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CO/UA Venture In Jeopardy?  
User currently offlineapodino From United States of America, joined Apr 2005, 4125 posts, RR: 6
Posted (4 years 2 months 1 week 5 days 17 hours ago) and read 6113 times:

I was just listening to a podcast entitled Airline Pilot Update, and it mentioned something interesting about the UA/CO deal. Apparently the proposal to codeshare with each other actually is in violation of the CO pilots scope clause, because its a codeshare with another domestic carrier which is not allowed by the scope clause, meaning that the CO pilots would have to sign off on the deal for it to be implemented. Furthermore, the podcast said that the ATI immunity granted to both companies takes effect only if they start codesharing by the end of this year. If the CO pilots don't sign off on this by then, then the ATI goes out the window. For the Record, CO pilots are in negotiations with the company for a new contract. If this is true, this gives the pilots a major trump card to play at the negotiating table.

Here is the link to the podcast. This is a very interesting listen.

http://flightpod.tv/airline-pilot-update

And its the cast dated Feb 5, 2010.

19 replies: All unread, jump to last
 
User currently offlineStyle From United Kingdom, joined Aug 2006, 263 posts, RR: 0
Reply 1, posted (4 years 2 months 1 week 5 days 17 hours ago) and read 5947 times:

This has already been brought up in another thread.

User currently offlineUnited1 From United States of America, joined Oct 2003, 5817 posts, RR: 9
Reply 2, posted (4 years 2 months 1 week 5 days 17 hours ago) and read 5935 times:

Quoting apodino (Thread starter):
Apparently the proposal to codeshare with each other actually is in violation of the CO pilots scope clause, because its a codeshare with another domestic carrier which is not allowed by the scope clause

The disagreement was discussed already on here at one point but the issue isn't involving co-sharing (remember CO has codeshared for years with DL and NW without a fuss.) The union thinks that they can block revenue sharing and is using that as a pressure point for contract negotiations.

Just posturing by the union...



Semper Fi - PowerPoint makes us stupid.
User currently offlineStyle From United Kingdom, joined Aug 2006, 263 posts, RR: 0
Reply 3, posted (4 years 2 months 1 week 5 days 17 hours ago) and read 5865 times:

Last I checked Jeff Smisek is a seasoned lawyer. Should be interesting indeed...

User currently offlineapodino From United States of America, joined Apr 2005, 4125 posts, RR: 6
Reply 4, posted (4 years 2 months 1 week 5 days 17 hours ago) and read 5820 times:

I don't think the pilots will try to block this deal. What I do see them doing is using it for leverage in contract negotiations. Look for things like tougher scope and better work rules to come up.

User currently offlinesldispatcher From United States of America, joined Mar 2007, 353 posts, RR: 0
Reply 5, posted (4 years 2 months 1 week 5 days 16 hours ago) and read 5644 times:

Okay. I understand, as best I can, the angle of the CAL pilots.

However, I am now officially tired of them.

To me, the simple answer to the scope issue is to simply allow a max ratio of mainline to under 100 seat aircraft.

At the end of the day, if Continental started filling up E175's /CRJ900's or Q400's, there would conversely be upward pressure on demand for mainline seats requiring more frequencies and/or larger aircraft. (I know they can add Q400's now...just a seat count example)

I fully realize that there are other issues involved, but when I look at what might be "holding Continental back", the scope clause is glaringly obvious.

And if they are holding up my convenience of flight connections/purchasing power in the domestic Star Alliance, I have no sympathy for any of them who are hijacking the process.


User currently offlineapodino From United States of America, joined Apr 2005, 4125 posts, RR: 6
Reply 6, posted (4 years 2 months 1 week 5 days 7 hours ago) and read 4965 times:

Quoting sldispatcher (Reply 5):
To me, the simple answer to the scope issue is to simply allow a max ratio of mainline to under 100 seat aircraft.

At the end of the day, if Continental started filling up E175's /CRJ900's or Q400's, there would conversely be upward pressure on demand for mainline seats requiring more frequencies and/or larger aircraft. (I know they can add Q400's now...just a seat count example)

I fully realize that there are other issues involved, but when I look at what might be "holding Continental back", the scope clause is glaringly obvious.

I am not sure how what you are proposing would work, but I don't think CO would go for it because in such a deal, it would give CO management even less flexibility than they already have, because if CO wanted to grow the regional carrier, they would also have to grow mainline, which to me seems like it defeats the purpose. It's an interesting idea though.


I was thinking more about this. The UA pilots actually have a stake in this too. UA pilots are also in contract negotiations with the company. Both groups are ALPA represented. If the CO pilots can use the scope language as leverage in contract negotiations to keep their existing scope language in place (which I do believe is in their best interest to do so, and I don't think it would hurt CO too much), then all of a sudden the UA pilots can use what the CO pilots negotiated as leverage in their negotiations. Wendy Morse has made it quite clear that the UA pilots want tougher scope and that United Airlines, not United Express, is where the companies growth needs to come from.


User currently offlineUnited1 From United States of America, joined Oct 2003, 5817 posts, RR: 9
Reply 7, posted (4 years 2 months 1 week 5 days 7 hours ago) and read 4884 times:

Quoting apodino (Reply 6):
Wendy Morse has made it quite clear that the UA pilots want tougher scope and that United Airlines, not United Express, is where the companies growth needs to come from.

Yes she has...and the company is dangling an E190/E195 or C-Series order in response to that.



Semper Fi - PowerPoint makes us stupid.
User currently offlineapodino From United States of America, joined Apr 2005, 4125 posts, RR: 6
Reply 8, posted (4 years 2 months 1 week 5 days 7 hours ago) and read 4884 times:

Quoting United1 (Reply 7):

Yes she has...and the company is dangling an E190/E195 or C-Series order in response to that.

I would love to see that. It might help restore a little confidence (Just a little) in Tilton.  


User currently offlineMasseyBrown From United States of America, joined Dec 2002, 5222 posts, RR: 7
Reply 9, posted (4 years 2 months 1 week 5 days 6 hours ago) and read 4756 times:

Quoting United1 (Reply 2):
Just posturing by the union...

It's more than posturing; it's negotiating.  

CO's local issued out a very reasonable statement saying their issue was job security and a scope agreement was part of the give and take. The company will no doubt offer enhanced job security to get the union's ok on the joint venture flying; I just wonder if they will also get some relaxation of the 50-seat RJ limitation.



Consilivm: Cave ne nothi te vexant
User currently offlineTommy767 From United States of America, joined Aug 2003, 6584 posts, RR: 11
Reply 10, posted (4 years 2 months 1 week 5 days 6 hours ago) and read 4679 times:

Fact of the matter is CO, like AA really needs something between the ERJ-145/Q-400 and the 737-700 (well for AA its the CR7 and the S80.) I too find this particularly interesting especially how it affects a CO/UA merger setup and hope it works out for the better. It's great how UA bit the bullet and got the E-170 when they did. Now CO should do the same.


"Folks that's the news and I'm outta here!" -- Dennis Miller
User currently offlineapodino From United States of America, joined Apr 2005, 4125 posts, RR: 6
Reply 11, posted (4 years 2 months 1 week 5 days 6 hours ago) and read 4670 times:

Quoting MasseyBrown (Reply 9):
The company will no doubt offer enhanced job security to get the union's ok on the joint venture flying; I just wonder if they will also get some relaxation of the 50-seat RJ limitation.

Thats just it though. Relaxation of the 50 seat limitation is a poison pill with "enhanced job security". Yeah you are guaranteeing that CO is going to be doing more of the International flying. But, with the 50 seat limit relaxed, that opens up a whole new can of worms on the domestic front.

I don't expect CO pilots to give much wiggle room on the 50 seat jet limitation at all. I also think the UA pilots are going to try for tougher scope as well.

If I held stock in regional airlines, I would be selling it right now.


User currently offlineMasseyBrown From United States of America, joined Dec 2002, 5222 posts, RR: 7
Reply 12, posted (4 years 2 months 1 week 5 days 6 hours ago) and read 4585 times:

Quoting apodino (Reply 11):
I don't expect CO pilots to give much wiggle room on the 50 seat jet limitation at all. I also think the UA pilots are going to try for tougher scope as well.

I'm amazed that the airlines and the unions haven't come to some agreement to move the RJ flying in-house. I know that CO's union has offered a lower pay scale for RJ pilots, but apparently it hasn't been low enough to make doing it worthwhile. If I were the local, I'd be eager for expanded membership and guaranteed advancement for my members.

Obviously, I don't understand the issues.  



Consilivm: Cave ne nothi te vexant
User currently offlineapodino From United States of America, joined Apr 2005, 4125 posts, RR: 6
Reply 13, posted (4 years 2 months 1 week 5 days 5 hours ago) and read 4472 times:

Quoting MasseyBrown (Reply 12):

I'm amazed that the airlines and the unions haven't come to some agreement to move the RJ flying in-house. I know that CO's union has offered a lower pay scale for RJ pilots, but apparently it hasn't been low enough to make doing it worthwhile. If I were the local, I'd be eager for expanded membership and guaranteed advancement for my members.

The other part of the problem is that if they kept the flying in house, then you would also be responsible for leases and/or ownership costs. The way the contracts are structured now gives all these costs to the regionals, which is why you are seeing a lot of whats happening at the regional level, such as the Mesa Bankruptcy, the Skywest at risk flying deals, the ASA United contract, RAH buying F9 and YX, and Expressjets lowball bid to win the UA contract being examples. And one thing that the Frontline special made clear is when a Major outsources flying, they want the Regional partner to assume most of the risk. They don't want to assume this risk themselves. That is why Pilots need to fight for scope.


User currently offlineFlyHossD From United States of America, joined Nov 2009, 752 posts, RR: 2
Reply 14, posted (4 years 2 months 1 week 5 days 4 hours ago) and read 4355 times:

One more time...

There is no prohibition against Continental operating larger regional jets. Rather, the "Scope" clause requires
that pilots from the Continental seniority list operate those airplanes.

Other major airlines (jetBlue, Air Canada) operate those aircraft "in house." Is there some reason that Continental can't do the same? I recall a time when Continental operated DC-9-10s with about 84 seats. These aircraft were operated by mainline pilots with mainline flight attendants and maintained by mainline mechanics (do you see the job security issues here?).

Continental management has NEVER proposed a pay scale to the pilot's union to operate such an aircraft. There have been no negotiations about this issue because Continental hasn't asked.

I believe that an agreement could be reached.

The issue with United isn't code-sharing, but a joint-venture (revenue-sharing) with another domestic carrier. It's clear that the contract with the pilots prohibits this.

So it gives the Continental pilots some leverage in their current negotiations, in my opinion. However, in the past, the Continental pilots have been very accommodating of management's requests and haven't used any other leverage before.

Beat up the pilot group all you want, but you're not hearing the whole story, in my opinion.



My statements do not represent my former employer or my current employer and are my opinions only.
User currently offlineCatIII From United States of America, joined Mar 2008, 2803 posts, RR: 3
Reply 15, posted (4 years 2 months 1 week 5 days 3 hours ago) and read 4197 times:

Quoting MasseyBrown (Reply 12):
I'm amazed that the airlines and the unions haven't come to some agreement to move the RJ flying in-house. I know that CO's union has offered a lower pay scale for RJ pilots, but apparently it hasn't been low enough to make doing it worthwhile. If I were the local, I'd be eager for expanded membership and guaranteed advancement for my members.

There's challenges to it depending on how you go about doing it. If the airline just buys the operation as a turnkey operation, taking the airplanes and crews, then you have seniority integration issues. The same issues exist I would imagine if you tried to do some type of a flow through as well. If the airline says, ok, we're recapturing this flying but we're going to do it with regional jets flown by mainline pilots, then ALPA national is in quandary because technically while one group (the mainline guys) are expanding their capacity they're doing it at the expense of another group (the regionals). This is what I never understood about ALPA: on the one hand they can be out there supporting increased scope clauses for mainline CBA's, and on the other hand they can be out there with the regionals opposing scope clauses. It's a highwire act.


User currently offlineMasseyBrown From United States of America, joined Dec 2002, 5222 posts, RR: 7
Reply 16, posted (4 years 2 months 1 week 5 days 2 hours ago) and read 4089 times:

Quoting FlyHossD (Reply 14):
Continental management has NEVER proposed a pay scale to the pilot's union to operate such an aircraft. There have been no negotiations about this issue because Continental hasn't asked.

I thought I had read a union statement a couple of years back that they had offered CO a deal, but CO had declined it. However, I think I'd rather trust you than my memory.



Consilivm: Cave ne nothi te vexant
User currently offlineGCT64 From United Kingdom, joined Nov 2007, 1324 posts, RR: 1
Reply 17, posted (4 years 2 months 1 week 4 days 22 hours ago) and read 3395 times:

Quoting FlyHossD (Reply 14):
The issue with United isn't code-sharing, but a joint-venture (revenue-sharing) with another domestic carrier. It's clear that the contract with the pilots prohibits this.

I can fully understand why the pilots want a contract that prohibits this.

If revenue, cost and profit sharing exists on a route then the incentive of both airlines is to raise revenues and decrease costs. One obvious way of decreasing costs in a shared profit arrangement is to use the cheapest crew & aircraft from the pool of partner airlines. So, if, for example, the UA crews cost less than the CO crews then, logically and rationally, management would replace CO crews, aircraft etc. with UA crews, aircraft etc. (and vice versa if the costs were the other way round). In the big picture over time, this can only encourage a "race to the bottom" in terms of pay, terms etc.

So, it makes sense to me for CO & UA management to want revenue & profit sharing. Similarly it makes sense that the pilots, F/As, mechanics don't.



Flown in: A30B,A306,A310,A319,A320,A321,A332,A333,A343,A346,BA11,BU31,B190, B461,B462,B463,(..50 types..),VC10,WESX
User currently offlinesldispatcher From United States of America, joined Mar 2007, 353 posts, RR: 0
Reply 18, posted (4 years 2 months 1 week 4 days 21 hours ago) and read 3148 times:

Quoting FlyHossD (Reply 14):
There is no prohibition against Continental operating larger regional jets. Rather, the "Scope" clause requires
that pilots from the Continental seniority list operate those airplanes.

Then let's hope the ALPA proposes it to Continental....with a ratio limit. The men and women of Continental Airlines are truly the shining star in US Aviation right now along with the hard and soft product that is offered. I want to see them continue to flourish. I'd rather see fewer E145's and find some E170's and E190's (or other products).

From the pilot's standpoint, I can't see where costs can't be recaptured from selling 70 - 90 seats versus 50 seats max.


User currently offlineFlyHossD From United States of America, joined Nov 2009, 752 posts, RR: 2
Reply 19, posted (4 years 2 months 1 week 4 days 19 hours ago) and read 2711 times:

Quoting sldispatcher (Reply 18):
I'd rather see fewer E145's and find some E170's and E190's (or other products).

I concur.

The last mention of 70-90 seat jets that I recall was from former CEO Kellner and he said that Continental would like about 30 airplanes.

Is that an accurate number? One of the concerns that some CO pilots have is that a similar statement was made about the 50 seat ERJs. Fifty of the EMB-145s was the assurance, over 250 appeared (fool me once, shame on you; fool me twice, shame on me).

In any case, I do expect some form of an agreement by the end of the year. As I recall, the joint-venture opportunity expires at year end.

Quoting GCT64 (Reply 17):
So, if, for example, the UA crews cost less than the CO crews then, logically and rationally, management would replace CO crews, aircraft etc. with UA crews, aircraft etc.

Well said. If I recall correctly, UAL's cockpit costs are slightly higher than CAL's costs (just my recollection of some MIT data).



My statements do not represent my former employer or my current employer and are my opinions only.
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