Random Observations From The Desert...
Latest Carnage
Three reports caught my eye this week...
1) Express Jet is officially pulling the plug on their point-to-point services after Labor Day. They also were informed that Delta was pulling the plug on their services out of LAX, so this is a huge hole in their operating plan.
Ironically, all this comes a few weeks after they spurned an offer from SkyWest as not being a fair market valuation. It's not quite on the level of Kerry Skeen's misjudgement when Mesa was trying to buy up Atlantic Coast, but it's pretty darn close on the "Doh!" scale.
2) Midwest Airlines is grounding their MD80 fleet, taking some B717's out of service, and essentially laying of 50% of their employees. To add insult to injury, they've decided to re-baseline their pilot and flight attendant base rates against RJ operators like American Eagle, Skywest, and Republic. As a result, they're asking for pay cuts of between 25% and 40% depending on seniority and workgroup...
Yikes.
It might be more advantageous to be furloughed and collect unemployment, which is based on the pre-separation salary...
Speaking of "Doh!"... Had Airtran won the bidding war for Midwest, it's hard to say whether or not this would have still come to pass. Certainly the MD80 fleet would have been in jeopardy, but there might have been a little more job security for the employees. Then again, Airtran just announced that they're looking to furlough approx. 5% of their existing employees.
3) Rumor has it (but hasn't been confirmed) that Virgin America is considering a restructuring as well, and will become more of a short-haul carrier with less of a focus on the transcon market. Good news for Jetblue and other legacy carriers flying transcons, but I'm not sure it's wise. Great amenties like live TV aren't as important on a one hour flight... Plus, they're competing against Southwest and United in a lot of the remaining short-haul markets.
1) Express Jet is officially pulling the plug on their point-to-point services after Labor Day. They also were informed that Delta was pulling the plug on their services out of LAX, so this is a huge hole in their operating plan.
Ironically, all this comes a few weeks after they spurned an offer from SkyWest as not being a fair market valuation. It's not quite on the level of Kerry Skeen's misjudgement when Mesa was trying to buy up Atlantic Coast, but it's pretty darn close on the "Doh!" scale.
2) Midwest Airlines is grounding their MD80 fleet, taking some B717's out of service, and essentially laying of 50% of their employees. To add insult to injury, they've decided to re-baseline their pilot and flight attendant base rates against RJ operators like American Eagle, Skywest, and Republic. As a result, they're asking for pay cuts of between 25% and 40% depending on seniority and workgroup...
Yikes.
It might be more advantageous to be furloughed and collect unemployment, which is based on the pre-separation salary...
Speaking of "Doh!"... Had Airtran won the bidding war for Midwest, it's hard to say whether or not this would have still come to pass. Certainly the MD80 fleet would have been in jeopardy, but there might have been a little more job security for the employees. Then again, Airtran just announced that they're looking to furlough approx. 5% of their existing employees.
3) Rumor has it (but hasn't been confirmed) that Virgin America is considering a restructuring as well, and will become more of a short-haul carrier with less of a focus on the transcon market. Good news for Jetblue and other legacy carriers flying transcons, but I'm not sure it's wise. Great amenties like live TV aren't as important on a one hour flight... Plus, they're competing against Southwest and United in a lot of the remaining short-haul markets.
posted by Lanehog at
10:08 PM
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