VHDSJ

Interesting report on Bloomberg this morning;

https://www.bloomberg.com/news/artic...ine-expressjet

EngineOut

SkyWest purchased them to get a foot in the door at Continental. I really think they had NO IDEA that United was buying them.

rickair7777

It was one of a small handful of obvious industry merger/acquisition moves at the time. Didn't come as a big surprise to anyone.

Nevjets

Sure, consolidation was in the air. But don’t forget, before Continental swooped in, there was a deal for us Air and UAL to merge. So it wasn’t obvious that continental was going to merge with anyone anytime soon. And when UAL cal did merge, Skywest originally tried to buy xjt in 2008 before the first big merger, delta northwest.

The reason was twofold. To become an incumbent with Continental. BR said it’s easier to negotiate once you already have a cpa than it is to get a new one. And the other reason was to get rid of a big competitor. At the time, xjt had discussions with American (they hadn’t figured out the mechanics’ scope work around yet), talked to delta after they got rid of mesa’s 145 flying and ended up getting some of their flying in LAX, they had a new cpa with UAL, and was in the final stages of negotiating one with Us Air for flying in phx, which Skywest put a squash on when the purchase was announced.


It’s just a very conservative guess when taking other recent pilot groups who unionized, like JetBlue and virgin America. It can very well be less than that, especially if there is a good working relationship with management as Skywest seems to have. How long do you think it would take?

trip

I'm guessing it would take less time then the five year 1% stinker deal we have now.

Nevjets

That was my point of it being good timing. You’re going to wait more time to get to the end of the current deal than it would take to negotiate a real contract.

DirkDiggler

That is incorrect. ExpressJet Airlines, Inc. is a separate corporation with shares that are privately held by SkyWest Inc. Same goes for SkyWest Airlines, Inc. Another corporation held by SkyWest Inc. They can sell off an equity stake in ExpressJet without having to purchase a stake in SkyWest Inc or SkyWest Airlines Inc.

rickair7777

VX would have taken longer with VX management... conventional wisdom is a lot longer, but AS (and the pilots) wanted to move the merger right along rather than risk a L-USA catastrophe.

WesternSkies

It is very abnormal for subsidiaries of public companies to be considered privately held.
If you can bring something to the table I’m ready to learn something about
Skyw.
Otherwise selling a portion of xjet to ual would dilute current shareholders. (Not happening)
Ual could buy a share in exjet if it is spun off from the SKYW ticker and current skyw shareholders given an equity stake.
Or divesting would be an option for UAL. BUT if they don’t want to own a majority they would need someone else to buy 51%. (Probably Commutair).

Any examples of what you speak?

rickair7777

A public company has shares on the open market. A private company still has shares/ownership, which may be owned by one or more private parties. Said private parties can generally make deals on their own, unless it's illegal or it's large enough to get the attention of the trustbusters at DOJ.

Inc can sell off a worn-out timed out CRJ 200 if it wants to. The BOD (elected by shareholders) provides oversight on behalf of shareholders.

Inc can also sell off other assets, such as part or all of XJT. Shareholders shouldn't be diluted, the value of their stock simply shifts from equity in XJT to cash (which can be retained, used for growth/aquisition/expenses, or distributed to shareholders). The BOD should provide oversight to ensure the shareholders didn't get a bad deal. Not all shareholders may agree on any particular transaction. If enough of them are unhappy, they can replace member(s) of the BOD to try to get what they want.