rickair7777

This forecast also says that oil will climb only as high as $104 by the year 2030...not sure if I buy that one.

These sorts of government forecasts are generally limited in that they are politically constrained to not deliver significant bad news and create potential problems for the political masters.

What you really want to look at with regard to 50-seaters is "tail risk"...if your leases end at about the same time as (or before) your feed contracts, then you can dumb the 50's and offer larger airplanes at contract renewal time.

But anybody who has numerous 50-seaters with lots of tail risk is in potential trouble...it would make the most sense for mainline to not renew, let such a regional liquidate, and then contract with another regional for larger airplanes. Better to start clean than deal with a company which has to financially carry the burden of a lot of parked airplanes.

eaglefly

Any members of a future management team that either have forgotton about MAG or never heard of them would have had had to have been living under a rock for the last 15 years...............possible, but not likely.

As for the risk of the 50-seat or less issue, that is indeed also a risk, especially if that major has no ties of possesion of that regional carrier. In the case of Eagle, AMR has found extensive value in owning Eagle and could have indeed sold it as was previously tried, but the strings that they attached (for a reason) insured the entities that owned it wouldn't really own it and the profit potential was far too insufficient for the hassle and thus every single suitor balked.

If AA is to survive in anything close to current form, it will NEED a strong and competitive feeder system and that means more 70 seat (and possibly above) aircraft. Eagle's 47 CRJ's will be insufficient for the future and one way or another will be increased. On the other hand, the larger RJ aircraft that MAG has can easily be obtained by other carriers that ARE offered MAG's current contracts when they expire as there are plenty of pilots and current 70-seaters available and if MAG is left without a dance partner (highly likely), then they'll likely be in no need of the larger RJ's they have now.

Most believe there is too much feeder capacity now as it is and a contraction and streamlining by majors in the future will likely result in LESS need for RJ's and not more. Add to that the likelyhood of mergers and that means even fewer and more streamlined regional feeder ops. If UAL and CAL merge, that would leave U in a bad spot as they are foundering and perhaps AA will work out another asset acquisition TWA style and that would be almost certain to leave the majority of U's current feeders gradually dissolved, otherwise U is destined to wither on the vine. Of all the regionals out there MAG is the least attractive of the bunch especially to the survivng legacies all of which they've alienated with the exceptions of AA and CAL and they've not been under any rocks for the last 15 years, that's for sure. DAL can't wait to dump them, UAL soon won't need them, AA has a looong and sharp memory (as well as plenty of other options) and U is a dying quail.

Not good overall and from an odds standpoint and IMO, a perilous long term future for MAG and again, even if they come out of the current BK solvent in theory. Given a choice between being a carrier with CURRENTLY a large number of 50-seaters and a smaller one with few 50-seaters but having bitten every single hand that fed them, I'd go with the former every time.

One can be fixed.................the other can't as it's too late.

Jinrai Butai

It seems the old saying is true. Pilots really are their own worst enemies.

eaglefly

That is a true statement, but in MAG's case it has little to do with pilots..........it's USUALLY strictly business.

In MAG's case however, there may be an element of emotion since MAG is costing other carriers a lot of time and money (right or wrong). The damage done by the management team and their strategies has consequences and if there was a shortage of feed providers or their assets, then it might be different, but looking at the future with consolidation all but certain, it will be easy to weed out those that have previously left a bad taste in the mouths of 2 of 3 likely surviving legacies.

It seems an eventuality that DAL, UAL and AA will be the survivng brand names with U either having certain assets absorbed by AA or left to wallow until collapse. I suppose Lady MAG could peddle her charms to smaller LCC's but most have little need for her services as their models are different. It's a sobering reality for MAG and any legal victory is likely to have a short honeymoon as this lady has banged too many dudes to have garnered any trust or respect especially from those who've already sampled her charms..................they've been left with a painful case of the clap that's been expensive to treat.

Most will try another streetcorner after the infection clears.

DashDriverYV

Winglet, I don't know where you find this stuff, but keep it coming.
Is this the section you are referring to.

The regional carrier passenger fleet is forecast to decrease by 113 aircraft in 2010 as carriers remove large
numbers of 50 seat and smaller regional jets. After 2010, the regional carrier fleet is expected to increase
by an average of 45 aircraft (1.6 percent) over the remaining years of the forecast period, totaling 3,401
aircraft in 2030. The number of regional jets (90 seats or fewer) at regional carriers is projected to grow
from 1,710 in 2009 to 2,441 in 2030, an average annual increase of 1.7 percent. All the growth in regional
jets over the forecast period occurs in the larger 70 and 90-seat aircraft. During the forecast period, all
regional jets of 50 or less seats are removed from the fleet, reflecting the relaxation of scope clauses. The
turboprop/piston fleet is expected to grow from 902 units in 2009 to 960 in 2030. Turboprop/piston aircraft
are expected to account for just 28.2 percent of the regional carrier passenger fleet in 2030, down from a

42.4 percent share in 2009.

DashDriverYV

Name Type of Payment Amount Paid (Feb 1 - Feb 28)
Ornstein,Jonathan G Wages / Expenses 42,115.36
Lotz,Michael J Wages / Expenses 32452.19
Gillman,Brian S Wages / Expenses 26,087.30
Foley,Paul F Wages / Expenses 13,461.60
James Swigart Wages / Expenses 13,988.84
Keith Kranzow Wages / Expenses 11,923.04

eaglefly

In about 5 years, I'd expect very few RJ's remaining that have under 50 passenger seats (less than 50 in the domestic fleet). This segment will continue to morph with the 70-seat RJ the smallest and any market that cannot support reasonable frequency with this aircraft to be abandoned. CAL scope will dissolve as it becomes part of UAL and AA scope will relax, but only to that similar to the competition. There will be far fewer regionals as some regionals are absorbed while others simply are pushed out of an already overcrowded segment.

Those operations with solid records and viable fleets have the highest likelyhood of survival. There will be a noticable shortage of chairs as the music slows down and the key to the future for regionals is to have a relationship with one of the "Big 3". I would think each of those 3 would have no more than 3 regional feeders leaving about 9 regionals (perhaps less) as survivors.

The only thing I wonder about 5 years from now, is what Boyd Group will do ?

As the 50 seat RJ market evaporates, they'll have little purpose left for existance. Perhaps they'll attack the aging fleet of skyhawks and cherokees for their economic unviability due to age and excessive maintenance.........................

eaglefly

They'll milk the cow until it flops over with a shriveled utter..........it's all they have left to do and they know it. They might as well, since I think they know that MAG has a bleak future.

140K/month for six "execs" (expenses only) who've run their company into a mud puddle............must have gone to Enron U............looks like modern day looting before the roof caves in to me.

SpiraMirabilis

Those are wages and expenses. Mostly wages I would assume.

DashDriverYV

The list continues, I didn't wan't to bore you with execs under 10K a month....