blastoff

While we are not CAL, CAL still acts as we are them. They have vigorously fought to maintain their "Most Favored Nation" clause with us, preventing us from larger CPA's with other carriers. They want us to cut flying yet remain almost exclusively a CAL carrier.

Ottopilot

Yea, but in a way they are. They own (lease) all 274 jets and they "created" Expressjet from nothing, so maybe they feel entitled? Who knows? It sucks anyway you look at it. I'm glad I left Express in time, but I worry about my friends there.

blastoff

I don't know if "created" is the right word. "Spun off" is probably the best description...but if this was their plan all along, what was the point of spinning off an "independent company." If they wanted to control what Expressjet does outside of CAL, they should have just kept COEX in-house.

meritflyer

I think it was nothing more than a personality clash. Ream started his own airline once Kellner gave him to finger. His decision will ultimately lead to either bankruptcy or ExpressJet being dismantled via SKYW.

jedinein

And Eagle is out for sale, though probably not many bids.

CAL and AMR have much in common. They make the regional suffer and take the losses, be it scheduling, cancellations, or low wages so the mainline won't have to.

CAL, AMR, UAL, and so on want their cake and to eat it to. All in fun, clean, bloody business as usual.

OKLATEX

The reason the ExpressJet was created was to pay off debt for CAL. Originally it was to pay for airport expansion/fleet expansion. As it was further divested, it was used to fund the retirements. The IPO, as far as I know and can remember, never reached what they thought. The stock for the most parts has always been below what they expected, but did give them some money. I think part of the problem was that it was after 911, which Ream admitted, it was horrible timing. But, I also think it never had a large value as it was then, a paper company. They owned nothing. Not a towbar. That may have changed since I have been gone, 3 years.

Granted they have done some incredible things with that company and has done much better than I ever thought it would be severed from CAL. I give Ream credit for that. Branded, while using the EMBs was not bright given what happend to Independence, at least they used the CPA to prop them up and try things. The Charter is great because they can pass the cost along. But, bottom line Ream came from Air Mike, Continental Micronesia, and got a division that was a mini CAL. That is why the airline runs well, and the CPA was a cash cow for them. That is why it made so much money.

I have mixed emotions about Ream. Express has done better than I ever thought it would, but he is also the guy that stood there in the hotel in CLE for me, and said, if you don't like or want to take part in this, your can leave, and that is fine. The name ExpressJet came because they forgot to name the company and realized that it needed a name and ExpressJet was already on the airplane from CAL's branding of the RJ.

ExpressJet, COEX to me, is a great place to work. I loved my time, 6.5 years. We had a good contract, and a great crew force, and a good product. A lot of that comes from being formed by CAL and sold by CAL.

CAL is doing what they need to do to stay competitive in the industry. CAL, in my opinion is the best US airline. And they started looking at alternatives very early on. CHQ but a bid in, and COEX laid off office folks and did some other cost cutting things in 03 or 04. It was Ream who led us all Jet, then not too long later they contracted with CommutAir to bring the 1900s back, while our 1900s were flying in Miami.

I wish all the luck to the COEX guys. If being part of Skywest is in the cards for them, I hope Ream leads them in such a way that as many Express people can keep working.

Nevets

Sure, he knew it had risk. But that risk and associated reward is what he thought he had to do to increase shareholder value. That is all I'm saying. Plus I'm sure that if the price of a barrel of oil was at $133, he would NOT have taken that risk especially considering that the Branded operation would be close to break even if the price of oil would have stayed the same as it was in June 2006. Like I said, hindsight is 20/20.

They are in a way because of the CPA CAL wrote before XJT was spun off. Because that CPA gives CAL all the cards. It requires XJT to have to renegotiate rates EVERY year, it requires XJT to get permission from CAL to acquire another airline or to be acquired by any other airline, it allows CAL to release 25% of the aircraft, it allows CAL to cancel the CPA with 12 months notice, it prohibits XJT from operating any of their aircraft in CAL hubs, it requires XJT to give CAL the terms and conditions of any other CPA XJT has with another partner if its more favorable or limit it to only 10 aircraft, it requires XJT to give preference to CAL operations over their own operations.

XJT has been under the thumb of CAL all along with all those clauses put into the CPA by CAL.

I don't think any of this would have happened if they would have come to an agreement before the whole release of the 69 aircraft. I think that JR was holding his ground on rates because he felt that was what was best for shareholder value. Shareholders want to see increased revenue and profits, not reduced. Maybe if JR knew that CAL would release 69 aircraft, he would have caved in on the rates instead. Of course, that is just my opinion.

OKLATEX

By the way, it was always the intention of Express to be its own airline,to do its own flying from day one. It was an option for them anyway. I sat and listened to that too in that hotel in CLE. All the CAL management guys were part of this deal. They all got shares of ExpressJet.

None of us know what CEOs do/think. We know how they impact our lives. I am on my 3rd airline. They have all are basically the same. I don't think they are going to wake up and think how they can screw us all, but they have a job to do, and their is a cost of making a choice. Sometimes we pay the price for their choice.

Nevets

XJT has had many assets for the last 3 years. XJT has over $550 million in assets.

Indy Air is not a fair comparison to the Branded operation. Two separate and distinct business models.

And a lot of the heart ache now is because of CAL and how they wrote that CPA before the spin off.

CAL is but a shadow of itself from when Bethune ran it. LK is in the middle of witting his book, "From First to Worst" if he keeps this up.

The problem with that is that now that XJT is its own airline, it cannot operate like one because of what CAL wrote in the CPA before XJT was spun off.

OKLATEX

As I mentioned before I am impressed what the company has done, and some of that stuff was started when I was there, but certainly has changed since I left.

It is and isn't. Independence had the foresight to acquire mainline airplanes that could spread out the operating costs. But bottom line, the 50 seat Jet is not a money maker. It didn't work for Independence, it didn't work for Ozark II/Great Plains. I know ExpressJet has done well in the west, and from what I understand, it is a good product. But that is not an airliner that makes money in a stand alone basis, unless you are doing charters as ExpressJet has proven.

If you are running CAL, wouldn't you put the restrictions on ExpressJet. That was smart business so they wouldn't have to compete against them.

I agree Kellner is no Gordo, but the industry is a mess currently. Kellner was brought in during the turn around to straighten out the finances/accounting of CAL. He was a banker. They taught him to be an airline guy. CAL is doing well for itself currently because they cut the fat 10 years ago. They did then what everyone did after 911. He maybe putting the screws to the company and the contractors, but this industry is a mess, and has been since 911, and with oil, it is only getting worse, for pax and cargo. My company is turning the screws. This is worse than it was after 911. Again, I would cut the guy some slack. They were smart enought not to merge with UAL when he said that he wouldn't be left out of the merger game. It really is a well run airline.

Ream mentioned day one that we maybe our own airline. The point I was trying to make is that ExpressJet/COEX was sold to pay debt off for CAL. Pure and simple. They set it up so they wouldn't have to compete against it. Smart business. I was also there in that CLE hotel when he told us that this was not a place to stay forever. I have to agree with Ottopilot on that. The truth is that ExpressJet is a contractor, and contractors lose contracts and have to compete with other contractors. That sucks because COEX/ExpressJet is a great company. But again, it was a division that was sold to accomplish something for its parent. It sucks, and again, the Express guys are a great group, and I really wish them all the best.