UAL still paying regionals 100%?
 

Rumor floating around United is still paying 100% of salaries and money to some of the regionals. So the regional getting CARES moneys and also united monay.

why would they do that? To hide cash at the regionals (holy owned like XJt) then renegotiate concessions at mainline claiming theyre out of cash. Later they can get that cash back because they own XJt.

Anyone hear that? If so then someone is playing some big games in willis towers. Reminds me of the Dick Ferris CEO in the 80’s who bought a bunch of hotels and started funneling cash to hotels from the airline. Charging the airline the maximum rate. Then went to pilots and claimed he needed concessions.

UAL is probably paying their regionals as defined by their CBAs. XJT is not a wholly owned of UAL. UAL does not have a wholly owned.

No it’s says Holy Owned, the Vatican really is the group behind Mana Air. Man(n)a from heaven? ;)

Are you saying they fly on a wing and a prayer? (Sorry I could not resist.)

UAL doesn't own any regionals (owning an equity stake is not the same as control ownership).

UAL has contracts with all of it's regionals for X amount of block hours. Those contracts have options for the purchase of additional block hours.

UAL typically exercises the additional block-hour provisions.

Also some regionals do additional "at risk" flying, using the UAL marketing system. The regional pays UAL a fee and pockets the rest of the revenue.

Right now UAL is contractually obligated to keep paying the regionals for their minimum baseline block hours. So in that sense, UAL is still paying regionals, similar to all of us getting guarantee instead of the 80-90 hour lines we're used to.

UAL is not exercising any options for additional block-hour purchases, and I'm sure that most at-risk flying is stopped right now. So regionals are probably not in the black, like many pilots they depend on "overtime" to profit.

Regionals are still eligible for CARES money. So some regionals might well be getting their contractual "guarantee" and also CARES money. That's legal per CARES, it is a very blunt and lopsided instrument (had to be, to get it done in time).

For the majors, the CARES money might barely cover payroll (if enough folks take VLOA / IL / Early Out). But none of them will really bank any additional money since their revenue went to near-zero

Regionals on the other hand might be able to bank CARES money to help with their recovery, since most regionals revenue did NOT go to zero, but rather to "min guarantee". At least until a major partner declares BK.

According to the last earnings call SKYW waived their partner FPD minimum block hours.