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Constellation Energy Partners, Ltd. Şti. Message Board

houstonbasedpilot 4 posts  |  Last Activity: Mar 3, 2016 9:02 PM Member since: May 29, 2009
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  • houstonbasedpilot houstonbasedpilot Mar 3, 2016 9:02 PM Flag

    Nobody likes listening to me... BUT,
    Why a merger with a major airline is DOA.

    1. Pilot Shortage - RJET does not have the pilots to staff the aircraft they have. If the majors need pilots then it is best to just hire them away from RJET. It is more economical. BK is a good excuse for a pilot NOT to seek employment with RJET. RJET will continue to lose pilots through attrition as they are hired away by the major airlines.
    2. Assets - RJET's main assets are the aircraft; 294 of them as of 09/2015. However, the majority are leased and the assets reflect capitalized leases offset by long term debt. In other words, there are no substantial assets to speak of. RJET is basically an operating shell.
    3. The Aircraft - 52 aircraft (18%) are either parked or abandoned; some owned, some leased. The majority of these (40) fall into the 44-50 seat class which are not in demand. The number of all aircraft in the 44-50 seat class is 81 (28%). The larger regional jets are 69-99 seat class aircraft and demand is falling for them. The majors would like to see regional jets with a capacity equal to the Embraer E195 and Bombardier CSeries used by their regional partners.
    4. Future Aircraft Fleet(s) - Boeing in their 2015-2034 outlook / forecast sees passenger jet aircraft in service increasing from 21,600 to 43,560 (a 102% increase) worldwide. However, regional jet aircraft would only go from 2,580 to 2,660 (3.1% increase) in this same 20 year forecast.
    5. Partner Contracts - It makes no sense for a major to buy RJET in that the value for RJET is their partner operating contracts. Why would anyone buy a contract with themselves?

  • houstonbasedpilot by houstonbasedpilot Mar 3, 2016 3:23 PM Flag

    1. Pilot Shortage - RJET does not have the pilots to staff the aircraft they have. If the majors need pilots then it is best to just hire them away from RJET. It is more economical. BK is a good excuse for a pilot NOT to seek employment with RJET. RJET will continue to lose pilots through attrition as they are hired away by the major airlines.
    2. Assets - RJET's main assets are the aircraft; 294 of them as of 09/2015. However, the majority are leased and the assets reflect capitalized leases offset by long term debt. In other words, there are no substantial assets to speak of. RJET is basically an operating shell.
    3. The Aircraft - 52 aircraft (18%) are either parked or abandoned; some owned, some leased. The majority of these (40) fall into the 44-50 seat class which are not in demand. The number of all aircraft in the 44-50 seat class is 81 (28%). The larger regional jets are 69-99 seat class aircraft and demand is falling for them. The majors would like to see regional jets with a capacity equal to the Embraer E195 and Bombardier CSeries used by their regional partners.
    4. Future Aircraft Fleet(s) - Boeing in their 2015-2034 outlook / forecast sees passenger jet aircraft in service increasing from 21,600 to 43,560 (a 102% increase) worldwide. However, regional jet aircraft would only go from 2,580 to 2,660 (3.1% increase) in this same 20 year forecast.
    5. Partner Contracts - It makes no sense for a major to buy RJET in that the value for RJET is their partner operating contracts. Why would anyone buy a contract with themselves?

  • houstonbasedpilot houstonbasedpilot Mar 3, 2016 2:58 PM Flag

    This story has NOTHING to do with a possible merger between UAL and RJET. It was written when UAL and CAL were considering merging.

    Sentiment: Sell

  • Reply to

    No bidding war by the majors for RJET

    by pa1702 Mar 1, 2016 6:00 AM
    houstonbasedpilot houstonbasedpilot Mar 2, 2016 11:57 AM Flag

    Agreed! Pilot Unions @ Majors plus SCOPE clause in their contracts nullifies any thought of a major airline buying RJET.

    Sentiment: Sell

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