Mesa Airlines

[700UW]

The agreement between US Airways and Mesa Airlines is a revenue gauranted for profit contract for Mesa.

Mesa gets a profit no matter if they carry zero passengers or 50.

No where in US Proxy Statement you can find how much Mesa gets. US does their reservations, ground handling and customer service or one of the wholly owned does.

Mesa's only costs is the plane, fuel, crew, insurance and maintenance (they outsource alot).

Does anyone know how many millions of dollars Johnny O gets from US?

And an RJ has a higher opererating cost percentage wise then a 737 or A320.

 

[Long Gone]

You will not find the number. The SEC statements concerning contract numbers are omitted for competitive concerns. The money and driving force behind MAG is George Murhnane (sp). a investment banker who sits on the board and bankrolled Johnny O. Ornstein's past history in the securities industry earned him a 5 year suspension and hefty fine. The complete episode with Johnny O's business ethics was featured in a post in Forbes a few years ago. He stated he committed the offense because "he didn't desire for his investors to lose money". The facts are opposite to this statement. Once a crook always a crook in my book. Run don't walk if Johnny O and his business associates desire a contribution from your pocketbook. He's living proof of the adage A fool and his money are soon departed. It's too bad U management is a eager partner. Hasn't been to successful for U over the years but Johnny O and Murhnane have made a boat load of money. I wonder if any U BOD members or top management's relatives own Mesa stock?

 

[SpinDoc]

The agreement between US Airways and Mesa Airlines is a revenue gauranted for profit contract for Mesa.

Mesa gets a profit no matter if they carry zero passengers or 50.

No where in US Proxy Statement you can find how much Mesa gets. US does their reservations, ground handling and customer service or one of the wholly owned does.

Mesa's only costs is the plane, fuel, crew, insurance and maintenance (they outsource alot).

Does anyone know how many millions of dollars Johnny O gets from US?

And an RJ has a higher opererating cost percentage wise then a 737 or A320.

700UW:

Regardless of what is paid to Mesa for the fee for departure
agreement, it is still LESS than what it would cost to fly the
same segment in house. The reasons for this are:

1. Crews are paid far less than 15 or 20 year US mainline pilots
and flight attendants.

2. Hull and liability insurance for each aircraft are paid by Mesa,
not US.

3. Benefits (if there are any) are paid by Mesa and with younger
crews, they cost less.

4. Ownership or lease costs for EMB-145, CRJ, and B-1900 are much
lower than B-737 aircraft.

The bottom line cost is MUCH lower to have Mesa operate our flights
than our own personnel.

 

[ringmaruf]

While I don't know the specifics of the US-Mesa deal, the industry standard seems to be about a 5-8% profit margin for the regional.

 

[Long Gone]

Like I stated before it is pure conjecture to state a figure if you do not have the contract. It's very hard to place any credibility in any proclamations from corporate America, Public Accounting firms or Equity trading company's in light of Enron, Worldcom and our own directors. I agree the cost difference between U groups mainline division and MAG is large. The difference between U groups other divisions and MAG isn't. It is impossible to accurately state a definitive number. That is not by accident and without a reason. U and MAG like the arrangement, its value is very evident to a select few and the consequences to many thousands.

 

[TBONEJ4J]

The bottom line cost is MUCH lower to have Mesa operate our flights
than our own personnel.

The Bottom Line is that MESA makes a large profit from Cost Plus Contract operations for US Airways.

Those profits are paid for by the US Airways wallet.

To suggest that there is no way to avoid this because of the MESA cost structure is to ignore the profits they make and the fact that Management uses them to cannabilise the indigenous operation.

With reasonable, industry standard pay rates, all that equipment could be operated within the group and still operate at a profit. But at least the profit would remain with US Airways, not with the Contract Outsourcee. The only real competition which is killing the US Airways Work Groups is the rapidly growing same brand outsource monster.

No longer is the competition the other Brands, it's the insidious disease that is taking your own Brand from you.

 

[Light Years]

With reasonable, industry standard pay rates, all that equipment could be operated within the group and still operate at a profit. But at least the profit would remain with US Airways, not with the Contract Outsourcee. The only real competition which is killing the US Airways Work Groups is the rapidly growing same brand outsource monster.

No longer is the competition the other Brands, it's the insidious disease that is taking your own Brand from you.

I agree. I think this should be concern #1 for UGroup employees. I think WO employees and mainline furloughees are much more aware of this than the senior mainline people left. They'll be gone someday too and wonder what happened.

 

[DorkDriver]

Competitive costs? PSA FO's and FA's make less than their counter parts at MESA. If the CRJ700's go to MESA they are flown at 50/50 and the J4J guys go to the bottom of the seniority list. Why should a WO be asked to accept anything different with regards to seniority? At least by keeping the flying within at the WOs it keeps MESA from putting their hand in the Group pocket.....

 

[the turtle]

To get back to the question, it's between $2500-2700 per flight, plus fuel and other stuff.

 

[BoeingBoy]

While it doesn't answer the question, this from Mesa's SEC filings gives an idea of what is included in the "fee for departure" contract:

" The America West, United, Frontier and the US Airways regional jet code-share agreements are revenue-guarantee flying agreements. Under a revenue-guarantee arrangement, the major airline generally pays a fixed monthly minimum amount, plus certain additional amounts based upon the number of flights flown and block hours performed. The contracts also include reimbursement of certain costs incurred by Mesa in performing flight services. These costs, known as "pass-through costs," may include aircraft ownership cost, passenger and hull insurance, aircraft property taxes as well as, fuel, landing fees and catering. The contracts also include a profit component that may be determined based on a percentage of profits on the Mesa flown flights, a profit margin on certain reimbursable costs as well as a profit margin based on certain operational benchmarks."

Jim

 

[700UW]

I was told by some Mesa employees they get $3,000 per flight from CLT-SDF.

 

[funguy2]

4. Ownership or lease costs for EMB-145, CRJ, and B-1900 are much
lower than B-737 aircraft.

Not necessarily true. There are cheap used 737's on the market, while the contract prices for new CRJ's were locked in when ordered.

 

[the turtle]

the fee for the rj's is the same whether a 30 minute flight, or two hours. It is NOT $3000.

you may now resume your usual Mesa bashing. enjoy your flight.

 

[700UW]

the fee for the rj's is the same whether a 30 minute flight, or two hours. It is NOT $3000.

you may now resume your usual Mesa bashing. enjoy your flight.

Please show me where I bashed Mesa?

And please show me where it is not $3,000.

 

[fr8tmastr]

The bottom line is out of X amount of cash given to MESA, they can make AC payments (ours would be the same) insurance, maintenance. (ours would be the same) Gates and ground personell are allready ours. Express crews with the exception of the first two or three years, Mesa guys make more (now). With all that MESA still manages a tidy profit. Profit that JO enjoys, profit that is not in Airways' wallet.