Management letter to Mesa employees

[Guardguy]

It was the best deal going at the time. Continental wouldn't budge so what were they supposed to do? Let CAL dismantle our company one plane at a time until the original CPA completely expired?

The problem this whole time was not that we were signing this agreement below costs but how the cost structure was applied. Instead of the cushy Cost+10% deal it became a flat hourly rate. Just like everyone else in this business.

The problem was that we are paying for the airplanes while Continental dictates how many hours to buy. So lots of airplanes + low hours = low/no profit. Get the hours back up to a reasonable level and we'll make money again. That's what this UA thing is supposed to do.

The analysts are predicting a profit next year for XJT no that the planes will be utilized. You doom and gloomers need to keep your shirts on and see how this plays out.

I'm, want to believe, lets hope it plays out well for us!

[V2+15]

I'm, want to believe, lets hope it plays out well for us!

Chin up and have faith, Guardguy. I notice your pessimism meter goes off the chart every now and then.

[ipilot]

I'd also like to add that XJT is merely one of the first of the regionals to go through a change in the way CPAs are negotiated. The majors got taken to the cleaners by their regional partners in the 2000s because of guaranteed profits. The future is going back to the "old way" of sharing risks through pro-rated and short term contracts. The majors can't afford to throw money at their regionals while they're losing money. Just look at SkyWest and Republic, two of the (arguably) more successful regionals: they made billions while their majors lost money hand over fist. All the time playing both sides of the field by flying for competitors.

Anyway XJT might appear to be getting sub-standard contracts now but when the rest of them start renegotiating they'll find much the same.

[XSive]

I'd have to think that Republic will have a difficult time at the negotiation table when their cpa renewals come up. With their recent aquisitions, they may now be seen as direct competition. Why support the competitors bottom line? If I were United/Delta/US air/American , I would definately place that flying in another regional that wasnt competing directly with the particular airline.

[TAF]

I'd have to think that Republic will have a difficult time at the negotiation table when their cpa renewals come up. With their recent aquisitions, they may now be seen as direct competition. Why support the competitors bottom line? If I were United/Delta/US air/American , I would definately place that flying in another regional that wasnt competing directly with the particular airline.

Exactly! I think they are going to be the next ACA/Expressjet branded operation. I am curious as to what their pilot group thinks of the purchases....oh wait they are probably hoping for a flow through.

[TheBills]

I'd have to think that Republic will have a difficult time at the negotiation table when their cpa renewals come up. With their recent aquisitions, they may now be seen as direct competition. Why support the competitors bottom line? If I were United/Delta/US air/American , I would definately place that flying in another regional that wasnt competing directly with the particular airline.

I agree with you, however I dont think any of there codeshares cares at the moment except for maybe united, Us Air does not care. In time im sure it will hurt them though.

[wingslevl]

An interesting rumor going around the interwebz is that Mesa had to sell spare parts to make payroll this last month. Honestly, I can't see how they'll last too much longer. But then again it is Mesa....

Mesa is like a friggin' cockroach infestation. It just won't go away no matter what anybody does. It's also dirty and full of diseases (JO). Just not good all the way around.