Originally Posted by
187fw
The instructor discussed this today in RGT, I was wondering if anyone else had some insight/thoughts in this area:
Is it true that if/when the UAL/CAL merger takes place, CAL's scope on XJT's 50 seaters will be null and void since UAL does not hold their United Express carriers to the same restriction? This would then allow XJT (or soon to be ASA if the merger goes through) to operate aircraft with more than 50 seats under the new UAL? If this holds true, and the demand is there, then would XJT be free to acquire ERJ170s and ASA operate CRJ700/900s under the future UAL?
It's NOT true. A basic understanding of how contracts work will clarify it:
CAL's "scope clause" is in their contract, and allows nothing over 50. UAL's "scope clause" does. The merger means they will have to
negotiate a joint contract, incorporating the two. Now both MECs have stated publicly that they want to eliminate ALL outsourcing, which I think everyone sees as pure posturing. My prediction is that they will freeze the current numbers above 50 and not allow them to be renewed when they expire.
However, in a merger, contracts do not become "null and void"!!!