What's the Latest at ASA/Expressjet?
#6861
Gets Weekends Off
Joined APC: Dec 2007
Posts: 314
SkyWest is done with all the engine overhauls on the CRJ200s. So why is the company investing another $20M for CRJ200 engines? My only guess is that they intend to grab some out of the desert and put them back in service. Whether or not they are related to the Delta draw-down is complete conjecture.
#6862
EXACTLY!! Bankruptcy is announced upon filing. No business says, "we might be getting bankrupt. Pilots that think they understand business again.
#6863
Banned
Joined APC: Dec 2007
Position: EMB 145 CPT
Posts: 2,934
What's the Latest at ASA/Expressjet?
Yes, and they said they have done their due diligence on this. And there are restructuring people in ATL as well. We went through this once before at xjt. They bring in a hired gun to restructure the company outside bankruptcy. In bankruptcy, management loses a lot of control. Nothing is a slam dunk case. Each stakeholder (vendors, lease holders, unions, etc) are vying for a piece of the Inc pie. The restructuring plan needs to be approved by the creditor'a committee and the judge. It's not solely up to Inc in what the restructuring plan is going to be. American Airlines (and even PNCL) are perfect examples of restructuring plans gone awry. AA ended up being forced into a merger with Airways and PNCL ended up being owned by DAL. This is a huge risk to take when your whole point of bankruptcy protection is to cut costs while having a perfectly viable entity into which to merge into.
Trust me, especially Inc, does NOT want to hand over ANY decisions over to a third party who does not solely have Inc's best interest. Which, coincidentally, is the same reason why they bought xjt when they did rather than to wait and possibly have to deal with a judge and creditors committee.
To me, this was made pretty clear on the call. And it makes sense. They are already restructuring by parking the money losing airplanes. And that's the biggest issue here, not all those costs. The costs are really not that out of line. It's the revenue side from crappy CPAs management signed off on.
Here is what CC said on the call:
"I think we've been very clear that the primary challenge at ExpressJet is not necessarily the cost side. Although there are those issues, but the contract side with some of our major partners, and that's what we're focused on today."
https://www.marketwatch.com/story/sk...ear-2014-08-06
"SkyWest Inc. expects to suffer a full-year loss, though a senior executive said Wednesday that it isn't considering a bankruptcy filing for the ExpressJet unit that has dogged the largest U.S. regional airline's performance for three years."
Last edited by Nevets; 08-07-2014 at 05:38 PM. Reason: additional comments
#6864
Gets Weekends Off
Joined APC: Sep 2010
Posts: 2,648
Yes, and they said they have done their due diligence on this. And there are restructuring people in ATL as well. We went through this once before at xjt. They bring in a hired gun to restructure the company outside bankruptcy. In bankruptcy, management loses a lot of control. Nothing is a slam dunk case. Each stakeholder (vendors, lease holders, unions, etc) are vying for a piece of the Inc pie. The restructuring plan needs to be approved by the creditor'a committee and the judge. It's not solely up to Inc in what the restructuring plan is going to be. American Airlines (and even PNCL) are perfect examples of restructuring plans gone awry. AA ended up being forced into a merger with Airways and PNCL ended up being owned by DAL. This is a huge risk to take when your whole point of bankruptcy protection is to cut costs while having a perfectly viable entity into which to merge into.
Trust me, especially Inc, does NOT want to hand over ANY decisions over to a third party who does not solely have Inc's best interest. Which, coincidentally, is the same reason why they bought xjt when they did rather than to wait and possibly have to deal with a judge and creditors committee.
To me, this was made pretty clear on the call. And it makes sense. They are already restructuring by parking the money losing airplanes. And that's the biggest issue here, not all those costs. The costs are really not that out of line. It's the revenue side from crappy CPAs management signed off on.[
https://www.marketwatch.com/story/sk...ear-2014-08-06
"SkyWest Inc. expects to suffer a full-year loss, though a senior executive said Wednesday that it isn't considering a bankruptcy filing for the ExpressJet unit that has dogged the largest U.S. regional airline's performance for three years."
Trust me, especially Inc, does NOT want to hand over ANY decisions over to a third party who does not solely have Inc's best interest. Which, coincidentally, is the same reason why they bought xjt when they did rather than to wait and possibly have to deal with a judge and creditors committee.
To me, this was made pretty clear on the call. And it makes sense. They are already restructuring by parking the money losing airplanes. And that's the biggest issue here, not all those costs. The costs are really not that out of line. It's the revenue side from crappy CPAs management signed off on.[
https://www.marketwatch.com/story/sk...ear-2014-08-06
"SkyWest Inc. expects to suffer a full-year loss, though a senior executive said Wednesday that it isn't considering a bankruptcy filing for the ExpressJet unit that has dogged the largest U.S. regional airline's performance for three years."
#6865
Banned
Joined APC: Dec 2007
Position: EMB 145 CPT
Posts: 2,934
Lmao, Pinnacle's restructuring plan gone awry??? That thing was executed perfectly by Delta. And it all started when they sold, gave Pinnacle Mesaba. American Airlines situation is more like Skywest Inc. Both have or had a surplus of cash at the time of reorganization. And your wrong about Skywest having less control during a bankruptcy process. Bankruptcy gives them the ability to do almost whatever they want. Reorganizing out side of bankruptcy is more tricky as they are still tied to all existing contracts. I suppose Skywest Inc. could go that route. In any case, I would think it'll become obvious after the summer schedule winds down. I wish you all the best of luck
DAL was forced to buy PNCL or otherwise face the possibility of that bankruptcy turn to chapter 7. That's a risk they were not willing to take. Remember they waited to the very last minute to agree to be the DIP hoping someone else would step up. No one did so they were forced to do it.
And in bankruptcy, the laws are there to protect the creditors first, the owners last. That's why the shareholders usually lose all the value in their stock (ownership). Any creditor can oppose the restructuring plan. The judge rules in what he sees is in the best interest of the creditors and within the scope of bankruptcy laws. The judge decides if contracts can be cancelled or modified if it's in the creditors best interest, again within the confines of bankruptcy laws. Management has to make their case to the judge against those whose are party of any of those contracts or the creditors themselves. Management doesn't just get to do what they want. But when restructuring outside bankruptcy, they don't have a judge they are required to plea their case to and they don't have to worry about any possible vetoes to their restructuring plan. And lastly, it's way more cost efficient to do it that way instead of dealing with the costs to litigate a bankruptcy case. Not to mention the probable harm it would do to the holding company and the stock. Right now, it doesn't seem to be in the best interest of the shareholders. But that's right now only.
Either way, I don't hold my breath for any favorable outcome regardless of bankruptcy.
#6867
Listen to the call. It was alluded that it may harm the holding company. Also, the benefit of bankruptcy protection would be the renegotiation of labor costs. But they admitted that the financial problems with xjt are with the CPAs, not really labor costs. In other words, it's a revenue problem more than anything else. Which is why, other than parking unprofitable aircraft, they are concentrating on operational incentives. They actually lose leverage of trying to renegotiate CPAs in bankruptcy because of the boiler plate bankruptcy clauses in the CPAs.
#6868
Gets Weekends Off
Joined APC: Dec 2007
Posts: 314
You guys really crack me up on here. Really...... When you go down with a few airlines, then you'll get the big picture.
Don't get caught holding the bag! That's all I'm trying to tell you guys..... I hope everyone sold at the 15 to 16 dollar area...... and not STILL holding the bag...
Don't get caught holding the bag! That's all I'm trying to tell you guys..... I hope everyone sold at the 15 to 16 dollar area...... and not STILL holding the bag...
#6869
Gets Weekends Off
Joined APC: Oct 2009
Posts: 3,108
You guys really crack me up on here. Really...... When you go down with a few airlines, then you'll get the big picture.
Don't get caught holding the bag! That's all I'm trying to tell you guys..... I hope everyone sold at the 15 to 16 dollar area...... and not STILL holding the bag...
Don't get caught holding the bag! That's all I'm trying to tell you guys..... I hope everyone sold at the 15 to 16 dollar area...... and not STILL holding the bag...
#6870
Banned
Joined APC: Dec 2007
Position: EMB 145 CPT
Posts: 2,934
What's the Latest at ASA/Expressjet?
There you go again acting as if you know what you are talking about.
Let me ask you one question, how many syllables are in the call sign Acey?
You guys really crack me up on here. Really...... When you go down with a few airlines, then you'll get the big picture.
Don't get caught holding the bag! That's all I'm trying to tell you guys..... I hope everyone sold at the 15 to 16 dollar area...... and not STILL holding the bag...
Don't get caught holding the bag! That's all I'm trying to tell you guys..... I hope everyone sold at the 15 to 16 dollar area...... and not STILL holding the bag...
Not as big of a problem to go down with your airline if you have a plan b. I wish everyone had one so they can make decisions without fear.
Last edited by Nevets; 08-08-2014 at 08:57 AM. Reason: additonal comments
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