azpilot

Call Summary:

- No mention of Australia

- CAL wants the flexibility of terminating at will but also wants to control us so no one else can take ownership of our company. We are working on trying to get something more long term. Pretty much sounds like CAL wants to lower our margins and keep the same current agreement. It's just business right? Sad but true they have us by the !@lls. We will see what happens.

- N/S Routes in CA are working really well. E/W are ok and frequency may increase for summer travel season. No mention on east coast stuff. I am sure other places are doing well and no one asked specific questions on those cities. Leaving SDF although the numbers recently have improved there. We just felt some of the new west coast stuff would be a better choice.

- Delta stuff sounds like it is going well

- No breakdown on how much money we lost with branded and they would not give any specifics (Wait for the 10k)

- Someone else mentioned analysts don't like branded. I would say that is pretty much the case. Some of these same experts couldn't figure out on their own what cities we pulled out of on the branded side.

ipilot

It will never cease to amaze me that those in charge of our institutional investment companies know so little about the companies they pour money into!

That said, these analysts look at dozens of companies each and we're probably the only airline they deal with. They probably have almost no idea how the airline business operates and they go by the figures alone.

It's unfortunate that Independence Air keeps being talked about. It really isn't the same thing from an airline perspective but, no matter how you slice it, looks awfully similar from an investment point of View.

In any case I have to say that analysts missing the mark could be a good thing. It's allowing the company to buy back stock at a bargain and for those of us who are more XJT savvy, we can probably make a good profit when the company "suddenly and miraculously" makes a profit. I saw something like this before when I bought some AAPL in 1997.

ipilot

By the way it looks like investors are reacting positively. We're an hour into trading and XJT is up ~4% and climbing steadily. Curious to see where it closes....

ipilot

ExpressJet mulls goin private amid woes: CEO

Man they sure know how to twist quotes around to fit a story!

merit

I was not impressed by the call at all. I thought it was very vague and rushed. In my view nothing positive came from Jim or Fred. In fact, Jim seemed somehwhat flustered during the call. I understand that XJT has no model to compare their year by year performance by but I sure would like see some financial and contract guidance here.

I've been hearing the whole spill that we're working with CAL to strengthen our relationship and partnership since we lost the 69 planes. I personally believe no head way has been made with respect to contract extensions, additional flying, block hours, or frames.

It's time to see XJT announce something good. I haven't seen one positive (or stable) press release since the announcement of the Delta relationship which by and large was a small victory in my opinin since the length of the contract is very short. Hopefully we announce some decent codeshares here in the next 60-90 days. The company need to press forward contractually with business and secured CPA's or codeshare for branded ops.

It'd be a huge hurdle to see XJT make an announcement of a 10 year CPA with CAL, Delta, or an additional carrier in addition to see monthly performance of the branded's load factors to be in the 70% range. I believe the west coast could be an excellent staging ground for an all out secondary city attack for branded and could spell success if marketed right and served right.

A few things I didn't like per the call was the announcement of the stock repurchase program. The company has $250M in cash and is planning on spending $26M on a repurchase program. Cash is precious right now since we're not cash flow positive yet. I'd rather see that cash put away for growth rather than make a statement to the shareholders. Wrong time and wrong move to blow $26M in my opinion.

I also didn't like the tone of the conversation with regards to the CAL and XJT relationship. XJT must secure a long term contract with CAL for the 205 frames. This is vital to our growth and sucess even at a 1-3% rate reduction. If XJT needs to go back to the board and draw out ways to be more expense efficient to make up for the rate reduction, so be it.

Stephan Dupourque

I got one thing out of it.
Company is buying back stock + negotiating a firmer CPA w/CAL = confidence is high that we will negotiate a firmer long term agreement with CAL

If Ream did not feel a deal was going to get done with CAL, I would think he wouldn't be too high about buying stock back.

Our CAL CPA is the biggest worry to investors, not branded flying.

The irony is, you should never buy airline stock (wise advice from old pilots) and you should only invest in what you know (wise advice from Warren Buffet). So what do you do when you really know airline stuff? And you really have a lot of confidence in your company? Who's in? Damned if you do, damned if you don't (definition of oxymoron by Bart Simpson). This time next year, are you going to be kicking yourself for not buying our stock at $3? Or are you going to be that guy who said, "I told you so," when the stock goes to $1?

merit

I cant agree with that. The buy back in my eyes was a necessary evil. The company had to purchase the stock back as the stock has fallen more than 60% this year. It was a risky move to invest the cash that I believe, we'll need.

Likewise, this should be every pilot, employee, stockholder, or manager's biggest concern at this point. Without CAL feeding the airline a constant diet of guaranteed cash, I find it very difficult to fathom XJT would continue to exist.

Stephan Dupourque

Sounds like you're the guy that's going to tell me, "I told you so" when the stock goes to $1. At least I'll be able to buy a beer with my stock.

merit

Naw...

I do have great expectations and hopes for XJT. I dont see the stock going to $1.