Expressjet (XJT) BUSINESS ANALYSTS forecast

[CaptainChris87]

"S&P Analyst Research Notes
S&P REITERATES HOLD OPINION ON SHARES OF EXPRESSJET HOLDINGS
Monday 03/10/2008 10:53 AM ET
XJT posts Q4 operating loss of $0.52 vs. EPS of $0.40, wider than our $0.25 loss estimate. We do not think XJT's independent branded flying will ultimately be successful, due to what we see as the difficult economics of operating a 50-seat fleet. We also think there is a risk that Continental (CAL 23****) could return more planes to XJT, and CAL could pressure contract rates. But we think XJT's share price discounts much of these risks. We are cutting our 12-month target price to $2.50 from $3.50, an enterprise value-to-EBITDA multiple of 4X our '08 EBITDA estimate, below peers."


I agree with them for the most part. I however think "tis the season" for a buyout. Between Ch. 11 or buyout im willing to bet a buyout will take place. Their business plan of doing independent charter flying in the midst of a POSSIBLE economic recession, on top of rising fuel prices, and even a slightly decreasing value of the dollar, has hurt their financial books. Especially on the branded side, I however think their contracts with Delta and CAL should suffice for their survival, but their branded is hurting them.


A buyout will be good for shareholders, depending on premium or acquiring firm. But for the employees who knows, possible cutbacks may occur.

http://www.sbsun.com/ci_8534691?source=most_emailed (More cut flights from branded)



I forsee more drop in value on common shares, and then perhaps a buyout or merger news will boost it.

[Velocipede]

A buyout would certainly be better for the pilots. As opposed to a FlyI type failure.

[jtrain609]

A FlyI type failure is impossible given the current structure of the company.

Say it all you want, it doesn't make it true.

[DZERO]

Nothing is worse than going to work and seeing nothing but bad news. I've seen it pretty much the whole time I've been at the carrier I'm at. Good luck to the Xjet peeps here.

[100LLguy]

Originally Posted by jtrain609

A FlyI type failure is impossible given the current structure of the company.

Say it all you want, it doesn't make it true.

HUH??? Your branded flying and DELTA pro rate flying is erasing all profits from the CPA with CAL....

"It's impossible with the current structure"......Not to be an a**, but when you drain all your profits from you guaranteed revenue and turn a 31.7 million dollar loss for Q4 that eats into your cash on hand......well, you better believe failure is possible.

Yeah, we know you are a newbie at XJT and worried about your job....doesn't mean things are going to be sunshine and roses.

XJT is losing ground ops from CAL as well.....there goes more guaranteed profit for XJT

Good luck guys....you will all need it.....It's tough to see it happen to a company trying to change the industry.....A sign of the times

[B767Driver]

Originally Posted by DZERO

Nothing is worse than going to work and seeing nothing but bad news. I've seen it pretty much the whole time I've been at the carrier I'm at. Good luck to the Xjet peeps here.

Except in the late '90's...I've never seen anything promising, financially, about this industry.

[Velocipede]

Originally Posted by 100LLguy

HUH??? Your branded flying and DELTA pro rate flying is erasing all profits from the CPA with CAL....

"It's impossible with the current structure"......Not to be an a**, but when you drain all your profits from you guaranteed revenue and turn a 31.7 million dollar loss for Q4 that eats into your cash on hand......well, you better believe failure is possible.

Yeah, we know you are a newbie at XJT and worried about your job....doesn't mean things are going to be sunshine and roses.

XJT is losing ground ops from CAL as well.....there goes more guaranteed profit for XJT

Good luck guys....you will all need it.....It's tough to see it happen to a company trying to change the industry.....A sign of the times

And that's EXACTLY what happened to FlyI. They tried to go it alone in too short a period of time with 50 seat RJs and flamed out. XJT may have a bit more breathing room, but you're HEMMORAGING. If the bleeding doesn't stop soon, you're done.

Ever considered Corporate flying? Its not a bad gig.

[JBUCREW]

Originally Posted by Velocipede

And that's EXACTLY what happened to FlyI. They tried to go it alone in too short a period of time with 50 seat RJs and flamed out. XJT may have a bit more breathing room, but you're HEMMORAGING. If the bleeding doesn't stop soon, you're done.

Ever considered Corporate flying? Its not a bad gig.

I agree...
What some are failing to see here is that this is very much like FlyI only in a different way. Before FlyI we were ACA and we flew for United and Delta. Much like Xjet we had a pretty good contract and had a good pay scale, so in turn our contract costs were high for UAL/DAL. Well both UAL/DAL started to look at the numbers and saw that our good olde bottom feeding friends at Mesa could do the same work for much less then ACA. Now is Mesa the same product as ACA or Xjet, no way. But at the time UAL/DAL didn’t care its all about $ signs.
Now both companies ACA and Xjet are were and are trying to avoid pay cuts etc... By looking for other ventures, which is great for the employee's. FlyI failed and Xjet airlines is in the process of failing. Xjet is still ok for the time because you didn’t put all your cards into branded flying, but if branded is causing your contract flying to loss money, trouble is ahead and temporary deals with Jetblue, frontier, and United are just a band aid.
As long as you have airlines that will do flying for rock bottom prices, and major airlines that care more about money then the service provided then the pay and contracts will never improve.
Best of luck to all Xjet guys, but there are more similarities to FlyI then there isn’t...

[jtrain609]

And much UNLIKE FlyI, Express only has 18% of the fleet tied up in branded.

Listen guys, you're not getting it; ExpressJet WILL NOT disapear. We might furlough, and I might end up on the street, I don't think anybody has denied that. But as far as a full on systematic failure and liquidation of the company, that simply isn't possible given the current setup. Maybe half of the fleet will disapear? That's certainly a possibility, but until CAL pulls 100% of their fleet from Express, the company is going nowhere.

Express still has over $200 million in the bank, assured cash coming in and they again only have 18% of the fleet tied up in branded.

Yell and scream FlyI all you want, that's great, it's still not true. I might be out of the job, but I'll assure you that we won't have a liquidation of the company. The board will reduce rates with CAL to maintain that contract and chop the company in two before they write off the entire investment. You guys are looking at things soley from the pilots perspective, not from what the board will do to make things happen in the event of more flying being lost from CAL.

[777forever]

I don't think XJT is going to fail. What I think might be possible is downsizing when management finally puts an end to the branded operation. But hopefully, management will find homes for those planes.

[jtrain609]

Obviously, but that's not what happened to FlyI.

[777forever]

Originally Posted by jtrain609

Obviously, but that's not what happened to FlyI.

Yup, so XJET is only 18% like FlyI I XJET got all the CAL flying pulled and turned the entire operation into aqua fresh plane then I would say no bueno amigo for the company.

[JBUCREW]

Originally Posted by jtrain609

And much UNLIKE FlyI, Express only has 18% of the fleet tied up in branded.

And nobody has said anything against that????

Listen guys, you're not getting it; ExpressJet WILL NOT disapear. We might furlough, and I might end up on the street, I don't think anybody has denied that. But as far as a full on systematic failure and liquidation of the company, that simply isn't possible given the current setup. Maybe half of the fleet will disapear? That's certainly a possibility, but until CAL pulls 100% of their fleet from Express, the company is going nowhere.

And again nobody is saying they are going to disapear...

Express still has over $200 million in the bank, assured cash coming in and they again only have 18% of the fleet tied up in branded.

FlyI at 180 million at one point... Assured cash is coming in one door and then going right out another.


Yell and scream FlyI all you want, that's great, it's still not true. I might be out of the job, but I'll assure you that we won't have a liquidation of the company. The board will reduce rates with CAL to maintain that contract and chop the company in two before they write off the entire investment. You guys are looking at things soley from the pilots perspective, not from what the board will do to make things happen in the event of more flying being lost from CAL.

And your looking at it from the point of a guy that doesnt want to lose his job and trying to make it look better then it does... and man I'm with you on that because I did the samething. Nobody here wants express to go out, and I dont think that will happen... I just think that there is going to be some big cut backs at express in the near future if you guys dont get some long term contracts.

[jtrain609]

To be incredibly honest bro, I don't really care if I lose my job. I came into this career knowing I was mostly likely going to ride a few companies into the ground before things stabilized. If I do in fact lose my job, I'll find another one. I'm not exactly crapping myself over the prospect, I simply don't think that the doom and gloom picture that everybody is painting is accurate. If I see that I'm going to end up on the street, then I'll head to another company. Right now I don't think that's in the cards, but I'll continue to re-evaluate where I'm at and where the company is.

But again, a FlyI style situation where liquidation is the final result is far fetched at best, and a horrible analogy. It's not the same situation, and until we go all branded it won't be.

[JBUCREW]

train....

Im going to say this for the last time in this thread and im done... I DONT THINK YOU WILL END UP LIKE FLYI... just big cuts.

Im out

[jtrain609]

Then I say bring it, I'm looking for an excuse to get a normal job, grow my goatee back out and get a few piercings.

[Velocipede]

That'll go over good in court!

[jtrain609]

I'm hoping so!

[GaTechKid]

If it really came down to it I'm sure XJT would just drop the branded operation and truck on with their CAL/DAL contracts.

[Velocipede]

Except that those contracts look more and more tenuous.

[jtrain609]

That's an overstatement of the facts.

Continental COULD pull the entire contract with a years notice, but I'm willing to bet every CPA has that same deal.

Continental COULD get rid of Express 100% over the next 6 years, but they'd be idiots to do so.

Personally I think Express should play chicken with CAL and say, "WE'RE dissolving the contract, and unless you want to find homes for 209 aircraft, and with that, find another 209 aircraft for regional feed, we'd like to renegotiate our contract with you, on OUR terms."

Ream would most likely be fired for doing that, but CAL would be left with their pants down and would be forced sign a more favorable CPA with Express. There's no way they could replace that much lift that fast.

[meritflyer]

XJT's model may be the most viable in today's market with the uncertainty provided mergers, fuel costs, and aircraft shifts. The company is by far, the most liquid provider out there. Now, given the fact as Train said, 18% or so is tied up in branded (soon to be about 15% as corporate aviation increases in size) and the rest sitting in CPA/pro-rate DL and CAL flying, the company is in the same situation as nearly any other regional.

If CAL puts planes back to XJT, DL cuts us out, branded fails, and we furlough big deal. It happens. Life goes on. I made about 9X my current salary prior and will make it after. Aviation doesn't pay enough at the regional level for anyone to cry about a furlough.

[DE727UPS]

deleted

[Gonzo]

Don is there something you need?

[SteveC]

In the immortal words of DT, "Don't start none, won't be none."