XJT gets new 7 year CPA with CAL

[Cav]

HOUSTON, June 5 /PRNewswire-FirstCall/ -- Continental Airlines (NYSE: CAL - News) today announced that it has reached a new seven-year capacity purchase agreement with ExpressJet Airlines, Inc. to provide regional jet service for Continental Airlines at rates that are lower than rates under its current agreement and more competitive with those offered by other regional service providers. The new agreement is effective July 1, 2008.
The new contract enables Continental to continue to benefit from the excellent service and substantial feed traffic provided by ExpressJet. The base agreement covers flying by ExpressJet of a minimum of 205 regional jets in the first year and a minimum of 190 regional jets thereafter.

In addition, ExpressJet has the right to return to Continental 39 Embraer 50-seat regional jets that ExpressJet currently uses for non-Continental contract flying. Continental plans to add the returned aircraft to the new agreement and withdraw from the agreement up to 30 of its Embraer 37-seat regional jets currently flown by ExpressJet for Continental. Continental will then sublease or ground all of the withdrawn Embraer 37-seat regional jets to better align regional capacity with current market conditions. Additionally, the agreement reduces the rent Continental charges ExpressJet on 30 other regional jets that ExpressJet will retain for seven years to fly at its own revenue risk.

Continental and ExpressJet also entered into a settlement agreement and release of all the parties' claims relating to payments and rates under the original capacity purchase agreement, including all disputes previously disclosed as possible matters for arbitration.

[meritflyer]

link

This is great news for XJT. I understand the Most Favored Nation clause is gone as well. This is really s step forward for XJT. The company will most likely have some restructuring to do with the new lower rates.

Great news nonetheless.

[surreal1221]

Lower rates huh?

I wonder how MUCH lower, considering raw goods costs are outrageous.

It'll be interesting to really see what the MEC, and then on the bottom side - the bottom FO's have to say about this.

Hope it means less guys on the street, and hopefully none to be honest. Good luck

[meritflyer]

Originally Posted by ExpressJet Press Release

The company intends to return to Continental up to 39 aircraft previously released from the original capacity purchase agreement and to aggressively reduce costs in the coming months in response to the new agreement with Continental and the economic difficulties facing the entire airline industry.

I am not sure how XJT plans to shuffle airplanes around but, if my math is correct it'll be around 400 pilots on the street.

XJT returns the planes being used for Branded and some charter planes (39 planes).

CAL parks the 135's and places XJT's 39 Branded planes back into CoEx colors.

DL out of LAX stays (deal set to expire next mid-year).

So, out of their 274 airplane fleet they downsize to 235 frames. At 10 pilots per frame, they're just shy of 400 guys.

Still, it'll prevent BK for the company and allow them to restructure their current operation to actually make some money and work on expanding their business outside CoEx. I hope to heaven XJT doesn't come to pilots for concessions under the new rates.

[surreal1221]

Hold the line guys. Good luck, need any help. . .you know where to find me.

[SoCalAprch]

I don't know what to think of it.

[Clocks]

Originally Posted by surreal1221

Lower rates huh?

I wonder how MUCH lower, considering raw goods costs are outrageous.

It'll be interesting to really see what the MEC, and then on the bottom side - the bottom FO's have to say about this.

Hope it means less guys on the street, and hopefully none to be honest. Good luck

I'll reserve my final judgment until I see what xjet asks for from us the pilots.

But for now I'm happy. I don't know what Delta plans on doing, but the 30 37 seaters getting parked is about 300 furloughs, and a year to get recalled. Beats the heck out of SKYW dismantling xjet.

[kellwolf]

Originally Posted by Clocks

I'll reserve my final judgment until I see what xjet asks for from us the pilots.

But for now I'm happy. I don't know what Delta plans on doing, but the 30 37 seaters getting parked is about 300 furloughs, and a year to get recalled. Beats the heck out of SKYW dismantling xjet.

Word. Any furloughs suck, but I'm glad to see XJT working it out with CAL to stay solo from SKYW. The number SKYW was tossing out, if I remember the rumot mill correctly, was 800 guys on the street if the acquisition went through. So, does this mean that branded is officially getting rolled up and closed down? I'm guessing that's the "39 planes" talked about, but I don't know for sure.

[meritflyer]

Originally Posted by Clocks

I don't know what Delta plans on doing, but the 30 37 seaters getting parked is about 300 furloughs, and a year to get recalled. Beats the heck out of SKYW dismantling xjet.

I think XJT will be out more than 30 jets.

The CPA is for 205 for the first 12 months, 190 thereafter. XJT plans on giving back 39 frames and experiencing another 15 frame capacity reduction in July '09. This leaves XJT out 54 frames in all assuming DL keeps their 10 frame CPA and 13 pro-rate jets online.

As for a year recall, that'd be great but consider the additional 15 frame reduction after 12 months. That's another 150 pilots. Probably wont be furloughs but attrition rather would take care of it over the first year of 205 frames.

[Clocks]

The future of branded past October, the Delta agreement, pilot concessions, and how many airplanes are really needed by charter are the issues that aren't addressed by anything I've seen.

[meyers9163]

So you all at least will indeed keep CAL around. Honestly that's a great thing to have right now at least. I dont know what to think of the lower rates. As long as it means you are all paid the same and possibly still get your raises and what not in the future that's great. However the fact that you secured this, stared SKW in the eye and won and now can move on. If any furloughs do indeed happen lets hope it wont hurt ya'll that much. However does the possible furloughs include those already gone on COLA's or would they offer those before furloughs? I dont know. But I think this is still good news no two ways about it.

Also who saw this coming? I'd be willing to bet your company is working on something else for those 30 AC's. In order to keep the cuts limited when it comes to pilots. I dont know for certain but that would be my thoughts.

[meritflyer]

Originally Posted by Clocks

The future of branded past October, the Delta agreement, pilot concessions, and how many airplanes are really needed by charter are the issues that aren't addressed by anything I've seen.

Very true. In essence, XJT has no gain. They've secured a long term contract which is great but it's not growth. Branded will be clsoed. There's nowhere else to get 39 frames.

I hope they can renew with DL and keep the charter busy.

[meritflyer]

Originally Posted by meyers9163

Also who saw this coming? I'd be willing to bet your company is working on something else for those 30 AC's. In order to keep the cuts limited when it comes to pilots. I dont know for certain but that would be my thoughts.

CAL is parking 30 135's and replacing them with 39 of XJT's branded/charter fleet. There's no net loss really for CAL, only XJT.

[aloft]

So basically, all this exercise has accomplished is proving it's possible to whipsaw without owning a second carrier. Suh-weet!

[OldTownPilot]

Originally Posted by Cav

In addition, ExpressJet has the right to return to Continental 39 Embraer 50-seat regional jets that ExpressJet currently uses for non-Continental contract flying. Continental plans to add the returned aircraft to the new agreement and withdraw from the agreement up to 30 of its Embraer 37-seat regional jets currently flown by ExpressJet for Continental. Continental will then sublease or ground all of the withdrawn Embraer 37-seat regional jets to better align regional capacity with current market conditions. Additionally, the agreement reduces the rent Continental charges ExpressJet on 30 other regional jets that ExpressJet will retain for seven years to fly at its own revenue risk.

They don't necessarily have to give those 39 up. (Well per that verbage 39 -145s would replace the 30 -135s.) Knowing the relationship between JR and the forehead, I would not be surprised if XJT keeps them.

[meritflyer]

Originally Posted by OldTownPilot

They don't necessarily have to give those 39 up. (Well per that verbage 39 -145s would replace the 30 -135s.) Knowing the relationship between JR and the forehead, I would not be surprised if XJT keeps them.

Negative. XJT fully intends to give back all 39. It's right on their corportate website in their PR.

I think Ream will begin to work with rather than against CAL this time.

[surreal1221]

Originally Posted by aloft

So basically, all this exercise has accomplished is proving it's possible to whipsaw without owning a second carrier. Suh-weet!

Yup.

And then when the financials are made public, I would not be surprised AT ALL if Skywest Inc's subsidiary Skywest Airlines makes another backdoor go towards CAL flying.

Disgusting.

[Chris_Ford]

Originally Posted by meritflyer

CAL is parking 30 135's and replacing them with 39 of XJT's branded/charter fleet. There's no net loss really for CAL, only XJT.

You, shut up.

Originally Posted by aloft

So basically, all this exercise has accomplished is proving it's possible to whipsaw without owning a second carrier. Suh-weet!

You, why don't you break into the biz and then learn what REALLY happened. This is the furthest thing from a whipsaw AT ALL. So why don't you join Merit in the corner.

Originally Posted by meritflyer

Negative. XJT fully intends to give back all 39. It's right on their corportate website in their PR.

I think Ream will begin to work with rather than against CAL this time.

Stop speculating and doom and glooming, you left, you're happy, WE GET IT. Why don't you go join yourself and aloft in the corner!??!

[Chris_Ford]

Originally Posted by surreal1221

Yup.

And then when the financials are made public, I would not be surprised AT ALL if Skywest Inc's subsidiary Skywest Airlines makes another backdoor go towards CAL flying.

Disgusting.

First year FO harcore union thumper doesn't know what a whipsaw is. Wow.

[Seggy]

I agree with Chris here.

I think we all need to mind our business and offer support for one another, not circle like vultures wondering who is going to go out of business.

[Clocks]

There's a worst-case scenario from this with 39 parked airplanes and pay cuts (which some seem eager to see for some reason), and a best-case that would require significant amounts of kool-aid to get excited about (xjet keeping the 39 airplanes and flying them for another carrier). The final result will probably be somewhere in between, hopefully after months of attrition and a new round of COLAs reduce the need for furloughs. But all in all as it stands right now, with a lot of questions still unanswered, I think this agreement is about the best we could have hoped for.

[meritflyer]

The 39 planes will be returned to CO. It was in XJT's company release.

[Van_Hoolio]

Chris_Ford: Thanks for saying those those things.

[meritflyer]

Originally Posted by Chris_Ford

Stop speculating and doom and glooming, you left, you're happy, WE GET IT. Why don't you go join yourself and aloft in the corner!??!

Doom and gloomer??

Do you care to re-visit your PM's to me about XJT going under and asking me for a job referral? You have to be one of the biggest gloomers out there.

Another mature post by Ford.

[KW]

According to our own internal communications and from speaking with one of the MEC higher ups this evening we are still looking at flying all 274 into the fall, and 250-260 thereafter.