This is a paradigm shift from the strategy of a year ago. As Scope hasn't changed, it's purely a new management direction; one that falls in line with Kirby's MO from what I understand from my friends at AMR.

UAL looked at the C-Series and ended up buying the 737-700 instead knowing full well they wouldn't be able to unlock the full potential of their scope agreement. Why? Because Boeing gave them to us for so cheap we couldn't afford NOT to take them. So what's changed? I can see not wanting the CAPEX right now. But I also noticed that they are now saying that the MAX would be "bigger" so I'm guessing they will be MAX-8 or more MAX-9's. This does seem to open the door to a SNB order in order to unlock the additional RJ's. I'm guessing it's not the economics that are driving that change, but our new management adds as the economics haven't changed significantly since the recent order for the -700's.

My guess is what this means is that the transition of capacity from UAX to UAL will be greatly reduced under Kirby and Levy. More RJ jobs. Less Mainline jobs. Back to the old strategy.

 

My concern about that is that I HIGHLY doubt you will see UAL Corp increase growth beyond what they have previously announced. With the 100 seater, they can order more 76 seat RJ's so they can meet their capacity numbers with less mainline aircraft. This is an unfortunate development. Included in the article is an announcement to purchase more of the 76 seaters they were going to lease and place them with the regionals. Seems we are doubling down on the regional side of the operation. A Kirby signature

 

The only thing I can think of is if, and as always it's a big if, they want cheap used airplanes that allow them to maximize scope is the E190.

When DAL bought the C-series they backed out of the used Air Canada 190. So there are 20 of these for cheap. Jetblue has some orders coming up they (at least when I worked there in 13) said they would like to sell the new ones or sell the old ones as they get the new ones....I believe it~25. And finally Americain said they are not keeping the 190....20 more. That's 65 used cheap airframes that gets them ~40 more e175. Plus you already have a team of contractors for maintenance (all the E175 operators) while we get our program up. Sims that can be used and probably one of them has a program that we could buy to get training up and running quickly.

Or they are going to buy a few used 737 and 320 aircraft every year to fill the need.

I don't think this is a bad idea but it was nice looking at mainline growth. Now it's back to guessing what they are planning.

 

Canceling the 737 order is the first step in buying Jet blue....

 

The company's press release and aircraft deferral haven't changed a thing with respect to CBA's Section 1 "Scope Choke" language. I'd bet that there are a few ALPA volunteers doing a airframe and block hour ratio count. If it came down to it, how do you think ALPA would do in that grievance given their recent track record?



As of today, 76 seat jets at UAX are capped at a max of 153 airframes and 120% of UA single isle block hours.

 

No, it's the second. The first was pulling out of JFK.

 

Converting the 737-700 to Max 7's would represent an upgauging since I think the latest iteration of the Max 7 will actually now be a shrunk Max 8, seating about 12 extra seats compared to the 700.

But I do think that US airlines are looking at a slowdown in the travel market for at least a few months or even years as foreign visitors, both tourists and university students, digest the changes in the US political system. If the new administration imposes tariffs on China I can see part of their retaliation taking the form of a curtailment on releasing foreign exchange to support the large number of their students in US universities. I think at last count there are over 1MM foreign students at US universities of which 60% come from just 4 countries: China, India, South Korea and Saudi Arabia. If things are perceived as being less safe for a ''foreign'' looking or sounding person in the USA, I would expect a reduction in the number of the ones studying in the USA. I can see airlines wanting to be a bit cautious about growth plans.

 

What about the Virgin Airbuses coming to United and some of those 737 orders go to Alaska? Just a theory or possible scenario.

 

Don't tease me!

 

I think this is great news. United doesn't control the economy and with so much uncertainty under trump - slowing growth to free up more money is a very wise move. I want just as much to read into all this but that's a mistake.
As for 50 seaters staying longer; I believe a lot of their retirements coincide with lease experations so I wouldn't expect to see that happen.