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Old 04-30-2010 | 11:33 PM
  #39  
Daniel Larusso
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If UAL was planning on merging with CAL and getting rid of XJT, why would they sign a 5 year contract with them so recently?
Why did they sign brand new 10 year deals with UFS and TSA only to unceremoniously dump them shortly thereafter? We are talking about the black widow of commuter aviation here. SkyWest has the longest continuous 'relationship' with United and it only dates back 13 years. Even TSA had 15 years with TWA before the AA deal(whom they've continued on with). UA has left many a regional high and dry before with little thought to their respective carrier(s) size, service level, or network concentration levels. They did it during periods of expansion (Mesa, UFS, TSA, GLA), they've done it during periods of contraction (ACA, AirWis). All this without a merger over the period that would make such capacity reductions easier and more appropriate.

Given the history of the industry in general and UA in particular with feeders, I don't think any carrier can ever truly feel comfortable with their position relative to UAL-although plenty have over the years and likely continue to do so. Especially when you consider that in any merger of this size, there's usually a war chest of financing that comes about. Theoretically, it's there to safely support the cost of integration and provide appropriate reserve funds to the new larger entity. In reality we all know that it usually gets squandered on bonuses and other bs vs. anything operationally related, but it also could provide something relative to this discussion. Any moves to terminate or modify the current express contracts(outside of Mesa's BK) would likely be met by legal opposition from the respective carriers. The size of the new UA's war chest would likely allow them to haggle longer in court relative to their opponent and could basically serve as a catalyst for a deal being struck to reduce or eliminate service voluntarily.

UA's always has played dirty pool with feeders and there seems little reason to believe that this will be any different. Especially with capacity reductions likely and recalcitrant mainline groups needing to be appeased for the merger to go through smoothing. It's gets even more interesting when you look at what Republic has done by purchasing Frontier and Midwest. While I'm sure they haven't said much publicly about it for labor reasons, I find it hard to believe UA was anymore excited about those deals than they were when ACA bent them over the barrel in early 2002 on the FPD rate increases. Internally, they said that would deal with it in time and they most certainly did. It wouldn't surprise me in the slightest if history repeats itself there.
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