News from Waco, TX today:
Waco, airport officials ponder commuter replacement for departing United
Full story: Waco Tribune-Herald
Waco will lose its commuter air service to Houston in early September, and officials are wondering whether to pursue a replacement or focus on getting more people to fly American Eagle to Dallas-Fort Worth International Airport.
datruth said "You are way too simplistic in your thinking. Frequency will continue in business markets, even the small business markets. There is no way to make a 3 times a day, 50 seat market into a one time a day 150 seat market. Impossible. The airline will lose share and lose the valuable connect revenue. You assume by your statement that traffic will shrink, not grow. How silly, to say fewer people will fly in the future than fly today."
I don't think I'm oversimplifying. Use TOL as an example. It is not a small market but has lost lots of service. The attitude is the pax can drive an hour to DTW, even the business pax. The serious business pax are on netjets now anyway.
The airlines are not a public utility and have decided it is time to try and make real, consistent profits regardless of the price of fuel. This attitude, combined with the price of fuel, the expense of running 50 seaters and the potential pilot shortage is reshaping the industry.
ashland retired said "Think People!!! SKYW to $5.50."
Oops, bad day to be short SKYW. You may be ashland unretired soon.
datruthdog said "You are both wrong. 50 seaters will be around. Just not 1000 of them. Maybe 500 or so. All markets that can't support 70s will not go away. That's just a really dumb thing to say."
I stand corrected. I really didn't mean to say every 50 will be gone tomorrow. Using your 1000 50s now, I'd guess 200 left in the US in 10 years. As contracts expire, the jets will go away.
As for smaller cities losing service, it is already happening. Add the upcoming "pilot shortage" and small cities are going to take a hit.
But fares will go up.
avi8 said "Regional jets have a limited place with $100 oil. Scope and sky-high fuel cost will assure their demise. This is the "death of the PC" in the aviation industry! More and more flying will shift bact to the majors....... And it's a good thing!
I agree...sort of. The RJ industry is changing and consolidating. The 50 seater is going away for sure, CRJ and ERJ. I don't know what is going to happen to American Eagle, but even if Skywest doesn't buy Eagle, I think they will get Eagle flying. I think the large turboprop is going to be a player and I'm surprised Skywest has no interest in the big turboprop.
There is a place in the industry for the RJ and I see 50s leaving and being replaced with 70/76 and reduced frequency. If a city can't support 2 or 3 70s a day, service will end.
You were a nut on the XJET board and you are a nut on this board. You can change your "handle" but it is the same nut behind it. You're still in love with the ERJ, thinking it will avoid the purge of 50 seat jets. Sorry, the ERJ is about 5 years newer than the CRJ, so its retirement may be delayed a few years, but it is on the way out.
I try very hard to focus on the future of Skywest and the regional industry. I try not to focus on the poster, but the post; however, you're an idiot.
Remember the CAL system had nothing bigger than 50 seats in jets. There is a huge amount of growth in the UAL system for 70 seat jets, unless the UAL TA has limits, which I do not know.
As for the -32 with Delta, count the seat miles, not as bad.
66 50 seat CRJs are leaving and 34 70/76 seat CRJs will be arriving. I wouldn't be surprised if the jets are from the Comair fleet.
As I have been saying, Skywest will be a winner in a consolidating industry that is going to be profitable in the future.
Published on ATWOnline (http://atwonline.com)
Home > SkyWest reaches deal with Delta to add 34 newer CRJs, retire 66 older CRJs
SkyWest reaches deal with Delta to add 34 newer CRJs, retire 66 older CRJs
Created 2012-08-02 09:09
By Aaron Karp 
CRJ900. Courtesy photo
SkyWest Inc., the parent of St. George, Utah-based SkyWest Airlines and Atlanta-based ExpressJet Airlines, said it has “reached an understanding” with Delta Air Lines (DL) enabling it to take delivery 34 Bombardier CRJ700s/900s while removing 66 older CRJ200s from its fleet.
SkyWest did not explain the origin of the five CRJ700s and 29 CRJ900s slated to join its fleet incrementally from this month to June 2013. The regional operator said it expects to incorporate the aircraft into existing agreements with DL, enabling it to operate them on Delta Connection-branded flights through 2022.
DL recently announced it is shutting down regional subsidiary Comair (ATW Daily News, July 27 ). It is possible that CRJ700s/900s operated by Comair make up some of the aircraft coming SkyWest’s way, though this has not been stated.
SkyWest said it “intends to remove the 66 CRJ200 aircraft from existing Delta Connection service between August 2012 and December 2015.” It noted that 41 are DL-financed aircraft that will be returned to the Atlanta-based mainline carrier. Another 25 are SkyWest-financed aircraft. It said it “is currently working on opportunities to mitigate the financial risk associated with removing those aircraft from Delta service.”
SkyWest last month signed an agreement in principle for 100 Mitsubishi Regional Jets (ATW Daily News, July 11 ).
kit3taylor said "Along with the 50 seat jets, what routes is skyw dropping ? Why ? Because only airwolf would assign a bigger jet to fly half empty on the same old routes."
easy answer, kit, it is all about "frequency." no cities need be dropped, well maybe a few marginal cities with one 50 seat jet a day, but a reduction in frequency from 9 flights a day to 6. Same number of seats, less flights and less fuel.
"airwolf reads like the case where "build it and they will come" does not apply."
What do you mean? The 50s are being grounded-fact. bigger jets are being ordered-fact.
"airwolf reads like the case where he happily displaces USA citizens from their jobs by importing other foreign aircraft and their foreign pilots - all of which are more expensive to purchase and operate than the affordable and familiar 50 seaters."
Again, I'd answer you if I understood your point. The 50 seater is not affordable, that is why it is going away. It has expensive mx due and is a fuel hog on a seat mile basis. As for foreign aircraft, all the rjs are foreign built from Canada to Brazil to Japan to Russia to China.
Well, I put it in print and was correct. Comair is shutting down on 29 Sep. The 50 seat jets will be grounded and the 70s and 76s flown by another airline.
Skywest is talking tough about continuing to fly the contractual 50 seat jets for Delta. I think getting the Comair big rjs will change Skywest's mind.
I still think SKYW is going to be a winner in the industry as it consolidates. There is going to be change in the regional industry, but it still provides a needed service.
I don't know when the stock will go up, but I think shorting it now would be very risky.
This is a big surprise. SKYW ordered 100 JRJs with up to 90 seats. They can't use 90 seats with Delta, so I'd guess SKYW thinks it will get some scope concessions with UAL or they will only carry 76 pax.
Stock is up strongly today. I guess it is being "manipulated up" now.
first, the stock didn't tank on the news. the vote results came out at 1000 and the stock was up nicely. yes, it faded at the end.
if the delta pilot contract failed to pass, there would have been no growth at skyw, only the slow retirement of 50 seat jets as leases expired. there was no room for growth of 76 seat jets at delta.
now the 50s will leave at an accelerated rate, but can be replaced by 76 seat jets-at a reduced rate.
the delta pilot contract also puts pressure on amr and ual pilots to allow bigger rjs, which can be flown by skyw.
the contract results also eliminates uncertainty which the market hates.
i still think consolidation is going to happen. i think amr wants to sell eagle asap, and skyw is a likely buyer. i think comair will shut down and the large rjs put out for bid. the comair pilots will pay the ultimate price for their strike- their jobs.
the rj business is important to the system and there are too many rj operators killing each other to win business.
so i have no idea where skyw stock will be next month, next year but i think they are positioned to be a survivor and winner in the industry. just like the majors that are now making money, once the rj operators shake out and consolidate, skyw will again be solidly profitable.
The Delta pilot contract passed this morning. This will have a meaningful effect on SKYW. Look for 50 seat jets to go and 76 seat jets to arrive.
I see SKYW flying bigger rjs for AMR, maybe even buying American Eagle. Time will tell.
SKYW will be moving up.
Here's my plan for skyw. AMR is chomping at the bit to operate bigger rjs. The AMR pilot scope is very restrictive now and will be changed as a result of Ch11. I could easily see skyw buying American Eagle with the promise of bigger rjs as the 50s are grounded.
I'm not happy with the price of the stock, but think the upside is greater than the downside now.
The next big event for SKYW will be the passage or failure of the Delta pilot contract. Will be announced at end of June. If it passes, and I think it will, many 50 seat jets will leave the SKYW fleet. They will be replaced by 76 seat rjs. Not on a 1 to 1 basis.
Comair is ready to be shut down and its 70 and 76 crjs farmed out to....maybe SKYW.
PNCL is chapter 11 and I certainly could see SKYW picking up the large rj business from PNCL. The 50s could be dumped in CH11.
There is a place for the regional carrier in the transportation network.
don't confuse a bad industry with bad management. skyw is not going to go ch11. ever heard the saying "throwing the baby out with the bathwater?" skyw is the best of a bad, yet important, industry. it is oversold. it will be a survivor and winner in the consolidating rj industry.
I think the new Delta pilot tentative agreement will pass and SKYW will lose 50s and get a lesser amount of 76 seat rjs. There is chaos in the UAL/CAL merger and if the pilots don't get their act together regional carriers may wind up flying bigger equipment for UAL. At AMR things aren't much better. AMR mgt wants to fly most narrow body jets at the regional level. If AMR mgt is successful in breaking pilot scope, SKYW could buy American Eagle(which AMR desperately wants to sell) with the promise of bigger jets.
I don't think SKYW goes chapter 11. I think they are a survivor and winner long term.
So if the delta pilots approve TA the 50s will go away fast, instead of go away slow. The 50s will be replaced by more 76 seat jets. It will be an overall loss of fleet size for the RJ industry. Delta will go from 600 plus to 450 max. The regional industry is going to consolidate soon. I think SKYW is a survivor. In the end the survivors will make money. Not happy with the stock price but there is lots of uncertainty in the industry.
The Delta pilot tentative agreement will be telling, details Monday at earliest. Delta needs relief on 50 seat RJs. Delta has contracts with airlines like SKYW to fly those airplanes. Delta wants to dump contracts for some 50 seat jets but can't. Delta would like to fly more 76 seat jets, but is up against Delta pilot contract limit. Delta wants to get more 76 seat jets at regionals and will try and convince Delta pilots new contract offer is worth it to reduce 50s and get 76s at regionals. Skywest and others will get more 76 seat jets and ground 50s for Delta. Dump 2-3 50 seat jets and get one 76 seat jet. IMO
I noticed in the Aug,2011 8K that 2 shareholder resolutions passed last summer. Good for the shareholders and good for the stock, which is up over 20% since the vote.
Hopefully the company will follow through with the will of the shareholders. Over 97% of shares voted were in favor of the resolutions. The standard to win was over 80% of the OUTSTANDING shares. With about 30 Million outstanding, the resolutions needed over 24 Million votes of the 25 Million that voted.
The resolutions were to "declassify the board," which means all directors face annual election and eliminating the silly 80% super majority rule to force a change in the board.
This is a huge victor for the shareholder.