UA/CO merger effect on regionals
 

Looks like a CO UA merger could be announced on Monday.

United, Continental Move Closer to Merger - WSJ.com

Just wanted to get everyone's take on what this will mean for the various regionals involved with the two airlines. Who stands to benefit? Who stands to lose out? Could this complicate Mesa's bankruptcy?

Slappy will be right with you.

Mesa might end up without their 70 seaters. I think the airlines that will win are going to be Skywest, GOjets and republic. The reason being is that UAL/CAL will want to add as many 70 seaters as they can as soon as they can and GOjets and Skywest have the lowest costs in the industry for 70 seaters.

The airlines that will probably lose will be Trans states and Expressjet. I see Trans states losing out since the growth will be on the 70 seat side and the whole mess with them and gojets will complicate things. I see expressjet worse off out of anyone, I say this because they will have the biggest piece of the pie at about 240 50 seaters, and I think that can be cut down when parts of their contract come up. Didn’t their cal contract say that the 215 planes they have now can be taken down to 190 or something and didn't their UAL contract state that their 30 can be dropped down to 20? Expressjet will have more 50 seaters flying for UAL/CAL than all the other airlines’ fleets combined. That and CAL has made it their mission to screw expressjet at every turn and now that CAL management is taking over UAL I don’t see that changing. The 50 seater is an obsolete airplane and the growth will come from the 70 seaters. If I was expressjet I would be getting some 70 seaters soon but I given their cost box I doubt they would be able to compete with the rest.

I see UAL/CAL making deals with airlines like Tran states and Skywest to swap our their 50 seaters for 70 seaters. Skywest only has about 50 or so crj 200s that fly for UAL and I don’t know how many Tran states has but I’m sure it can be done.

That's the million dollar question. It all depends on a joint contract scope. If we get CAL's scope, then you might actually see UAL/CAL recall some furloughees and maybe even fly E-170/190. If Tilton & Smisek get their way, you'll see another 2,000 CAL/UAL furloughees, another 150 parked 737s, and a booming RJ industry.

I doubt that the scope will be reduced to 50 seats again. That would just destroy the new airline, they have become dependant on 70 seaters.

I know about 12,000 CAL/UAL pilots who want to add as many 70 seaters as they can at mainline. I'm not wishing any ill towards RJ guys out there, but if I was king for a day, anything over 50 seats would be flown by mainline. Anything flown from a major metropolitan area would be mainline. Anything flown long distance would be mainline.

Let me get this straight... keeping 50 seat scope would "destroy" the new UAL? From my perspective, 70+ seat scope is what ruined the current UAL. Just think, after the CAL/UAL merger, the new UAL will be nearly as large as it was 10 years ago.

I value your right to free speech... but seriously, do you THINK that the new UAL will maintain 70 seat scope, or do you HOPE that the new UAL will maintain 70 seat scope? There's a huge difference between the 2.

Oh that's not the CAL way. We park the biggest airplanes and fly one airplane too small on all of our routes. We love to see how far we can fly a 737. :)

slappy I think your wrong on this one. Look at the leverage that the unions have in how smoothly the merger process goes. NWA/Delta worked so well because the pilot group played along and really helped it move forward at the pace it did.

Now I hope the pilot groups will use that leverage to regain the +50 seat flying, but more likely they will use the lever to cap the current number of 70+ seat a/c at or maybe even slightly below current levels. My guess is there will be no room for any growth in the 70+ seat market.

I agree that the 50 seat regionals will get hurt in this. Again look at the delta merger. Most of the competition between these companies comes from using 50 seat a/c in the smaller markets to hit the hubs. Why would you continue to run 2 50 seat regionals 1 to CLE and 1 to ORD at the same time when you could run 1 larger a/c to ORD. That is exactly what has happened with the delta merge. The regionals are where all of the job loses occured.

Maybe you are right, but as someone said before about UAL/CAL doing away with all current 70 seaters, that is just not possible. That would be too much of a financial shock for the new airline.