CAL/UAL merger and scope clause effect on RAH
 

I know I used the word "merger" in the title but this isn't so much about the financial health of the companies and isn't directly aimed at the pilot group. This is about a regional carrier so I've put it here in the regional forum. I haven't seen it posted here yet so figured I'd throw the discussion out there.

RAH flies E-Jets for UAL under contract. Just like when TWA was purchased by AMR they had to take CHQ along in order to honor the contractual baggage that came with TWA. If CAL purchases UAL, which is what's expected, can we expect the UAL contract on the E-Jets to be a means to dodge CALs scope clause?

NO. I'll fight for all jets flown by CAL/UAL pilots. That means hiring the regional guys. Of course, the pay would go up too. No more jobs at the regional level, create major jobs. :)

That's complicated...the merged entity would have to honor ALL existing obligations on both sides. That includes the CHQ contract and the CAL scope clause.

They would most likely have to negotiate with one party or the other and make a deal...ie buy out CHQ's contract and park (or re-assign) the e-jets or give concessions to CAL-ALPA in exchange for keeping the existing e-jets, but not allow any new e-jets.

Another factor is how the UAL/CAL integration occurs. I'm sure they will keep the UAL name and certificate, and over time move CAL planes and pilots onto that. This will require essentially a new contract covering all AUL and CAL pilots...presumably during the negotiation phase they would work something out.

But until they actually merge certificates and seniority lists (which could take years, see exhibit #1: US Airways), the e-jets could continue to fly for UAL.

UAL likes the E-Jet ..... it stays in play in my opinion.

Cal would love the E-jet also, but we won't allow it unless it is flown by our pilots. With a merger I don't know what will happen.

UAL also liked mesa...so that says nothing

I hope you're right Otto. We know where I want to end up and I'd like to see more job openings at CAL.

CAL ALPA's scope should remain in force, even in the event of a merger...unless they sell that, which I doubt.

One could reasonably surmise that *if* this merger happened a joint UAL/CAL ALPA CBA would allow no more than the currently contracted number of 51+ seat "regional jets" currently flying under the UAX banner. No growth in those airframes at the combined carrier, and once signed contracts expire those airframes would go away.

Mergers are the only way mainline pilot groups will be able to reclaim the scope they have previously sold...and will likely also be a tempting time to sell more to achieve greater pay/retirement gains. I hope they've all learned from recent past...

Until we have a copy of the fee per departure contract (which isn't public to my knowledge) we'll just have to wait and see if there are escape clauses triggered by change of control. Beyond that it's just speculation.

The focus of a merger is reduce competition, increase pricing power, and increase efficiency (that's market synergy if you're an MBA). In a merger of any two companies, there will an attempt to remove overlap. In the case of airlines, a fee-per-departure agreement will receive scrutiny as they are not as attractive with oil at $110/barrel.

I think the bottom line is this: what is the value of feed to the combined network considering fee-per-departure agreements with 100% fuel pass-through? Unfortunately, the answer to that question won't be public, and we'll have to wait for the press release like everyone else should the benefit of feed agreements change.

From a CBA perspective, you can be sure that a combined labor force will attempt to strengthen scope.

Great, only it will be called UAL. :D BTW, all I have seen is a "stock swap" deal if/when CAL/UAL get together, no buying going on. A merger of equals.

Its interesting to see how this plays out. I think the scope is something CAL management would love to get rid of. The question is what will be the carrot the dangle in the face of the pilot group Money PBS........Only time will tell. I hope the CAL pilot put up a good fight and get the ball rolling on better contracts despite fuel prices.

You are correct sir. Currently UAL nor CAL have enough cash value for one to acquire the other. It would be a merge of equal sides, not one purchasing the other like the DAL/NWA deal.

To be clear, NWA/DAL was also a stock swap, which is good because it means no debt. DAL is not paying cash for NWA's shares.

NWA had around $5billion in cash at the end of 2007 with DAL having a $6.25bil.

DAL isn't strait out buying NWA they are "merging" which takes a different route. CAL and UAL aren't looking to acquire each other. They are looking to merge as DAL and NWA did. I'd rather see a CAL paint job on the planes.

This is true

We'll compromise. We are going with a fleet of Peter Max's. Man that is awful.

http://apollomaniacs.web.infoseek.co.jp/model/pmaxl.jpg

Good Lord that looks like something the Teletubbies puked up

I threw up in my mouth a little bit when I found out we paid the "artist" 250 grand to imitate Teletubby puke.

Man you guys could have done it for the cost of free beer and BBQ to have some CAL pilots come out with some paint brushes. I'm sure there is some stiff on Sutton St. in NYC that thinks its a masterpiece.

Yup if they are going to work on the scope they need everything over 50 seats out the window. Get that Q400 out of there.

We can always hope...

But it will be tough going...Now that the genie is out of the bottle it's not going to be easy to put it back. All of the competion has larger outsouced RJ's, so any mainline manager will complain that he is at a competetive disadvantange operating RJ's in-house...and it would not be a lie.

How many CAL pilots want to fly the 170? My guess is zero. Not trying to start a ****ing match, but I do not think the mainline guys want to sit in that plane.

I don't want to but I don't want to out source my job either.

Why not? Are they too good for it?

Let me take this a step further. Are there any mainline guys willing to fly the 145? Forget all the regional guy who flies it now. The regional guy will say yes, cause it means a seniority number at mainline. I am talking about right now, if CAL said no more Express Jet and no more Colgan and no more Chautauqua, will the mainline guy fly the 145?

You'd think they would have learned their lesson after the lasttime they gave up scope :rolleyes:...

Yes, I bet they would....and doubly so if the option was fly an RJ or have that flying outsourced. I think the days of people being "too good" to fly small jets are over with.

That said, they'd have to re-arrange the payrates...the 170/175 or even the 145 in the CA seat likely have to pay at least a little more than the 777 in the FO seat.

and thats not gonna happen..... thats sorta the reason we are where we are in this business.....

therein lies the reason it will only ever get worse not better!

Hopefully if you ever see this its with CAL pilots flying it.

http://i43.photobucket.com/albums/e3...xemb1704vd.jpg

Assuming the merger is announced this summer, the merger itself could take up to 2 years to be completed. The landscape could change dramatically by then. A few regional feeder contracts on both the CAL and UA sides are coming due in the next couple of years.

So I say this, all of you guys out there salivating at the chance to fly an E-jet under a coex banner...well, don't hold your breath. Merger or not, the E-jets will hopefully go to mainline a la USairways...they're called 190's, more fuel efficient and better economics than it's smaller relative (the 170).

I can tell you for sure, that most mailine guys learned their lesson, and they're not going to roll over on scope because management tells them it's "grandfathered" from UA.

What's ironic is when RAH's last contract was negotiated, scope was where it was at. If it wasn't for our scope clause, the 50 seat drivers would be out of a job. As it stands, they are still the majority of pilots on the RAH seniority list. That leads me to my point:

Scope is the most important playing card pilots have in their pocket. Protect your scope and you protect your job. I could care less how big the jet is...the smallest jet at a legacy carrier beats the biggest jet at a regional carrier any day. The industry ain't what it used to be...but it's better towards the top than it is towards the bottom.

The smart play in a CAL/UAL merger is this (pretty much what BoilerUp said...he's the smart one around here): let the carriers with contracts for 51+ seats play out their contracts. At the end, they waste away and are picked up by mainline pilots. So you go from a 737 to a E170...guess what?! You still have a friggin' job.

Aw, shucks...:o