by Brian Nelson | 10-16-06 |
You may not be familiar with Skywest or Expressjet , but there's a good chance you've traveled with one of these airlines. Operating small jets and turboprops from low-density markets, regional carriers paint their aircraft with the colors and logos of their code-share partners, while providing connecting traffic to major hubs. SkyWest, for example, flies out of Chicago as United Express and from Salt Lake City as The Delta Connection, while ExpressJet operates as Continental Express.
For the safe and efficient transfer of passengers, regional airlines receive a guaranteed revenue stream with a contractual profit margin and are reimbursed for many flying costs such as fuel, landing fees, and insurance. Regional carriers are only indirectly exposed to the variations in ticket prices, passenger loads and fuel prices that trouble legacy carriers. With deals like this, it's not surprising that regional airlines have been consistently profitable through the course of the commercial airline cycle. But should investors be taking notice?
(for the full article go to http://news.morningstar.com/article/....asp?id=175416)
October 17, 2006
ExpressJet, which operates regional air services for Continental Airlines, on Tuesday said it was starting a unit to charter planes to businesses and other private entities.
The new unit, called ExpressJet Corporate Aviation, will begin operations in December, aiming to operate 10 EMB-145XR aircraft by May.
ExpressJet plans to spend USD$5 million to USD$6 million to refit the planes with plusher seats and stairs, company spokeswoman Kristy Nicholas said.
Last May, ExpressJet said it had planned to retain 69 aircraft after Continental canceled a capacity purchase agreement.
The 10 planes that will be in the ExpressJet Corporate Aviation fleet come from the retained aircraft. ExpressJet will announce plans for the other 59 aircraft, when it reports third-quarter earnings on November 8, ExpressJet's Nicholas said.
In addition to a corporate shuttle, ExpressJet had been mulling options, including starting its own scheduled service and joining up with another carrier.
ExpressJet's new charter service plans to serve companies, aircraft brokers, sports teams, schools, and travel companies. The service will include 50 redesigned seats featuring XM Satellite Radio.
November 2, 2006
Delta Air Lines unit Comair on Thursday said it had asked a US bankruptcy court to allow it to impose wage cuts on its pilots, while it negotiated with their union to reach a deal out of court.
The regional airline, which filed for bankruptcy protection in September 2005 along with Delta, said it is now seeking USD$15.8 million in savings from its pilots, cut back from an earlier demand for USD$16.3 million.
It said it has talks planned with the union, the Air Line Pilots Association, over the next two weeks.
"Comair's strong preference is to achieve a consensual agreement outside the courtroom," it said in a statement.
The average pilot salary is USD$59,600 and its latest proposal would cut that by USD$6,400 on average, Comair said.
Comair has already reached tentative deals on savings with its flight attendants and mechanics union, but those agreements are contingent on it also reaching a deal with its pilots.
November 8, 2006 http://news.airwise.com/story/view/1162992254.html
ExpressJet, which provides regional service for Continental Airlines, posted a lower-than-expected net profit on Wednesday, hurt by higher expenses.
The feeder airline said net profit fell 11 percent to USD$22.7 million, from USD$25.5 million a year earlier.
Last May, ExpressJet said it would hold on to 69 regional jets after Continental canceled a capacity purchase agreement. That decision left the company searching for new business ventures for the planes.
ExpressJet said it would add five of those freed up aircraft to its Corporate Aviation business, bringing the fleet in that unit up to 15.
Operating revenue rose 8.8 percent to USD$428.6 million, helped by fuller planes. Load factor rose 1.5 points to 78.1 percent.
Operating margin fell to 8.1 percent from 9.6 percent. The company rebated USD$2.6 million back to Continental to meet its contractual operating margin of 10 percent.
It said it also incurred additional costs related to its diversification, back-office infrastructure and headquarters relocation.
Weasil:
There is a glaring, often willfully distorted gap in the pilot salary numbers quoted above, at least it is conveniently forgotten by most media hacks. I've known about one newspaper writer who is a pilot. He wrote for a newspaper and published a book about the horrible in-flight attack on the Fedex pilots years ago. Based upon his articles, there is a vast chasm between his understanding of aviation and that of many other newspaper journalists.
First of all, you might already or should realize that the US media often intentionally misrepresent pilot salaries in a fundamental way, at least in many cases.
They quote Captains' average salaries, often provided by mgmt. These figures often include per diem, spent quickly on short, airport 'meals', if they can be described as such.....a delectable, mushy, soggy (half-eaten with a refreshing, watery Pepsi after the long preflight c0ckpit flows and checklists are complete) dinner. Perhaps a Taco Bell burrito, or a small $7.00 sandwich. But the media says "average pilot salary", instead of describing monthly pay only for the pilot in the LEFT seat.
Do the media choose to forget the basic, well-known reality that half of the pilots, those who work in the right seats of these 30-69-seat jets, (often because of seniority {not related to qualifications and experience}),are not Captains, and their US monthly salaries-whether in a union contract or not-often 'allow' them to qualify to use government-issued food coupons, in order to feed a wife and/or baby at home? How about maybe $1900 US/month....BEFORE taxes?
This addresses nothing about the uncovered dental and medical expenses.
Is this portrayal not an accurate depiction of the shockingly typical, infamous situation here-in stark contrast to the figures quoted by the often woefully ignorant and uninformed media "professionals"?
Do the media choose to forget the basic, well-known reality that half of the pilots, those who work in the right seats of these 30-69-seat jets, (often because of seniority {not related to qualifications and experience}),are not Captains, and their US monthly salaries-whether in a union contract or not-often 'allow' them to qualify to use government-issued food coupons, in order to feed a wife and/or baby at home? How about maybe $1900 US/month....BEFORE taxes?
You are preaching to the Choir. That description above is me! I recently changed airlines in a bid to stop commuting and as a result and back making first year FO wages again. When we applied for a refinance on our house recently the lady on the phone sounded like she wanted to hang up on me when I told her how much I make - she said "but you're an airline pilot?".
What could I say.
November 28, 2006
Pilots, flight attendants and mechanics at Mesaba Airlines have ratified tentative agreements to reduce labor costs by about 15 percent, Mesaba Airlines Labor Coalition said.
The ratified union contracts and changes to wage and benefits for all non-contract employees, including management, will come into force on December 1.
Mesaba filed for Chapter 11 bankruptcy protection in October 2005, and has been squeezed by the bankruptcy of its larger partner, Northwest Airlines.
Mesaba Airlines' pilots joined the company's flight attendants and mechanics in announcing that their members have all ratified tentative agreements that reduce labor costs by approximately 15 percent.
"Management's insistence that all employees take 19.4 percent cuts in wages and benefits over six years was so drastic that our unions naturally came together to protect our members' interests," said Mesaba MEC chairman, Capt. Tom Wychor. "I'm proud that we were able to work so well together across employee lines, and I expect this collaboration to continue far into the future."
ALPA's agreement was passed by 68.35 percent of the 89.7 percent of eligible members voting. The flight attendants' agreement was passed by 81.9 percent of the 64 percent of eligible members voting. The mechanics' agreement was passed by 64.8 percent of the 82 percent of eligible members voting.
"We hope that the sacrifices we are making will allow our airline to exit bankruptcy," said AFA-CWA Mesaba Master Executive Council President Tim Evenson.
"While no worker wants to agree to wage reductions," said Nathan Winch, AMFA's Local 33 airline representative, "our members made the difficult decision to make sacrifices and help prevent this airline's liquidation. We hope that the company puts these savings to good use."
Last year, the Mesaba Labor Coalition was formed to fight against management's strategy to use the bankruptcy process to drastically alter employee wages and benefits. Mesaba originally attempted to impose cuts of 19.4 percent and health insurance increases of up to 66 percent. The leadership of all three unions knew that these cuts were not justified, and they also knew that their membership would not agree to them. Through their unity, the Coalition was extremely successful in mitigating the level of the cuts and in slowing Mesaba's litigation strategy by obtaining two victories from the courts.
With new consensual agreements slated to take effect Dec. 1, 2006, the Mesaba Labor Coalition expects that Mesaba will be able to successfully emerge from bankruptcy next year. "The company's bankruptcy has taken a huge toll on us all, and we've lost many of the people who built this company to other employers," Wychor said. "I hope that management recognizes all the employees' contributions and begins to treat them with greater respect and appreciation."
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