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. BTW, all I have seen is a "stock swap" deal if/when CAL/UAL get together, no buying going on. A merger of equals.