CAL & XJT Relationship
11-02-2006, 01:45 PM
#21
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I don't think you guy's understand the charter industry. It's a totally different animal than airline ops. Unlike airline, charter's don't fly everyday, and have a fairly low utilization rate. This is why most jets for charter have an owner. The owner is responsible for the owning and operating costs of the aircraft. Charter companies will market these aircraft for a price and offer the owner a percentage of the rate charged. This in no way covers all the costs of the aircraft. So if your jets don't have charter customers everyday, their probably not turning a profit.
http://www.expressjet.com/corpAviation/index.htm
11-02-2006, 03:03 PM
#22
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Two items,
1) CAL still owns about 8% of XJT directly, CAL's retirement fund owns about 10%. Many of the mutual funds & institutional investors who have a signifigant position in XJT also have a signifigant position in CAL.
Therefore it is illogical that CAL cut XJT loose without some assurance that Ream, et al would find something usefull to do with those airplanes.
2) Just because XJT does have something worthwhile to do with those airplanes doesn't mean XJT pilots will have anything to do with it. I haven't heard anything recently about XJT Eurpoe, but if and when, you can bet that nobody on your seniority list will be doing any CDG-LHR flying.
So, nobody panic, XJT isn't going anywhere. But nobody celebrate, either XJT hasn't gauranteed anything either.
1) CAL still owns about 8% of XJT directly, CAL's retirement fund owns about 10%. Many of the mutual funds & institutional investors who have a signifigant position in XJT also have a signifigant position in CAL.
Therefore it is illogical that CAL cut XJT loose without some assurance that Ream, et al would find something usefull to do with those airplanes.
2) Just because XJT does have something worthwhile to do with those airplanes doesn't mean XJT pilots will have anything to do with it. I haven't heard anything recently about XJT Eurpoe, but if and when, you can bet that nobody on your seniority list will be doing any CDG-LHR flying.
So, nobody panic, XJT isn't going anywhere. But nobody celebrate, either XJT hasn't gauranteed anything either.
11-02-2006, 03:04 PM
#23
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[QUOTE=Sanchez;76088]the margin of losses on the 53 aircraft would have to exceed the margin of profit on the 206 aircraft (which by the way is guaranteed per our agreement) for XJT to see red on the books.
QUOTE]
I guess the part I find hard to believe about your argument is that the hypothetical margins of loss would be small enough to be covered. I realize XJT's contract with CAL is quite lucrative, but the type of operations, like charters and independant airline ops, that XJT is exploring are far from cash cows. We've all seen how a little mismanagement in an airline can be devastatingly expensive.
QUOTE]
I guess the part I find hard to believe about your argument is that the hypothetical margins of loss would be small enough to be covered. I realize XJT's contract with CAL is quite lucrative, but the type of operations, like charters and independant airline ops, that XJT is exploring are far from cash cows. We've all seen how a little mismanagement in an airline can be devastatingly expensive.
11-03-2006, 03:22 PM
#24
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You're assuming we're just wating for the phone to ring! We already have clients lined up for this operation. Here's the site for any of you who might be interested:
http://www.expressjet.com/corpAviation/index.htm
http://www.expressjet.com/corpAviation/index.htm
11-03-2006, 03:50 PM
#26
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My original topic being that without high utilization of aircraft, owners don't turn profits. They can only reduce the cost with the revenue gained.
11-03-2006, 08:03 PM
#27
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Yes, you are correct ziggy, but I think the company chose the amount of airplanes based on the demand that they had prior to making the announcement of going into the charter field. I do see your point though, and only time will tell.
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