Mr Hat I see you are as enthusiastic as ever! Well now, lets take a little reality check on the 'JB vision' as you call it.
Skywest has agreed to a joint venture with DJ for 10 years where they shoulder all the commercial and financial risk in exchange for DJ sales and marketing support, including the Velocity FF program. There was no mention of any equity stake in Skywest by DJ in the joint press releases. No surprise there as DJ's balance sheet shows they have no real money to invest.
As I mentioned in the other Dunnunda forum recently, joint ventures such as these have been used by US majors for many years and due to immense cost pressures almost invariable have resulted in the regional partner going 'bust'. This is because not only does the regional have to cover it's own costs and make a profit it also has to pay a substantial royalty to the code-share partner for every passenger supplied through their reservation system. This aspect was briefly mentioned in the Skywest/Virgin press releases.
Occasionally after the 'train wreck' the code-sharing major partner has very cheaply bought the assets of the defunct regional partner and internalised the business. Could this be JB's ultimate aim for 3 to 4 years hence? Time will tell!
Since the announcements others have established that Skywest's pilot T. & C. 's are more generous than their future competitor's and that regardless of which manufacturer wins the order the new aeroplanes will have a sticker price of around USD $20 Million, not including simulator (a new 'sim' if the ATR and full market rate rental off QF if the Q-400) and let's not forget the substantial spares package that will be needed.
Skywest's current revenue base for last year was around 350,000 passengers and the leasing company supplying the 18 new turbo's (i.e under-righting $360,000,000 in leases and which is also chaired by the skywest Chairman) uses the existing Skywest Fokker 100 fleet as their asset backing. Last time I looked a used F100 was worth less that USD $1 Million.
Given that each new aircraft will need 5 to 6 crews (covering for holidays, sickness, etc), Skywest need to recruit 180 to 216 new pilots. If these pilots are to be 'poached' from existing operators, attractive pilot and engineer T. & C's need to be offered.
The yet to be announced 'new' aircraft will cost as much as the Qlink aircraft and both the ATR and Q-400 run P&W engines which are not known for their fuel efficiency at low flight levels.
The other elephant in the room is REX who last year carried 1.2 million passengers, have other impressive and diverisfied assets and because they own their entire operation have the lowest costs in the industry. Unless Skywest and Qlink for that matter, successfully targets REX pilots and engineers to 'poach' their technical staff and neutralise their operations, REX will be a formidable competitor.
Someone please tell me how JB will achieve his 'vision' of substantially reducing the cost of regional transport with such competitive realities.
There is no doubt this is going to be a 'blood bath' and the travelling public will be the only winner for a short time period.
Anyone see the ultimate outcome any differently?
The Oracle