Skywest makes big order with options

[General Lee]

Reuters
UPDATE - Bombardier gets C$1.2 billion order from SkyWest
Monday September 15, 12:10 pm ET


(Adds details, quotes, analyst comment, stock price move)
MONTREAL, Sept 15 (Reuters) - Plane and train maker Bombardier Inc. (Toronto:BBDb.TO - News) has won a C$1.2 billion ($876 million) order to supply 30 of its 70-seat regional jets to United Express carrier SkyWest Airlines (NasdaqNM:SKYW - News).

Montreal-based Bombardier said on Monday the SkyWest order includes options for 80 additional aircraft, which could boost the value of the deal to about C$4.6 billion.

Bombardier will deliver the jets from early 2004 through 2005.

Bombardier class B shares gained 16 Canadian cents, or 3 percent, to C$5.66 on the Toronto Stock Exchange (News - Websites) on Monday morning as more than 4 million shares changed hands.

The 70-seat jet market segment is key for Montreal-based Bombardier as the aircraft is sold for a higher price than its original 50-seat version.

"This deal confirms the domination of Bombardier in the 70-seat market," said Pierre-Yves Terrisse, analyst at Desjardins Securities.

"It is positive for the backlog and orders are starting to come in," he said, recalling the U.S. Airways Group (Other OTC:USALA.PK - News) order for 25 Bombardier 70-seat regional jets last May.

Terrisse noted that Bombardier's top rival, Brazil's Embraer (Sao Paolo:EMBR4.SA - News; NYSE:ERJ - News), had not yet delivered its first 70-seat regional jet.

"Bombardier has a length-lead over Embraer in this sector," he said.

SkyWest has said it expects to grow through expanded flying for bankrupt partner United Airlines, a unit of UAL Corp. (OTC BB:UALAQ.OB - News).

($1=$1.37 Canadian)




I have also heard that Skywest has been approached by Northwest to also fly 70 seaters for them.(Pure rumor) Atleast Skywest can say they have saved on pilots costs----with the same wages for both 50 and 70 seat aircraft. Will that change? Probably not----it wouldn't be COMPETITIVE. ASA and Comair must also be watching this.


Bye Bye--General Lee

 

[reno]

Atleast Skywest can say they have saved on pilots costs----with the same wages for both 50 and 70 seat aircraft. Will that change? Probably not----it wouldn't be COMPETITIVE.

Don't be so sure General Lee. The current contract is for the same pay for 50-70 seaters for 18 months only. (What, 12 months remaining?) Management fought hard to win that citing that they REALLY needed it to be competitive to get the contracts. Pilots gave management the benefit of the doubt. But when the contract gets renewed it's gonna be tough to convince the pilot group of the same as SkyWest has remained profitable throughout. The vast majority of SkyWest pilots want a wedge driven between 50-70 seat pay scales.

 

[General Lee]

Reno,

I like your optimism and I hope that you are correct. But, in 12 more months the competition will also have your same rates, and your management will state that "We have to Compete!!!! We can't give you raises, we will go Chap 11!!!" I know that is a little bit overboard, but that is probably what they will say. It is right out of the airline management playbook. Good luck.

Bye Bye--General Lee

 

[asacap]

Did I understand this correctly that Skywest negotiated, then approved a pay rate for the 70 seater that is equal to the 50 seater. Unbelievable. Minimum wage, here we come.

 

[Ted Striker]

Did I understand this correctly that Skywest negotiated, then approved a pay rate for the 70 seater that is equal to the 50 seater. Unbelievable. Minimum wage, here we come.

Everything up to 99 seats is the same rate.

 

[asacap]

99 Seats! Are you joking? I don't believe anyone would do that. Please tell me this is a joke. Was this ever voted on? Who cares on the # of seats if it pays the same. This is truly sad if this is true. I pray that it isn't, but if it is, skywest is leading the way to the bottom.

Look out Mesa. There's a new whore in town.

 

[House_X]

Why on earth would you guys sign the same rate for up to 99 seats. I thought Skywest was a respectable company where management and the pilot group "get's along"? I thought you guys just voted for a pay freeze on the CRJ-200 and the Brazilia?

No wonder we are having trouble negotiating our narrowbody payrates...

 

[StopStarin'AtMe]

No wonder we (ACA) are having trouble negotiating our narrowbody payrates...

So does that mean that you guys are still in negotiations. I thought you were going solo.

 

[nimtz]

!

Don't be so sure General Lee. The current contract is for the same pay for 50-70 seaters for 18 months only. (What, 12 months remaining?) Management fought hard to win that citing that they REALLY needed it to be competitive to get the contracts. Pilots gave management the benefit of the doubt. But when the contract gets renewed it's gonna be tough to convince the pilot group of the same as SkyWest has remained profitable throughout. The vast majority of SkyWest pilots want a wedge driven between 50-70 seat pay scales.

They should of wantED a wedge so bad that the wouldn't of voted in a single pay rate regardless of seat type. Talk about a bunch of koolaid drinking buffons! BTW, good luck convicing your management through your non-union association that you deserve real pay to fly the 70 seaters. I'm sure mangement will be in a big hurry to help you, because they care about you that d*mn much.

I'll bet Skywest places a bigger order in a year for more 70 seaters to fly for CAL as well. Ah the race to the bottom continues, but hey at least we get to fly jets. Pretty cool right!?!

 

[House_X]

So does that mean that you guys are still in negotiations. I thought you were going solo.

We're negotiating "solo" rates, not United rates. And now there's someone else who's lowballing which will make ALL CONTRACT NEGOTIATIONS EVEN MORE DIFFICULT.

THANK-YOU SKYWEST!!!!