ASA's so called DCI contract
08-26-2008, 12:56 PM
#11
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Now here’s a question for those who might know. Is ASA counted independently or does SKW departures in ATL count when it comes to that 80% (same Co.)? I can’t remember if the contract specifies ASA or SKW Inc. I'm not meaning anything buy it, I feel ATL should be ASA and SLC......SKW. And I live in ATL.
I'm also more concerned about what performance #s we're tied to. If ASA screws up, Delta can terminate both SKW and ASA, and vice versa.
08-26-2008, 01:11 PM
#12
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Trouble is, I can't find 80% in SEC filings or any other public document. I hear that number consistently, but haven't yet found the legal reference.
I'm also more concerned about what performance #s we're tied to. If ASA screws up, Delta can terminate both SKW and ASA, and vice versa.
I'm also more concerned about what performance #s we're tied to. If ASA screws up, Delta can terminate both SKW and ASA, and vice versa.
Bottom line, SKW Inc. is just too large for DAL to replace plus our a/c are our a/c (expect 12(?) CR7's, 4 at SKW and 8 at ASA), not DAL’s so they just can't simply pull an XJT/CAL or F8/Comair/DAL on us. There’s just too much money riding on it as well as too many operational problems that will occur if DAL renigs on Inc., so I wouldn't worry about ASA until our contract is almost up in 2020. But anything can happen.
Last edited by JetJock16; 08-26-2008 at 01:17 PM.
08-27-2008, 04:53 AM
#13
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Here we go - from the 2005 10K found in the March 2006 SEC filings:
So ASA is guaranteed an overall percentage of DCI flying but still nothing specific (20-25% maybe?) and not necessarily 80% out of ATL. Anyone know where the 80% number comes from (or did someone just pull it out of their arse?)
In connection with the ASA acquisition, we have established new, separate, but substantially similar, long-term fixed-fee Delta Connection Agreements with Delta for both SkyWest Airlines and ASA. We also obtained control of 26 gates in the Hartsfield-Jackson International Airport located in Atlanta, from which we currently provide service to Delta. Delta has committed to provide to us opportunities to utilize 28 additional regional jets in our fleet by the end of 2007. Delta has also agreed that, starting in 2008, ASA is guaranteed to maintain its percentage of total Delta Connection flights that it has in 2007, so long as its bid for additional regional flying is competitive with other regional carriers.
Potential Opportunities from Delta’s Restructuring. We believe that as Delta restructures its fleet under bankruptcy protection, there may be new regional flying contracts that become available for qualified regional carriers. ASA holds certain rights to maintain its proportion of overall Delta regional flights, as well as its proportion of Atlanta regional flights. This may help ASA compete for new flying mandates, if any, that come into existence at Delta.
SA uses 26 gates at the Hartsfield-Jackson Atlanta International Airport: 13 gates are leased directly from the airport authority, six gates are subleased from US Air, five gates are subleased from Delta and two gates are used pursuant to a month-to-month arrangement. ASA intends to lease from Delta three additional gates effective December 1, 2005.
08-27-2008, 09:26 AM
#15
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The SKYW DCI agreement is a public document available as an attachment to the SKYW 8-K form filed on 9/13/2005. There is an 80% clause. There is also a clause specifying a minimum daily aircraft utilization. If the daily block hours fall below that minimum for several consecutive months (which they recently have), the base hourly rate payable to SKYW increases for every block hour flown.
08-27-2008, 09:30 AM
#16
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Here's a clause from the agreement:
B. If Delta is concerned about ASA’s performance in connection with any of the performance standards set forth in Section 10(A), Operator agrees to discuss with Delta such performance and potential ways to improve such performance at Delta’s request. The parties shall have ten (10) days to determine appropriate solutions and/or a corrective action plan, and ASA agrees to diligently comply with the terms and conditions of any such solutions and corrective action plans.
B. If Delta is concerned about ASA’s performance in connection with any of the performance standards set forth in Section 10(A), Operator agrees to discuss with Delta such performance and potential ways to improve such performance at Delta’s request. The parties shall have ten (10) days to determine appropriate solutions and/or a corrective action plan, and ASA agrees to diligently comply with the terms and conditions of any such solutions and corrective action plans.
08-27-2008, 10:15 AM
#17
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08-27-2008, 10:26 AM
#18
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ASA fails to maintain a completion rate of [***] with respect to the Delta Connection Flights during any [***] months during any consecutive [***] month period, unless Delta fails to maintain a completion rate of [***] with respect to its domestic mainline operations during the same [***] months as ASA’s failures during the same [***] period. For purposes of this Agreement, (a) Delta Connection Flights operated with no revenue passengers or completed over [***] hours late shall be considered as not completed and (b) Disproportionate ATL Cancellations shall be excluded from ASA’s completion rate calculation;
i) ASA shall be scheduled to operate not less than [***] of all Delta Connection Program departures scheduled at Hartsfield-Jackson Atlanta International Airport (“Hartsfield”) and (ii) [***] ((i) and (ii) above, collectively, the “ATL Departure Percentages.”)
