SkyWest may seek merger with rival airline ExpressJet

We're at a time now where the growth of the regional airlines is now starting to slow. The only way for them to grow is to merge now.
 
They must consolidate. There are too many RJs out there flying not enough passengers. If CAL drops another 50 XJT airplanes, XJT must merge or die.

Period.
 
I'd think a SKW/XJT merger would be beneficial to both if any of the SWA rumors are true in regards to starting a regional operation...especially if XJT has some planes that are dropped by CO...

Just my .02
 
Pilot802 said:
I think AWAC should consider a merge with Skywest...although I think a lot of the pilots would be happy with it.
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Why do you feel this way? I think AWAC pilots would get royally screwed if SkyWest were to buy them. They'd get the lucrative US Air contract and hire their own 750 pilots to staff the flying - replacing the top heavy AWAC list with fresh new hires. Actually it sounds so good (from SkyWest's standpoint) I can actually see this happening.
 
50 seat jet flying is no longer profitable except in certain markets (very few). Fuel is killing the little jets. We're at the point now where the outsourced labor on the 50 jets has no direct cost benifit unless a larger aircraft can not be filled. At some companies mainline is taking back flying and others are parking 50 seaters.
 
jtrain609 said:
Anything is profitable if you charge enough for the product.

Keep that in mind at all times.
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It's more than just charging enough for the product. The consumer has to see the value in paying that amount. There is an amount where the travelling public will refuse to pay a high price to ride 2+ hours in cramped conditions with no amenities. The 50 seater has a place in fleet plans, unfortunately the nimrods running airlines aren't using them in that manner.
 
jtrain609 said:
Anything is profitable if you charge enough for the product.
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That's only true if there's enough demand. If you jack up prices to a much higher level in an attempt to break even, you risk depressing demand to the point of further harming your revenue. I certainly don't think the airlines have reached that point on fares yet, but I do wonder whether they can find a pricing point that will allow them to break even with 50-seat jets at these oil prices. Of course, many RJ routes have always been loss-leaders, but things are somewhat different with $100/bbl oil.
 
wheelsup said:
Why do you feel this way? I think AWAC pilots would get royally screwed if SkyWest were to buy them. They'd get the lucrative US Air contract and hire their own 750 pilots to staff the flying - replacing the top heavy AWAC list with fresh new hires. Actually it sounds so good (from SkyWest's standpoint) I can actually see this happening.
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Who cares? If it happens it happens---probably not going to happen. AWAC's owners are not getting out of this "lucrative" USAirways contract with 7.5 years to go. That'd be foolish. If SkyWest bought AWAC---we'd fly our planes, under our contract, just the way they handled the ASA deal (two seperate pilot groups/airlines/schedules/senority/etc.). The bonus---we might get a profit sharing check and a future! :)
 
Cptnchia said:
It's more than just charging enough for the product. The consumer has to see the value in paying that amount. There is an amount where the travelling public will refuse to pay a high price to ride 2+ hours in cramped conditions with no amenities. The 50 seater has a place in fleet plans, unfortunately the nimrods running airlines aren't using them in that manner.
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All incredibly true, but the point I was trying to make is summed up extremely well in your last sentence; "...the nimrods running airlines aren't using them in that manner."

50 seaters DO have a place, and CAN make money, it's just a matter of whether the airlines want to leverage their assets to the maximum possible extent, which it's obvious that they don't.
 
jtrain609 said:
50 seaters DO have a place, and CAN make money, it's just a matter of whether the airlines want to leverage their assets to the maximum possible extent, which it's obvious that they don't.
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Sorry to disagree here, train, but virtually all respected airline analysts agree that the 50 seat jet is dead. Horizon, for example, is hatching a long range plan to replace their RJs with Q400s. I also suspect there's an Ejet plot in the works as well.
 
It will be interesting to see what happens between XJet and SkyWest. Will XJet pilots admit that this is a possibility? I have yet to met one that this story is fact. I know both companies are good companies but historically speaking, it's not only the troubled companies (outside of aviation) that merge.
 
you can make money with any amount of seats in any airplane....you just have to crunch the numbers right. A perfect example: Skywest just announced new *low* fares on a Crescent City to Sacramento flight (on a brasilia)....this is one of the "at risk" routes that Skywest does where they pay for everything and set prices, etc. etc. The new low price??? $194 each way.........and guess what...even if the planes are flying around half full, they'll make money..........airline management needs to pull their heads out of their asses and start experimenting with higher fares that actually bring a profit...rather than trying to fill every seat and break even......

edit: to stay on topic, Skywest buying another regional is a good thing for Skywest and it's stock..which is exactly why I think it'll happen. Who it'll be is anyone's guess, but if Xjet's leaders take the advice and offer their company at a decent price, I don't think Uncle Jerry would have any problem with taking on the challenge......it's just one step closer to world domination....and it'll close up some gaps in flying for skywest (phx, iah, and jfk are the only mega hubs they haven't infiltrated, yet.)
 
launchpad said:
you can make money with any amount of seats in any airplane....you just have to crunch the numbers right. A perfect example: Skywest just announced new *low* fares on a Crescent City to Sacramento flight (on a brasilia)....this is one of the "at risk" routes that Skywest does where they pay for everything and set prices, etc. etc. The new low price??? $194 each way.........and guess what...even if the planes are flying around half full, they'll make money..........airline management needs to pull their heads out of their asses and start experimenting with higher fares that actually bring a profit...rather than trying to fill every seat and break even......
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Thats not always true though. The market determines the price of the ticket, not the airline. Air travel is seen as a comodity and the price concious consumer wont pay a premium for the product. If the price is too high, the customer will seek out other alternatives. If the price is too low it will attract too many customers and could be a loss for the airlines. The routes that do very well are the ones where there is little to no competition. In addition to that, routes that contribute beyond the one segment to the companies overall bottom line are even better. An example that I like to use is that an airline might loose money on MSP-DEN, but if that flight didnt exist DEN-SAN wouldnt make money either. Its a fine balance. To simply say "they need to raise fares" doesnt answer the how aspect. Trust me, everyone working on the top floor of the airlines administration building knows that fares need to go up. Actually raising them is another thing.
 
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