LAFAYETTE, La.--(BUSINESS WIRE)--Jan. 18, 2005--Offshore Logistics, Inc. (NYSE
LG - News) announced today that its third quarter financial results will be lower than most analysts' estimates. For the three months ended December 31, 2004, based upon available information, the Company estimates that diluted earnings per share will be in the range of $0.45 to $0.51. In the comparable 2003 period, the Company earned $0.12.
A reduction in flight activity and higher costs in the Company's Gulf of Mexico operations are the primary reasons for lower than expected results. Flight hours in the Gulf of Mexico were 9% and 4% lower, respectively, from the September 2004 and December 2003 quarters. In addition, direct expenses and depreciation increased during the trailing twelve months due to higher personnel costs and the placement of new aircraft into service.
The Company also announced that in November 2004, management made its final contract proposal to the union representing the North American pilot work force. During December 2004, the membership voted and rejected the Company's proposal, and the union subsequently made a request to the National Mediation Board (NMB) to be released from negotiations. The Company has informed the NMB that it has no objection to the granting of a release to the union. The NMB is not obligated to grant a release and could require the parties to continue negotiating. However, if a release is granted, a thirty day cooling-off period will start, and at the end of this period, the Company and the union will be allowed to engage in self-help measures. The Company has taken steps to put contingency plans in place, including the use of contract pilots, should the union seek to engage in any self-help measures such as a strike or work stoppage. Under these circumstances, the Company believes it will be able to continue operations with limited interruptions until a new contract is entered into, however, there can be no assurance that the contingency plans will mitigate all potential service interruptions.
The Company believes the union is negotiating in bad faith and therefore, on January 13, 2005, filed a complaint in Federal district court seeking a declaratory judgment to this effect, and a permanent injunctive order compelling the union to cease its bad faith bargaining and to begin bargaining in good faith.
I am confused...the company says one place they have no objection to the union being granted a release from negotiation and turns around a while later and sues in federal court saying the union is not negotiating in good faith.
It seems to me....if you have a Federal Mediator involved...does that not connote overseeing a negotiation process with a view towards settling an issue or set of issues? If the company is acting in good faith and the union isn't...why would the company not demand the mediator to intervene and try to get the union to start bargaining in good faith? Sounds to me like a game is being played here or someone who eats lunch at the Blue Dog is having too many beers with his lunch.
Would not you want to negotiate and find a compromise if you were acting in good faith? Did not the union submit a company offer to the membership and it was voted down? The company in another SEC filing said the increase in Pilot's wages would not hinder the companies competitive posture in the Gulf of Mexico...that is publically available. Makes one wonder why they are being so hardnosed over this?
This is turning into a train wreck here. The company says it is going to hire contract pilots....where are they going to come from? Air Log, PHI, Tex-Air, Houston, the EMS operators are all advertising for pilots....the summer fire season is coming up...the summer Bush flying season is coming up...logging is going to pick up shortly....are they going to strip their overseas operations for pilots? They can't man the aircraft they have now without a lot of workover from the current crews.
Somehow....if a strike does occur...we will see more than "minor" disruptions in service for Air Log. Their stock price is already headed south.
I would think a reasonable compromise is still possible if both sides genuinely look for it. A whole lot of people stand to lose if a settlement isn't reached before a strike occurs.