Is the fog clearing?
Boeing forecasts that over the next twenty years airlines will have 36% more aircraft (including retirements) and no growth in the regional market. 50 seat aircraft will be nearly eliminated, 70 seat aircraft will be reduced by approximately 40%. These losses will be replaced by 90 to 110 seat aircraft. UCAL will soon cancel the A350 orders and replace them with an all Boeing order. UCAL will be an all Boeing entity. The only exception will be approximately 125 Embraer jets. While scope restoration may sound like a good deal, it is a throwaway for the company and a great bargaining tool for a concessionary contract. (While 30% pay raises may not seem concessionary, they are certainly concessionary considering what has been given away over the last 25 years. Also, 30% only accounts for 6% of the additional revenue synergy of the combined companies in a recessionary environment - a great bargain for the company.) The operation of 50 and even 70 seat small jets are not part of the new business plan going forward. In time they will all be gone. However, the TA will show 70 seat scope restoration, it will not add a single job as the "wind down" time will eventually see all that flying going away. That flying will never go mainline, it will just go away. I mentioned 3 regionals going away in the short term. One has gone, another is going and one more will be gone in the next six to nine months. Over the next 5 years, seven more regionals will be gone. That business model is over. UCAL wants desperately to make these announcements yesterday but can't do it until there is a JCBA, as all bargaining power will be lost. (As it is they have so little.) What has changed over the last few weeks is that your union is starting to get wise to this and is starting to take a firmer stance and is now saying that they are not so interested in an October deadline for the sake of it. Surprise, surprise. Work rule restoration (all furloughees back by summer 2011) and scope is done. Now the compensation numbers are rising and will continue to rise as news continues to leak of UCAL's business plan going forward. (This is too big an animal to keep under a hat). That is why they are so desperate to wrap this up ASAP. They are under enormous pressure. We've gone from 25% to 30. And now the target is 40% with a restoration of contract 2000 wages by the conclusion of the contract 2015. Stay tuned.