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View Full Version : Republic/TSA Merger?


moonunit
10-12-2018, 01:41 PM
I recall seeing somewhere here a few months ago someone mentioning a possible merger with TSA subsidiary Compass. And then there was the story in The Air Current publication that all of TSA might merge with Republic. Anybody heard anything more recent on that?


Av8rPHX
10-12-2018, 01:42 PM
Dead in the water. Untied shot it down.


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moonunit
10-12-2018, 02:05 PM
i had heard that too, and thought it was dead. But today hearing otherwise, but with no substantiation. Any idea why United would have opposed?


zondaracer
10-12-2018, 02:28 PM
i had heard that too, and thought it was dead. But today hearing otherwise, but with no substantiation. Any idea why United would have opposed?

Consolidation of the regional partners means less whispaw. The competition between the regionals trying to outbid each other is what helps keep costs low.

TheWeatherman
10-13-2018, 08:24 AM
Rumors are fun

flywithjohn
10-13-2018, 10:04 AM
Aside from Air Current there was zero evidence of a merger ever happening.

FlyingKat
10-16-2018, 06:28 PM
i had heard that too, and thought it was dead. But today hearing otherwise, but with no substantiation. Any idea why United would have opposed?

The deal hinged on exchanging the XRs for 175s, which required UAL to get scope relief from its pilots. UAL was unable to get this so they "couldn't support the merger" which caused the deal to fall apart for now.

This deal is dead unless Bedford decides he wants to fly the XRs long term.

TheWeatherman
10-16-2018, 06:38 PM
The deal hinged on exchanging the XRs for 175s, which required UAL to get scope relief from its pilots. UAL was unable to get this so they "couldn't support the merger" which caused the deal to fall apart for now.

This deal is dead unless Bedford decides he wants to fly the XRs long term.

So the deal hinged on UAL pilots giving up on scope? I guess it is a good thing the merger didn't go through then.

Viking6
10-17-2018, 01:24 PM
The deal hinged on exchanging the XRs for 175s, which required UAL to get scope relief from its pilots. UAL was unable to get this so they "couldn't support the merger" which caused the deal to fall apart for now.

This deal is dead unless Bedford decides he wants to fly the XRs long term.

Flight ops managers at Republic basically said the price was too high. BB only wanted compass, but it was all of nothing, so Republic walked away. I doubt Republic would go back to a mixed fleet of aircraft, unless they got a good deal.

Viking6
10-17-2018, 01:27 PM
So the deal hinged on UAL pilots giving up on scope? I guess it is a good thing the merger didn't go through then.

I just donít see United pilots giving up scope, and no regional pilot should want them too.

FlyingKat
10-17-2018, 04:21 PM
I just donít see United pilots giving up scope, and no regional pilot should want them too.

Not saying they should, but it was believed UAL would get the scope relief to match American and Delta. Long term UAL wants to replace the XRs with 175s which is what the 100 aircraft order was all about. Looks like all that is blown up for now.

JayD
10-17-2018, 08:20 PM
Not saying they should, but it was believed UAL would get the scope relief to match American and Delta. Long term UAL wants to replace the XRs with 175s which is what the 100 aircraft order was all about. Looks like all that is blown up for now.

If Iím not mistaken Unitedís scope clause is almost identical to Deltaís when discussing 70+ seat aircraft and much more generous when talking about 50 seat aircraft. The only difference so far is Delta has 717s and a new order for A220s. If United orders A220s (or E195s) then they too can have exactly the same number of 76 seat RJs as Delta (223).

It seems Unitedís scope clause already matches Deltaís, and the A220/E195 order in exchange for more 76 seat RJs is exactly how Delta got to the number of 76 seat RJs they have now. This is one of the reasons why Unitedís pilots see no reason whatsoever to give up scope and why Kirby sounds like an idiot when he says things like that (i.e. needing scope relief to match Delta and American).

What I think Kirby wants is something more along the lines of what AA has. Which at the end of the day is a similar amount of 76 seat RJs but then they could do it without adding a new fleet type. United seems very reluctant to add a new small narrow body fleet type right now. Maybe once Boeing gets more involved with the E-series they can figure something out.

Viking6
10-18-2018, 06:24 AM
Not saying they should, but it was believed UAL would get the scope relief to match American and Delta. Long term UAL wants to replace the XRs with 175s which is what the 100 aircraft order was all about. Looks like all that is blown up for now.

They never officially signed a purchase order for the 100 aircraft. The Letter of Intent isnít a purchase order, and we donít know what the fine print on the Letter of Intent says. Iím not surprised we havenít seen any additional info on this issue, because itís a great recruiting tool. Worst case for republic is being over staffed on the FO side, which will correct itself in 6 months. Our FO attrition far outpaces our captain attrition. Consolidation could mean something besides acquisition...

Viking6
10-18-2018, 06:28 AM
Heard this morning from a very reliable source Skywest was buying TSA. The Super 8 van driver said he heard it from BB himself!

Random Task
10-18-2018, 07:08 AM
They never officially signed a purchase order for the 100 aircraft.

This is what most people don't seem to understand.

KCaviator
10-18-2018, 07:53 AM
They never officially signed a purchase order for the 100 aircraft. The Letter of Intent isnít a purchase order, and we donít know what the fine print on the Letter of Intent says. Iím not surprised we havenít seen any additional info on this issue, because itís a great recruiting tool. Worst case for republic is being over staffed on the FO side, which will correct itself in 6 months. Our FO attrition far outpaces our captain attrition. Consolidation could mean something besides acquisition...

Bedford said in the email the deal would have to be finalized by the end of the third quarter. So at this point, it just looks like it was a marketing ploy. I donít expect we take delivery of a single new 175.

I also suspect upgrade times have peaked, and weíll actually see the upgrade time increase. But thatís a completely different discussion.

Longhornmaniac8
10-18-2018, 08:24 AM
Bedford said in the email the deal would have to be finalized by the end of the third quarter. So at this point, it just looks like it was a marketing ploy. I donít expect we take delivery of a single new 175.

I also suspect upgrade times have peaked, and weíll actually see the upgrade time increase. But thatís a completely different discussion.

You should start a new thread. That flies in the face of conventional wisdom, but I'm interested to hear your thoughts.

Viking6
10-18-2018, 08:47 AM
Bedford said in the email the deal would have to be finalized by the end of the third quarter. So at this point, it just looks like it was a marketing ploy. I donít expect we take delivery of a single new 175.

I also suspect upgrade times have peaked, and weíll actually see the upgrade time increase. But thatís a completely different discussion.

Most likely not planned as a marketing ploy, but theyíre certainly not in any hurry to talk about the Letter of Intent. I think youíre certainly right about upgrades inching up without growth. As a new hire I would be more concerned about FO reserve time, because reserve at Republic will suck the life out of you, especially if you commute.

KCaviator
10-18-2018, 10:42 AM
You should start a new thread. That flies in the face of conventional wisdom, but I'm interested to hear your thoughts.

There werenít a lot of new hires from 2013ish-2015 because this place was such a ****hole to work at. After the contract was passed in October 2015, it opened a floodgate of new hires. Since late 2015, there has been a massive amount of new hires come on property as compared to the years leading up to the contract.

Right now, FOs with an early to mid 2016 hire date are upgrading. But without growth, whether organically or through an acquisition/merger, upgrade times are going to increase because thereís so many more people with the same relative seniority date.

So again, without growth, I think upgrade times have peaked and will increase over the next year or so.

Longhornmaniac8
10-18-2018, 11:52 AM
There werenít a lot of new hires from 2013ish-2015 because this place was such a ****hole to work at. After the contract was passed in October 2015, it opened a floodgate of new hires. Since late 2015, there has been a massive amount of new hires come on property as compared to the years leading up to the contract.

Right now, FOs with an early to mid 2016 hire date are upgrading. But without growth, whether organically or through an acquisition/merger, upgrade times are going to increase because thereís so many more people with the same relative seniority date.

So again, without growth, I think upgrade times have peaked and will increase over the next year or so.

Makes sense. The flip side of it (and the unknown) is what will happen as mainline retirements start accelerating. We're at the very beginning of the bell curve for that, and it stands to reason that as that starts picking up, there will be more rapid, organic movement through all of the regionals, and Republic will be no exception to that.

FlyingKat
10-18-2018, 04:15 PM
This is what most people don't seem to understand.

Yep the 100 aircraft were to replace XRs and now that UAL can't do that this order is likely in limbo unless BB can find someplace else for them.

FlyingKat
10-18-2018, 04:22 PM
They never officially signed a purchase order for the 100 aircraft. The Letter of Intent isnít a purchase order, and we donít know what the fine print on the Letter of Intent says. Iím not surprised we havenít seen any additional info on this issue, because itís a great recruiting tool. Worst case for republic is being over staffed on the FO side, which will correct itself in 6 months. Our FO attrition far outpaces our captain attrition. Consolidation could mean something besides acquisition...

All of this, including the MOU with TSA was conditional waiting on all the pieces to fall into place. Unfortunately for this deal UAL couldn't come through with the final piece that would allow replacement of the XRs so it all fell apart, for now.

BB really, really wants Compass so there is always a chance this could be revisited, but I don't think there is a chance in France he is going to fly the XRs long term, and Hulas won't sell unless he dumps it all. So unless something changes or UAL magically finds a way to get scope relief, the deal is dead.

05Duramax
10-18-2018, 06:04 PM
They never officially signed a purchase order for the 100 aircraft. The Letter of Intent isnít a purchase order, and we donít know what the fine print on the Letter of Intent says. Iím not surprised we havenít seen any additional info on this issue, because itís a great recruiting tool. Worst case for republic is being over staffed on the FO side, which will correct itself in 6 months. Our FO attrition far outpaces our captain attrition. Consolidation could mean something besides acquisition...

Where are the FOís going? Any data on that?

FollowMe
10-18-2018, 06:46 PM
All of this, including the MOU with TSA was conditional waiting on all the pieces to fall into place. Unfortunately for this deal UAL couldn't come through with the final piece that would allow replacement of the XRs so it all fell apart, for now.

BB really, really wants Compass so there is always a chance this could be revisited, but I don't think there is a chance in France he is going to fly the XRs long term, and Hulas won't sell unless he dumps it all. So unless something changes or UAL magically finds a way to get scope relief, the deal is dead.

https://i.imgflip.com/2kg7ch.jpg

Viking6
10-19-2018, 06:49 AM
Where are the FOís going? Any data on that?

Mostly ULLC/ LCC, and the military guys move on to the big 6. Some also go to ACMIs. Very few make a lateral move to another regional.

KCaviator
10-19-2018, 07:27 AM
Makes sense. The flip side of it (and the unknown) is what will happen as mainline retirements start accelerating. We're at the very beginning of the bell curve for that, and it stands to reason that as that starts picking up, there will be more rapid, organic movement through all of the regionals, and Republic will be no exception to that.

Iím not trying to be a pessimist, but weíve been hearing that for years. Itís like weíre all waiting for the second coming to happen. Most of the retirements are going to peak around 2023, with United being around 2027 (I think). Donít get me wrong, I absolutely hope something happens, but when less than 10 pure-civilian pilots get hired at Delta from Republic so far in 2018, itís not exactly easy to be optimistic.

chrisreedrules
10-19-2018, 08:11 AM
Iím not trying to be a pessimist, but weíve been hearing that for years. Itís like weíre all waiting for the second coming to happen. Most of the retirements are going to peak around 2023, with United being around 2027 (I think). Donít get me wrong, I absolutely hope something happens, but when less than 10 pure-civilian pilots get hired at Delta from Republic so far in 2018, itís not exactly easy to be optimistic.

AA announced they are hiring 1,000 in 2019. They have traditionally come pretty close to their goals. The WOs arenít likely to increase the amount of pilots flowing for the immediate future (though that may change) so that means more off the street hires. AA is retiring over 75% of its current seniority list by 2032. Anyone hired in the next 4-5 years can expect a 3-5 year wait for right seat of a widebody and about 4-6 years to upgrade to CA on a narrow body...

KCaviator
10-19-2018, 09:02 AM
AA announced they are hiring 1,000 in 2019. They have traditionally come pretty close to their goals. The WOs arenít likely to increase the amount of pilots flowing for the immediate future (though that may change) so that means more off the street hires. AA is retiring over 75% of its current seniority list by 2032. Anyone hired in the next 4-5 years can expect a 3-5 year wait for right seat of a widebody and about 4-6 years to upgrade to CA on a narrow body...

Those numbers look good on paper, but reality says something else. 10 people from Republic have been hired at AA this year, and all of them are prior military.

TheWeatherman
10-19-2018, 09:56 AM
Yeah, but those numbers mean nothing unless they are compared with other non wholly owned Regionals

OffAtTango
10-19-2018, 11:39 AM
"In addition, the Company continues to work on finalizing its recent LoI signed at the Farnborough Airshow for 100 E175 aircraft for Republic Airways, with the expectation that a significant portion of these jets should enter the Company's backlog by the end of 2018."

https://www.prnewswire.com/news-releases/embraer-delivers-15-commercial-and-24-executive-jets-in-3q18-300734282.html

Also looks like Skywest backed out of its order of 100 175 E2's.

TheWeatherman
10-19-2018, 11:43 AM
"In addition, the Company continues to work on finalizing its recent LoI signed at the Farnborough Airshow for 100 E175 aircraft for Republic Airways, with the expectation that a significant portion of these jets should enter the Company's backlog by the end of 2018."

https://www.prnewswire.com/news-releases/embraer-delivers-15-commercial-and-24-executive-jets-in-3q18-300734282.html

Also looks like Skywest backed out of its order of 100 175 E2's.
Yep, looks like United was counting on scope release and backing Skywest and Republic to order more ERJs. I think United saw the writing on the wall that scope release just isn't going to come. Ooops, too bad so sad :(

amcnd
10-19-2018, 12:51 PM
"In addition, the Company continues to work on finalizing its recent LoI signed at the Farnborough Airshow for 100 E175 aircraft for Republic Airways, with the expectation that a significant portion of these jets should enter the Company's backlog by the end of 2018."

https://www.prnewswire.com/news-releases/embraer-delivers-15-commercial-and-24-executive-jets-in-3q18-300734282.html

Also looks like Skywest backed out of its order of 100 175 E2's.

Read the whole article...

A total of 134 jets were removed from Embraer's backlog in 3Q18. The majority of these planes belong to an order placed by Skywest for 100 E175-E2s, and were removed largely due to IFRS accounting changes. Given current timing uncertainty of the scope clause changes in the U.S. market to allow the heavier E175-E2 to be flown by regional airlines under capacity purchase agreements (CPAs) for mainline airlines, Embraer has proactively adopted best practices to align with the latest IFRS principles and remove the order from backlog given its conditionality terms. Skywest remains committed with the E175-E2 order and its terms are unchanged.

Tpinks
10-19-2018, 03:15 PM
They never officially signed a purchase order for the 100 aircraft. The Letter of Intent isnít a purchase order, and we donít know what the fine print on the Letter of Intent says.

This is what most people don't seem to understand.

There are essentially four levels to aircraft purchases.

* Firm order: Production position(s) are set, down payment(s) are made, pre/production payment(s) are made, final payments are made at delivery and ownership is transferred.

* Letter of Intent: Production position(s) are normally set (either a hard position or a range) with a date to firm the production slot by. A down payment is normally made and production payments do not start until the production slot is firmed. Then it follows the path of a firm order.

* Memorandum of Understanding: similar to an LOI but with looser terms. Normally a wider range of time for production slots to be firmed and normally minimal or no payments are made at signing. Productions Positions that were set are not hard positions, so if someone else comes in and makes a large order, it can bump the MOU planes.

* Options: Commitment to a given number of additional airframes past the initial airframe amount. These options can be assigned production slots or date ranges and will receive the same pricing preferences as the initial order. Normally a small (overall) monetary fee is paid by the airline when they order options.

In the last decade, with the rapid expansion and massive orders being placed, there has been some muddying of the waters when it comes to how a Firm vs LOI vs MOU order is considered. It has become less cookie cutter and each deal is tailored more and more for the individual need.

It depends on the individual airlines, but typically you see LOI's used when a massive order is announced but the carrier is either financially or operationally not in a position to firm the order upfront. This would include us on possibly both ends, but I would assume more operationally.

For example, American Airlines initially ordered 787's in 2008 via a LOI. It was rumored within the industry, they had 22 months from the date a specific airframe was set to begin production to firm it up. It was not until Jan '13 that the 787's were firmed for delivery in Dec '14. This excessive delay in firming was due in part to the delays to the 787 program.

So while our initial report was that they were to be signed by end of third quarter, it does not mean since it has not happened yet that it is completely off. It also does not mean that deliveries can not commence as it was originally announced.

Contrary to Flyingkat's assertions, there has never been anything said nor have I heard any rumor about these 175 replacing 145's. The timeline to cross the hurdles to allow 175's to replace 145's does not match up with the proposed delivery timeline that was initially said.

If anything, I would say these would be used to replace CRJ-700/900's operated by other carriers or our own 170's before any 145's. Mesa's CRJ700's are up for renewal next year as well as some of their 175's. Mesa's AA CRJ9 flying is also up for renewal I believe as well. Gojets is also in a position to lose at least some of their CRJ7's. The 25 UA 175's are still up for grabs as far as we know (Expressjet CBA can be satisfied by shifting Skywest 175's to them), so we still don't officially know where those planes are going and who will be losing the CR7 flying they are replacing.

I personally do not believe the aircraft order is directly tied to any merger. If it is, then there would be no need to be hiring 100 FO's per month. The push on hiring says these will be growth aircraft at the expense of another carrier(s). Any 145 for 175 swap, if one should ever occur, would not be done on a 1v1 basis either, so in a merger we would be overstuffed in that case, again no reason to be pushing 100 new hires per month.

This is all, of course, me reading between the lines.

Longhornmaniac8
10-19-2018, 05:10 PM
The data are pretty readily available on the APC profiles of the legacies. 200 pilots retired at AA in 2017. At least 3 times that will be retiring each year between 2021-2027, with an effective 3-year peak between 2023-2025.

Delta retires 350 pilots in 2018. At least twice that will be retiring each year between 2021-2025, with at least 500 retiring each year until 2030.

United retires fewer than 100 pilots in 2018. At least 500 will retire each year between 2023-2032.

Southwest has a long ramp up until they peak in 2035, with not much difference in the preceeding 7-8 years.

We are at the very beginning of the bell curve. Be patient. [emoji846]

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