CAL reports $100+ mil savings by choosing Chautauqua

[wheelsup]

http://news.morningstar.com/article/....asp?id=175416

Furthermore, Continental recently achieved more than $100 million in annual cost savings by choosing Chautauqua to replace capacity previously operated by ExpressJet.

That's a pretty good chunk of change for only 69 airplanes. In the past I had heard that Expressjet had some of the lowest costs, and that CAL just wanted to diversify.

[Alchemy]

We'll see if they actually save that much when it unfolds. Considering Republic is reportedly going to do the CAL flying for a bout a 2% profit margin whereas XJET's was guaranteed 10% it wouldn't be all that far fetched. I don't think the crux of the argument is about operating costs as much is it is about the profit margin each carrier is willing to operate with. So XJET at 10% vs. RJET at 2% may = 100 mil, yes. However, XJET was willing to back off that 10% number (down to 4% from what I understand, more than that would require altering the labor contracts), it just wouldn't go as low as RJET.....in reality I'd be surprised if they save 50 mil when it all plays out. I doubt that XJET at 4% (or whatever # they wanted to back down to) vs RJET at 2% = 100 mil.

Perhaps the topic should read "CAL thinks they can save 100 mil". From what I hear, CHQ is tacking on quite a few "additional fees" that were not part of the oriingal negotiations, some of that stemming from the costs they are incurring by having to start a CL-65 program.
If it works out well (for Republic and Continental), I'm sure you'll see Continental cut another 25% of XJET's flying beginning in 2009.

Bottom line is Republic probably undercut XJET at all costs just to get their foot in the door at Continental. XJET was only willing to go so far before they felt it was more profitable to "seek other opportunities". Hopefully the are correct in that feeling.

Then again, I'm just a lowly pilot, what do I know.

[wheelsup]

Originally Posted by Alchemy

We'll see if they actually save that much when it unfolds. Considering Republic is reportedly going to do the CAL flying for a bout a 2% profit margin whereas XJET's was guaranteed 10% it wouldn't be all that far fetched.

<snip>

XJET was willing to back off that 10% number (down to 4% from what I hear, more than that would require altering the labor contracts), it just wouldn't go as low as RJET.....in reality I'd be surprised if they save 50 mil when it all plays out.

That article that I linked to was actually about the situation you described. Regional carriers are increasing taking a reduced margin of profit in order to remain competitive.

I've got T-Minus 10 months to go in my self-imposed two year limit at the regionals. Not sure what I'm gonna do next, but with crap like this happening we don't stand a chance to make it long-term here.

I think the guys sacrificing their QOL have it right - do a little time now before the crap really hits the fan and get into the 'mainline' carrier. I'm enjoying my QOL and $$ but I don't want to end up a 4 year SIC, at the bottom of 2 or more carriers lists due to all the paint swapping.

[Alchemy]

Absolutely, get out as soon as you can man! If you can get out at 2 years in today's industry I guess you're one of the lucky ones

[wheelsup]

Originally Posted by Alchemy

Absolutely, get out as soon as you can man! If you can get out at 2 years in today's industry I guess you're one of the lucky ones

I'm just talking about leaving, still as an SIC. Not upgrading, getting the time, and then leaving.

[Alchemy]

Hey, nothing wrong with that. I'm actually pretty happy with my job so I'm not actively looking for a change but then again I have limited options. (how much does 2000 rj SIC really count for?)

Air Wisconsin seems like a pretty decent place, industry-leading payscales and 2 year upgrades....doesn't seem all that bad. Where are you thinking of leaving for? Cathay?

[wheelsup]

Originally Posted by Alchemy

Air Wisconsin seems like a pretty decent place, industry-leading payscales and 2 year upgrades....doesn't seem all that bad. Where are you thinking of leaving for? Cathay?

AWAC is a good gig, good $$ and good company. 2 year upgrade? Yikes! Maybe more like 3 right now, the lowest it got in recent times was around 2.5 years. The problem is they hired a LOT of boys and girls in that three year time frame, so it'll start to strech out again. My guess is for folks hired now at least 4-5 years. We won't be seeing any growth here IMO. US Air contract only has 8.5 years left on it, after that, I think we will follow in your footsteps with CAL.

The problem is I can't keep moving my significant other around. She's finally found a job she's happy with and can work towards moving up at. So like you, I have limited options at this point. Which is why I decided on this job over my other choice (freight; quick PIC in large turboprop) to begin with. I was tired of moving around every 6 months and so was she.

[Cruise]

Originally Posted by wheelsup

I've got T-Minus 10 months to go in my self-imposed two year limit at the regionals. Not sure what I'm gonna do next, but with crap like this happening we don't stand a chance to make it long-term here.

Wheels....

Do you have connections to move on w/ only SIC time? Or, are you thinking of bailing from the industry altogether after two years? That doesn't seem like enough time to be competitive for the big-iron carriers.

[crashmbern]

who would invest in a company that will only make a 2% profit at best. Don't most companies have at least a 20-30% profit margin. oh yea this is the airline industry we are talking about, stupid me.

[killbilly]

Originally Posted by crashmbern

who would invest in a company that will only make a 2% profit at best. Don't most companies have at least a 20-30% profit margin.

Depends ENTIRELY on the type of company, business model, etc...

[wheelsup]

Originally Posted by Cruise

Wheels....

Do you have connections to move on w/ only SIC time? Or, are you thinking of bailing from the industry altogether after two years? That doesn't seem like enough time to be competitive for the big-iron carriers.

None right now, no. I have heard back from multiple 135 companies but they are paying about what I get paid now for at most 4 hard days off a month. Next month I have 18, all weekends off including getting home on thanksgiving afternoon. 4, 3-day trips, ending in the afternoon on the third day. You just can't beat that schedule IMO after just one year at a regional.

The only "hard" connection I have at the moment is with US Air. A friend of mine knows one of their Chief Pilots, and another one of my friends father is a really senior CA there. All signs point to off the street hiring sometime in 2007. Who knows if their mins will be similar to CAL's or not (ie no PIC turbine req'd).

I'm mainly concerned with being a 4-5 year SIC. I look at the folks at ASA, Eagle, etc. and cringe. I vowed to myself I wouldn't let that happen, although I can see how it does. You get settled in your life, earn OK money ($35k-40k), the significant other works a good job, and have a high QOL over all.

I don't want to leave the industry, but working 12-16 hour duty days 4-5 days a week just doesn't interest me, especially in my 20's. Might as well enjoy life while I can, eh? I guess, to sum it up, I want to have my cake and eat it too! Is that possible? Maybe if you're lucky .