
Worked Hard, Flew Right
 
tyler81190
Posts: 720
Joined: Fri Feb 13, 2009 10:28 am

RE: Is ExpressJet Imploding From Within?

Thu Mar 13, 2014 11:29 pm

Quoting RyanairGuru (Reply 107):
If Skywest Inc negotiated a CPA with CO prior to purchasing XJT then they knew exactly what terms they were buying XJT on. If they could not break even at those rates then they should have walked away. If they failed to do proper due-diligence,, and now complain that the merged EV is loss making, I have zero sympathy for them.

Agreed... It would be unfortunate if the EV situation were to bankrupt OO, but OO should have known.
 
ThePinnacleKid
Posts: 530
Joined: Wed Feb 23, 2005 9:47 am

RE: Is ExpressJet Imploding From Within?

Thu Mar 13, 2014 11:34 pm

http://quote.morningstar.com/stock-f...d=7454a90edc169e8459e61516ef263ccb


There is the SEC filings... go to Note B on Page 7...

the "Company" (SkyWest, Inc) negotiated the new CPA for ExpressJet and and Continental... so again, the only people to blame on the CPA with "newUA" is SkyWest, Inc...

SkyWest didn't inherit a failing company... they bought XJT knowing the books AND with the new CPA pre-negotiated and had to be agreed upon PRIOR to and necessary for their merger completion.


Just to make it easy on everyone.. here is the exact Filing text:

Note B — Merger and Related Matters

On August 3, 2010, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with ExpressJet Holdings, Inc. (“ExpressJet”) and Express Delaware Merger Co., a wholly-owned subsidiary of Atlantic Southeast (“Express Merger Co.”), pursuant to which Atlantic Southeast proposes to acquire ExpressJet. The Merger Agreement provides for the merger of Express Merger Co. and ExpressJet, with ExpressJet becoming a wholly-owned subsidiary of Atlantic Southeast (the “Merger”). If the Merger is completed as contemplated by the Merger Agreement, the ExpressJet stockholders will receive $6.75 in cash for each outstanding share of ExpressJet common stock, and the net acquisition price for all of the issued and outstanding shares of ExpressJet common stock (after giving effect to shares of ExpressJet common stock presently owned by Atlantic Southeast) would be approximately $133 million. In connection with the proposed transaction, the Company has negotiated the terms of an amended capacity purchase agreement between ExpressJet and Continental Airlines, Inc., which the Company anticipates will become effective if the Merger is completed. Completion of the Merger is subject to approval by ExpressJet’s stockholders, regulatory approvals and other customary closing conditions, and is currently expected to occur during the fourth quarter of 2010.

[Edited 2014-03-13 16:36:08]
"Sonny, did we land? or were we shot down?"
 
Rdh3e
Posts: 3529
Joined: Wed Mar 30, 2011 2:09 pm

RE: Is ExpressJet Imploding From Within?

Thu Mar 13, 2014 11:50 pm

Quoting ThePinnacleKid (Reply 106):
even there they mention they had PRE-negotiated a new contract for the resultant SkyWest owned "ExpressJet"

here again:

http://seekingalpha.com/article/2192...parts

I'm really sorry, but I have to stop taking you seriously, as should everyone else.

The "source" you just cited:

Regional Airlines Mimic Major Counterparts
by: Davide Pavone

ABOUT
Davide Pavone enjoys writing about the macroeconomic outlook and commercial aviation sector. Davide is presently STUDYING FINANCE AT THE UNDERGRADUATE LEVEL. [emphasis added]

But hey, that was 2010, so I'm sure he's graduated by now.... Give me a break.

Also, by saying they colluded you're making strong accusations, XE's rates were subject to a non-disclosure agreement, so there is no way CO told OO what XE was getting paid. You are probably also confusing "agreed on principal terms" with actually having come to an economic agreement, which surely they didn't.
 
ThePinnacleKid
Posts: 530
Joined: Wed Feb 23, 2005 9:47 am

RE: Is ExpressJet Imploding From Within?

Thu Mar 13, 2014 11:53 pm

RDH3E....

seriously? You have yet to provide a single fact to back your statements. I on the other hand have given you EIGHT different sources... including SkyWest, Inc.'s OWN financial statements with the SEC. I don't think my statements could be any further qualified.

I don't need or want you to take me seriously... the other people on this forum can judge for themselves... at least I give direct links to back my statements.
"Sonny, did we land? or were we shot down?"
 
ThePinnacleKid
Posts: 530
Joined: Wed Feb 23, 2005 9:47 am

RE: Is ExpressJet Imploding From Within?

Fri Mar 14, 2014 12:04 am

Quoting ThePinnacleKid (Reply 111):
Quoting RDH3E (Reply 110):
Also, by saying they colluded you're making strong accusations, XE's rates were subject to a non-disclosure agreement, so there is no way CO told OO what XE was getting paid. You are probably also confusing "agreed on principal terms" with actually having come to an economic agreement, which surely they didn't.

Well...

Collusion: is an agreement among firms or individuals to divide a market, set prices, limit production or limit opportunities.

I would say, that SkyWest, Inc. approaching Continental or vice versa.. and pre-negotiating a "new" ExpressJet CPA contingent upon SkyWest then acquiring ExpressJet (circa 2008) then turning around and making an offer to ExpressJet and dangling the new CPA in front of them does in fact seek to "limit production or opportunities." It sought to in effect force ExpressJet into a merger. They just didn't anticipate that ExpressJet would thwart the attempt and then negotiate their own new 7 year Continental CPA... it took SkyWest 2 more years to finally get ExpressJet... and at that... it was near double the original offer.
"Sonny, did we land? or were we shot down?"

Popular Searches On Airliners.net

Top Photos of Last:   24 Hours  •  48 Hours  •  7 Days  •  30 Days  •  180 Days  •  365 Days  •  All Time

Military Aircraft Every type from fighters to helicopters from air forces around the globe

Classic Airliners Props and jets from the good old days

Flight Decks Views from inside the cockpit

Aircraft Cabins Passenger cabin shots showing seat arrangements as well as cargo aircraft interior

Cargo Aircraft Pictures of great freighter aircraft

Government Aircraft Aircraft flying government officials

Helicopters Our large helicopter section. Both military and civil versions

Blimps / Airships Everything from the Goodyear blimp to the Zeppelin

Night Photos Beautiful shots taken while the sun is below the horizon

Accidents Accident, incident and crash related photos

Air to Air Photos taken by airborne photographers of airborne aircraft

Special Paint Schemes Aircraft painted in beautiful and original liveries

Airport Overviews Airport overviews from the air or ground

Tails and Winglets Tail and Winglet closeups with beautiful airline logos