Great Lakes De-lists Stock

FloridaLarry said:
Great Lakes Aviation, parent company of Great Lakes Airlines, filed a Form 15 with the Securities & Exchange Commission to de-list its stock. They are eligible to do this since they have fewer than 300 registered stockholders. It will continue to trade its stock (presuming anyone wants to buy any) on the OTC Pink Market, but has no obligation to do so.

In an 8-K filing at the SEC, they say the Board decided to do this "...based on numerous factors, including the large costs of preparing and filing periodic reports with the SEC, the increased outside accounting, audit, legal and other costs and expenses associated with being a public company, the burdens placed on Company management to comply with reporting requirements, and the low trading volume in the Company’s common stock." They promise to put interim un-audited reports and an annual audited report, on their website.

The de-listing becomes effective 90 days from the date of filing, March 23, 2016. Until then, they are required to continue filing reports mandated by the SEC. GLA hasn't filed the quarterly report for 4th Qtr 2015, due to the SEC mid-February, nor have they filed the single-page notification that they will be late.

Going,...Going,....
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When the Nuclear Winter comes, only the cockroaches and GL will survive. ;)
What's GL's book value? Any chance of arbitraging the aircraft??
 
Crop Duster said:
... Any chance of arbitraging the aircraft??
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Not likely, Crop. GLA owns the aircraft (no longer leased) but their big loans are secured by the aircraft, and any sales revenue would go right back to their lenders.

Besides, the only viable markets for older B-1900-Ds are in third world countries, and they're pretty full up until one CFITs. (Domestic freight & package carriers use primarily 1900-Cs and Metroliners since boxes don't care about cabin headroom.) Alaska seems fully equipped. Also, not a lot of call for the Embraer Brasilias, plus the market is saturated since SkyWest stopped flying their Brasilias.

An arbitrageur could perhaps buy, but then what? Insure the dickens out of 'em and dump 'em over a cliff? Sounds like route-proving to the Graybar Hotel.
 
Crop Duster said:
What's GL's book value?
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I have their book value at about $25M as of their last filing in Nov 15. Given that accounting depreciation never reflects reality, I think asset value is more like $15M-$20M. They're burning $3M a quarter. At the start of the New Year, I assessed they had about 5-7 quarters left. Now they're down to 4-6. This all changes if they're granted the 121 waiver that they asked for. Will the FAA give them a waiver in time for them to substantially change the operation? I predict no and I think the date on GLA's tombstone will be Spring-Summer of 2017.
 
I know a guy on the inside at GLA. Right now, no shortage of FO applicants, what they need are captains. There will be an announcement soon about improved pay and a flow to try to attract applicants.
 
hook_dupin said:
I have their book value at about $25M as of their last filing in Nov 15. Given that accounting depreciation never reflects reality, I think asset value is more like $15M-$20M. They're burning $3M a quarter. At the start of the New Year, I assessed they had about 5-7 quarters left. Now they're down to 4-6. This all changes if they're granted the 121 waiver that they asked for. Will the FAA give them a waiver in time for them to substantially change the operation? I predict no and I think the date on GLA's tombstone will be Spring-Summer of 2017.
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The FAA has not approved any waivers that put lower-time people in the cockpit, and I agree with Chris that it is unlikely. The only thing that could change that is Congressional action, and Congress started this problem after Colgan Flight 3407, when they passed The Airline Safety and Federal Aviation Administrative Extension Act of 2010. Wholesale implosion of regional flying, predicted for this summer, will be less than the doomsayers predict and is unlikely to overcome the safety card with elected officials.

GLA seems intent on maintaining as much of their historic business model as they can afford to. However, they can't economize their way out of this problem. About the only thing they haven't tried is flying their 9 passengers around in the 1900-Ds with a single engine - a Caravan with drag and made on the other wide of Wichita. With their reduced schedule, getting their FOs enough time to become CAs, never mind retain existing or new CAs in the present hiring climate, will be tough.

Their present financial situation doesn't allow them to change the business model to one likely to succeed. As the song says: 'Whatcha gonna do when the well runs dry?' Hail Mary pass perhaps, but Mary's been benched.
 
FloridaLarry said:
The FAA has not approved any waivers that put lower-time people in the cockpit, and I agree with Chris that it is unlikely. The only thing that could change that is Congressional action, and Congress started this problem after Colgan Flight 3407, when they passed The Airline Safety and Federal Aviation Administrative Extension Act of 2010. Wholesale implosion of regional flying, predicted for this summer, will be less than the doomsayers predict .
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I would hardly say Congress caused this issue. 3407 pointed out a problem in regionals. The current economy is now correcting years of poor hiring by the majors, which allowed the regionals to get away with poor rules and pays. IMO there are qualified pilots able to fly for the regionals if the pay and rules were acceptable.
 
Bandit_Driver said:
I would hardly say Congress caused this issue. 3407 pointed out a problem in regionals. The current economy is now correcting years of poor hiring by the majors, which allowed the regionals to get away with poor rules and pays. IMO there are qualified pilots able to fly for the regionals if the pay and rules were acceptable.
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Both Bandit and I have picked on different parts of a system with flaws. Neither of us mentioned that mouthwash, Scope, which really started the outsourcing trend by the majors. It allowed smaller airlines & aircraft to move up from connecting very-low-traffic cities to hubs with larger planes. Manufacturers built ever-larger planes which were more efficient when full and traveling longer distances - true for both the regionals and the majors. Trunks didn't want to bother with the smaller, less-profitable lift, so they outsourced it, to the point that now, more than half the flights on any given day are flown by a 'Regional, even if they are 3 hours long and cross major geography. People will find opportunities! One of the more interesting trends right now is the beginnings of a reversal here by the majors.

3407 pointed out several problems, and Congress reacted to the public's outrage, something which happens in a democracy. [One could even say that the phenomenon of Mr. Trump is a reaction to the public's outrage(s)! ]. 3407's CA had 3374 hours, but only 111 as a Q-400 CA. He'd be legal under today's rules. The FO had 2244 hours, with 744 in type. She'd also be legal. He had a poor training history, and Colgan's training had some holes; Congress didn't do much about that, but the airlines have been doing a somewhat better job and the FAA is less likely to overlook problems. They broke the sterile cockpit rule. CVRs aren't new, but I'll bet most pilots think twice about that one, particularly in poor flying conditions. One of the easiest targets for Congress and the FAA was rest and duty time, and they made corrections. We'll never know exactly how much 3407's crew's tiredness contributed to lower situational awareness and slower reactions as the crisis developed but it's certainly a factor and an easy one to target. Like many governmental reactive situations, Washington may not have gotten it all right, and there are unintended consequences, but they accomplished something.

I'm not sure I follow Bandit's thesis of poor hiring by the majors, and thus poor rules and pay at the regionals. We'd all agree about the poor rules and pay, and that certainly had made it harder for them to hire enough flight crew. For all regionals over time, not just GLA. But I'd suggest that it is largely created by the fact that the regionals are in the middle economically, between the majors and their system of paying the regionals for lift, and a flying public that expects cheaper seats. It seems pretty unrelated to the increasing number of retirements at the majors, caused by time's winged chariot more than poor HR practices, leading directly to their need for new-hires from the Farm Clubs at the regionals.

You may not always get what you pay for, but it's a safer bet that you don't get what you don't pay for.
 
I don't understand flow from Great Mistakes either.

We have beaten the 3407 issues to death in other forums.

When the majors weren't hiring in great number the regionals could constantly underbid each other for flying and asked for concessions from their labor group. Whipsaw and alter ego's were common. Take the planes and concessions or we are going to give your flying to our other company. RAH did this as well as the owners of TSA and Gojet. When the economy started improving and the majors, corporate ,and other reputable carriers started hiring in number the qualified pilots at the regionals left for greener pastures.

The regional business model is broke. Pilots need more time than in the past to qualify which is pointing out the flaws in the regional model as well. The internet has also helped educate the noobs on the better carriers to start at.
 
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