United's used aircraft speculation article
 

What used aircraft could United buy? - Airline Business

What used aircraft could United buy?
by Edward Russell on 28 October, 2014 in Airlines, Americas
United Airlines is on the market for used aircraft with a focus on narrowbodies to replace its rapidly shrinking fleet of 50-seat regional jets.

The move comes nearly two years after the Chicago-based carrier’s pilots ratified a contract that allows it to add a “new small narrowbody aircraft” to its mainline fleet and more than a year after it announced its first order for E175s as part of a plan to replace some of the more than 300 50-seat regional jets in its Express fleet.

A United Express Embraer ERJ145. (United Airlines)
A United Express Embraer ERJ145. (United Airlines)
John Rainey, chief financial officer of United, said the airline is “too reliant” on the small jets and that buying used aircraft allow it to replace some of those 50-seaters in a “financially disciplined way”, during an earnings call on 23 September.

The airline has already purchased two used 737-700s from lessors, he says. It also has plans to add another 101 E175s to the 19 in its regional fleet at the end of September by 2017.

What other aircraft could United buy?

George Dimitroff, head of valuations at Ascend, says that likely candidates are either used Airbus A320s or the 20 Air Canada Embraer 190s that are coming on the market beginning next year.

“A320s could be more available [than 737NGs],” he says. “Since supply of new ones has dried up, airlines have started absorbing older A320 inventory. As the A320neo is due to enter service sooner than the 737 Max, I could see more A320s becoming available in the next three years whereas NGs should remain tight through to the end of the decade.”

A United A320. (Edward Russell)
A United A320. (Edward Russell)
United could use the A320s on routes flown by smaller Airbus A319s or 737-700s, which could then in turn take over routes flown by 70- and 76-seat regional jets freeing those to replace 50-seaters as they exit the fleet.

The carrier configures its A319s with 128 seats, A320s with 150 seats and 737-700s with 118 seats.

There are 117 A320s in storage around the world with only 18 bound for new operators, the Ascend Fleets database shows.

“If they plan a multiple aircraft acquisition, Air Canada is the most likely source,” says Dimitroff. While narrowbodies that are already in United’s fleet are its focus, Rainey does say that the E190 is on its “radar”.

An Air Canada E190. (Air Canada)
An Air Canada E190. (Air Canada)
The Montreal-based carrier will shift 10 E190s in 2015 and 10 in the first half of 2016 to Boeing, as part of its order for up to 109 737 Max aircraft. The airframer is responsible for either leasing or selling those aircraft.

There are another 13 E190s in storage with eight of them potentially available for lease or sale, the Ascend database shows.

There is always the possibility that United could acquire used A319s, more used 737-700s or another type of narrowbody aircraft. Ascend shows that there are 33 A319s in storage with 21 potentially available for lease or sale and 19 737-700s in storage with six potentially available.

With at least 101 50-seat regional jets coming off contract in 2015 and deliveries of only about 53 E175s scheduled that year, United needs to move fast in order to maintain its capacity targets as it continues to reduce its reliance on small regional aircraft.

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That would be welcome news!

The 101 EMB175s ??? Awesome , maybe, if United pilots are flying them.

With the E190 top CA pay of $135 / hr :eek: (starting 01/2015) that will make for some pretty junior captains..
Also 1st and 2nd year fo pay is the same :eek: no raise for new hire until year 3 if hired and stay on the E190!!

Don t get me wrong, I d rather see more planes for mainline but this pay sucks..

Wow...guppy boy f/o pays more...go figure that one...what is jet blues 190 Cappy rates.

Why not just buy Frontier? You get 60 A320 series and increase market share/eliminate a competitor in one of your hubs.

No one in the top 6,000 pilots will bid it most likely since 12 yr FO on a narrowbody pays more than this and probably better schedules than these would have.

This is more of a "future job security" than benefiting most of the pilots because almost no one on the property is going to bid these except for pilots hired in the last few years that want to be a Captain on something sooner.

I predict virtually no existing seniority list pilots bid FO on this, that it be the fleet the new hires go to.

If we get them that is.

IMHO, three reasons for UA not to buy FR:

1) It's not exactly a common fleet (FR has different motors than UA)

2) One can lease 60 used Airbuses for the same market rate that FR is paying but without the expense or complications associated with buying an entire airline. Why buy the cow when there's plenty of milk on sale?

3) Potential anti-trust issues with dominant DEN market share

I was more blindly thinking the airbus and 737 would be the ones they want. The E175 are probably inevitable and I see management giving those aircraft to regional operators up the the contractual scope limits. Just like Delta does. Hopefully American pilots hold the line on scope or pushes it further down. Mainline needs to be flying these routes with mainline equipment even if they are E190s. In the end it will be better for everyone and the profession.

Who cares!!! Just get them at mainline!!!

^^^^^^This!^^^^^^

So if the pay was halved again that would still be OK? I care, and I'm junior.

We need to stop allowing companies to pay us LESS and rationalizing why its OK to do so. We make half of what we used to if you look at the entire compensation package. Sure, we need the planes but not at any cost. The current 190 pay rates are just a continuation of the B scale.

I'm not going to disagree with you, but I think these all aren't that big of an issue...

1) When you have fleets that big, common engines don't really matter. Plenty of airlines do just fine with mixed engine fleets.

2) Yes, you probably could, but there aren't 60 used Airbuses out there for immediate lease. Thats seems like its the original problem here.

3) Even with FR and UA combined, it'd probably be lower total market share than a lot of other fortress hubs thanks to WN and all the other airlines at DEN. And I'm sure they could give up some assets here and there to make the government happy.


Not saying its the solution, but seems to me like at neat idea at least.

Jan 2015, per the UAL CBA;

EMB190 CA 1st year-max out: 124.26-135.36
190 FO 68.08-92.44

JB, 2015

JB 190 CA 1st year-max-out 131.10-176.09
190 FO 49.56-119.72

Granted, UAL 195 rate is HIGHER, but doesn't meet the JB rate.

I agree with the mantra, "just get them on property!!!!!!" I'm ALSO smart enough to know that "it's not ALL about the hourly rate". DC, 401K, health insurance, career/income progression at a company with MULTIPLE fleets on property vs. 2, whatever.

But again, the mantra at a legacy is "WE HAVE TO HAVE EVERYTHING BETTER THAN A LCC!!!!!!! EVERYTHING!!!!!!"

But I would NEVER disagree that the UAL rates SUCK.

90% of all passenger departures out of MSP are Delta. That's not a monopoly?

It absolutely is and NWA got away with buying Republic years ago so in practical terms NWA was "grandfathered" and DAL was able to keep MSP intact when they bought NWA.

Not so much the case for more recent mergers, with perhaps the best example being the slot swaps on the east coast that resulted from the AA/USAir merger. Heck, even UCH had to give up some EWR slots.

the rates we have at airways are dreadful , and APA doesn't care to burn negotiating Power on new ones. A delta 717 holds what 10 more people? Shoot for their rates.

Just get them on property guys.

But if we get them on property scope choke proved to work. We have guys that rather prove ALPA wrong than get jobs at mainline.

All the NO voters who said the SCOPE section was too weak. Then they won't be able to complain about SCOPE in the next contract and they will have to find something else to complain about.

Umm...we are all pilots. We always find something to complain about...

I am/was complaining about the 175. How many of those are not going to mainline because we gave up that scope? The 50/70 seaters killed themselves and were going away anyway. We just gave relief to the company and Skywest etc... By giving away larger aircraft (the 175). I do hope we see the 190's or larger.

When it's finally apparent the regionals can't hire enough pilots to fly the schedule contracted for, we have a chance to fly them at mainline.

As a pilot that spent a decade at the Regional level, I believe that scope it the most important issue with regards to a CBA. I think that it's more important get the flying to mainline and then we can eventually get the pay rates. I think that it's a bit myopic to pass up on the flying because the current pay rates are low. We need to begin to take our flying back and get the jobs at mainline!!!

Pilot payrates aren't the problem. Its putting the airplane under United's cost structure. Not just pilots, but Flight Atttendants, Rampers, Maintenance, etc. To get that flying we would have to make significant cuts across our CBA to subsidize doing that flying.

Man, how did our negotiators get the 190 rates so wrong? As a junior guy, it upsets me. It would really stink to get displaced to that pay rate and take a $40/hr pay cut.

I agree that pilot rates aren't the problem but strongly disagree that pilots would ever have the need to subsidize. Airlines took advantage of pilot agreements and farmed the flying to the lowest unit cost.

When the feed is too expensive, unreliable, uncompetitive or which other metric is important at the time, the flying comes back. Combined with restrictive scope language, the company can serve marginal markets but it's up to the pilot group to keep/strengthen restrictive language that makes the economic formula favor mainline pilots on a given route.

I completely agree! I understand the costs associated. All I was trying to say is that if UAL is going to convert the flying to mainline, we shouldn't balk at it solely because of how low the current pay rates are.

Which is part of the problem. We have guys that say "Get that flying now and we will deal with payrates etc later" and then we have guys complaining that the E-190 pay rates are too low and how we screwed that up.

So which is it? We aren't going to have it both ways. I see the problem being that we are still below C2000 payrates, and this does not even take into account inflation. Fix that first, then deal with E-175 being on the property.

United is paying for and owns the new E175s going to express

Anyone know which carriers are getting the planes?

As far as the one's UAL is writing the check for, MESA for sure. I'm not sure on the SkyWest ones.

Which are much cheaper to operate under their cost structure.....

IF memory serves me correctly, UAL HAD the 175's negotiated....that is until DALAPA caved on their scope earlier that summer. Is was THAT event, realistically, that sealed your fate, vis' a vis' Pucela drawing the line on scope. Thank DALalpa.

NOW is the time where all THREE MEC's (DAL/UAL/AA) need to have a serious discussion on scope where EVERYBODY is on the same page before anybody's section 6 goes ANY further. Otherwise, all we will have is a repeat of the past

Maybe I'm crazy but getting displaced to the street would stink way worse. Cutting these aircraft (175,190) loose to fly under the whipsaw at the regional level benefits nobody except management and senior guys looking to sacrifice the junior pilots and the profession for a short term financial gain.

As somebody who is still at a regional. Please keep the mainline flying!

Your memory isn"t serving you correctly. DCI was already operating the 175s prior to C12. While the company was allowed to add to the number of 76 seaters, they also had to park over 100 50 seaters and something close to 5000 pax seats were moved back to mainline with the 717s. Overall the DCI RJ fleet shrunk. As it is, management hasn't even reached to full allowed number of 76 seaters and has no plans to actually reach it. They would rather grab every 717 in the world they can.

Ok...I stand corrected. You mean to tell me DALALPA allowed 175's with76 seats BEFORE C12? Or did they allow 70 to grow to 76 during C12 negotiations?
The type aircraft is is not as relevant as the number of seats installed.
In any case, DALALPA's C12 new scope language did affect UAL ALPA'S position during their section 6.

Everyone knew the 50 seat economics were unsustainable. Bargaining for their departure seems like a waste of leverage.

I'm not DAL but was a DCI guy, we flew the crj900 with 76 seats before C12. What that contract did was eliminate a lot of 50 seaters and put a cap on the total number of RJs flying for the DCI system. But it also allowed a greater number of the larger RJs (crj700 and 900 and the E170/175/190 with a seat max of 76). Lots of regionals flew around with 70-76 seats (compass, Skywest, ASA, mesa, comair, republic, etc). Overall a decrease in the number of airframes at regionals, just allowed a greater number of bigger airframes that were already allowed.
Pretty good balance in the scheme of things since flying goes to mainline but regionals aren't furloughing in droves to achieve it and a lot of those guys are getting to the big leagues.

Thank you for the synopsis. Like I mentioned before, whatever was agreed upon in Delta's C12 contract affected the bargaining position of UAL's pilots, and not in a positive way. My take away, after 20 years, is that the Delta pilots seem to be at the forefront of allowing scoped seats to increase.