Originally Posted by
Mitch Rapp05
Scope relaxation had nothing to do with the furloughs?
It absolutely did--but probably not in the way that most are thinking.
Notice that UAL did not experience significant 70 seat RJ growth in the months prior to the 737 drawdown nor afterward. UA's desired number of 70 seat RJs were already in place and has been virtually static since. UA's remaining 96 737s in 2008 were not directly replaced by 70 seat RJs although it can be easily argued that 70 seat RJs did replace the 62 737-300/500s that were retired during the BK between 2003-2006.
Rather, the scope hole that permitted the UA 737 reduction was the ability for UAL outsource flying to a codeshare "partner". In this case its partner in the 2008 'virtual merger' (i.e. CAL) where UA placed its code on nearly all CAL flights and UA could more efficiently sell tickets on CAL flights between A and B instead of using UAX. Via the "virtual merger" both UAL and CAL optimized their entire networks (note that CAL also parked aircraft and dropped routes where it competed with UA) and rightsized the fleets and city pairs to eliminate overlap. When the actual merger announcement occurred in 2010 the network heavy lifting was already done and the merger sailed through the DOT/DOJ process with virtually no restrictions other than giving up some token EWR slots.