Topics: XJT, Comair, Embraer, Midwest, Porter, Republic, Romavia, SkyWest
XJT to Serve LAX-Mexico
Citing its upcoming emergence from bankrtuptcy, Delta (DALRQ) wanted as much flexibility as possible in its new contract with ExpressJet (XJT), limiting it to two years rather than the normal decade-long agreement. The new arrangement, which launches in June, centers on Delta’s Los Angeles hub to service Northwestern ski resorts and Mexico. Related Story

Comair Pilots Approve Contract
Comair pilots approved the recently negotiated contract after a protracted, bitter battle with 68 percent of voting pilots in favor of the agreement. The agreement, which gives Comair $40 million in concessions over the next four years, includes an $82.5 million bankruptcy claim for the pilots which was recently sold. Captain J.C. Lawson, chair of the Comair Air Line Pilots Association unit said that it was a settlement that no union would have voluntarily chosen, endorsing it only as a better alternative to a court-imposed deal. Lawson called on Comair management to begin to heal the rift created in the last 18 months by the long wrangling. “It is going to take a lot of effort and dedication to repair the damage to the working environment,” he said.
"Pilots have to decide what's best for their family, their profession and their future," Air Line Pilots Association Spokesman Paul Denke, told the Cincinnati Enquirer. Under the deal, pilots' base pay would be cut between 7.75 percent and 12.5 percent. Pilots' pay would range from about $21,120 to $95,021, down from $22,500 to $108,600. The contract expires March 1, 2011.
Delta threatened to shrink Comair’s 70-seat fleet should the pilots refuse the deal. So far Comair has shrunk to 130 jets, down from 174 at the start of bankruptcy. While promising Comair new aircraft when it emerges from bankruptcy, the proposal also calls for losing additional 50-seat jets but it is unclear how many. All these provisions would be nullified if Delta sells its regional subsidiary.

Midwest Increases Long-Haul Service
In addition to its recently announced increased frequencies in the Kansas City-San Francisco market, Midwest Airlines (MEH) is adding frequencies to Boston, Los Angeles, Orlando and San Diego from the market. The move is part of a planned 20 percent increase in capacity this year.

Porter Adds Seasonal Halifax Service
Seeking to introduce competition into the Halifax market, fledgling carrier, Porter Airlines will add Halifax to its small route network this summer from its base at Toronto City Airport. The Bombardier(BBD) 70-seat Q400 flights, June 29 through September 4, will extend the carrier’s Toronto-Montreal and Toronto-Ottawa routes to the vacation destination with two daily roundtrips via Montreal and two via Ottawa. "Since our launch, we have done very well with business travel on the Toronto to Montreal and Ottawa routes,” said President and CEO Robert Deluce. “Halifax extends the business market, while providing significant new leisure capacity. We will also be assessing the opportunity for year-round service.” To accommodate the addition of Halifax, Ottawa-Toronto service will move to six daily return trips from its current 10, while Montreal-Toronto will be adjusted to six from its current level of nine flights. The Toronto-Montreal and Toronto-Ottawa routes will return to their usual frequencies in the fall. Initial one-way fares will start at $199 on all Halifax routes.

Republic Airlines (RJET) ERJ 175 and 170 Deliveries

Embraer (ERJ) delivered the first two Embraer ERJ 175 jets to Republic Airlines (RJET) recently, inaugurating the jet’s introduction into U.S. service. The company has placed firm orders for 30 ERJ 175s, which will be operated as US Airways Express. The new aircraft, configured with 86 single-class seats, is the second E-Jet model flying the colors of US Airways Express. In 2004, US Airways Express was the launch customer of the ERJ 170. At the same time, Republic delivered the first two of 17 ERJ 170s for its new service with Frontier (FRNT). The aircraft will be used in service from Denver to Indianapolis, Omaha, Albuquerque and El Paso. Frontier has also ordered 10 Q400s to be operated by its subsidiary, Lynx Aviation.

Romavia Takes Additional 146

Romavia took a long-term lease on an additional BAe 146-200, which was delivered this month. It also extended the lease of its existing Seires 200 146 by several more years. Romavia is fully owned by the Romanian state and commenced operations in 1991. As well as offering chartered and scheduled passenger flights to European destinations, the airline also operates state and governmental flights for the Romanian government. The Romavia fleet consists of two BAC One-Eleven 500s and one Boeing 707, as well as the BAe 146. The airline’s first BAe 146 was originally earmarked primarily for regional charter flights from Romania, but has been used increasingly for governmental duties. The decision to lease the second aircraft means that the scheduled charter program will be re-instated from April 2007.

SkyWest Institutes Stock Repurchase

Lately, one of the first questions analysts ask during quarterly financial conference calls is whether or not they will institute a stock repurchase program. SkyWest (SKYW) joined Mesa (MESA)i n such an effort when it said it would repurchase up to five million shares of outstanding common stock either on the open market or in privately negotiated transactions deemed appropriate by management. “We believe that initiating a stock repurchase program at this time is a good use of financial resources and that it will further the advancement of certain corporate objectives” said Bradford R. Rich, executive vice president and CFO. He continued, “We also believe it will be in the best interest of both the company and our shareholders.”