CAL/UAL Merger Done Next Week

[V1rowt8]

Fracpt

Unfortunately that rj train left the station looooong ago and isn't coming back.

 

[Superpilot92]

Fracpt

Unfortunately that rj train left the station looooong ago and isn't coming back.

The train may have left the station but the mainline pilot groups have the ability to put an end to the tracks. Now is the time!

 

[Jetjockey]

I am pissed that Continental pilots no RJs over 50 seat scope will be gone. Hopefully not, but they were the last large Legacy without giant RJs. Yes I know they have some Q4's. United has some of the worst scope.

What makes you so certain that CAL's scope won't survive a joint agreement? Both companies realize they need union cooperation to make a merger work properly. Reference the major difference between DAL/NWA and USAir/AW. While I seriously doubt the combined group could recapture lost flying jobs given up in bankruptcy, I certainly see the combined pilot groups of CAL/UAL holding the line right where it is.

No more outsourcing. Plain and simple.

 

[ampropilot2b]

You must be kidding. The 70 seat jet is out of the bag at United, it will never go back-never has never will. The best the pilot groups can hope for is that they are able to negotiate for no additional 70 seat jets at the combined company. The only way to decrease the number of 70 seat jets at the regionals is to offer to fly them at a significant discount to what the regionals are flying them for-which is equivalent to a pay cut for many. Otherwise, the cost of terminating the contracts far exceeds the benefit of bringing them in-house.

Pilots can surely secure the 70 seat flying if they are willing to pay for it out of their own pocket, but it would mean no pay raise and no improvement in work rules. Despite ALPA's strong bargaining position, you can't have everything. Do you want job security? A profitable company? Tighter Scope? Work rule improvements? Pay raises? We are lucky to get 2 or three out of five. If labor offers a better net value, the company would gladly seize the opportunity. What are the odds that ALPA will offer the better value?

My bet...Delta contract plus ~5%, and maybe an agreement not to expand the 70 seat regional fleet. Not C2000 rates, but a major improvement for everyone. Altogether, this transaction will result in a more stable company and industry, which is more valuable to the average pilots career than any short term (~5 year) contract you can negotiate. We need to start thinking about our careers from a macro rather than micro level.

 

[FlyinPiker]

You must be kidding. The 70 seat jet is out of the bag at United, it will never go back-never has never will. The best the pilot groups can hope for is that they are able to negotiate for no additional 70 seat jets at the combined company. The only way to decrease the number of 70 seat jets at the regionals is to offer to fly them at a significant discount to what the regionals are flying them for-which is equivalent to a pay cut for many. Otherwise, the cost of terminating the contracts far exceeds the benefit of bringing them in-house.

Pilots can surely secure the 70 seat flying if they are willing to pay for it out of their own pocket, but it would mean no pay raise and no improvement in work rules. Despite ALPA's strong bargaining position, you can't have everything. Do you want job security? A profitable company? Tighter Scope? Work rule improvements? Pay raises? We are lucky to get 2 or three out of five. If labor offers a better net value, the company would gladly seize the opportunity. What are the odds that ALPA will offer the better value?

My bet...Delta contract plus ~5%, and maybe an agreement not to expand the 70 seat regional fleet. Not C2000 rates, but a major improvement for everyone. Altogether, this transaction will result in a more stable company and industry, which is more valuable to the average pilots career than any short term (~5 year) contract you can negotiate. We need to start thinking about our careers from a macro rather than micro level.

Sad...but much more realistic.

Good post.

 

[funnyman12]

Hello guys.....Obama from Chicago. What a better way to shmooze the government.

 

[Flopgut]

You must be kidding. The 70 seat jet is out of the bag at United, it will never go back-never has never will.

What about the CAL side of the equation? We have NO 70 seat jets. We held onto our scope AND our retirement a heck of a lot better than UAL. Are we just suppose to give up?

The joint contract we're going to want is going to include the scope we already have. The combined airline will need to abide by at least a very close version of it or bow out of the Star Alliance.

 

[eaglesview]

It is a nice thought that if the two airlines do merge then all of a sudden the 70 seaters that are on the property would suddenly go away. That is not going to happen. It is a reasonable expectation to freeze them where they are and obviously anything bigger is mainline.

Both sides of this merger have weaknesses in their contracts. CO obviously has better scope, we (UAL) do not deadhead relief pilots in the back of the airplane just because the flights are over 8 in only one direction.

We should cherry pick the good out of each side, improve all we can and keep it sane. If they do merge, the SLI will not be settled here at FI.com no matter how colorfull the posts get.

 

[FlyinPiker]

What about the CAL side of the equation? We have NO 70 seat jets. We held onto our scope AND our retirement a heck of a lot better than UAL. Are we just suppose to give up?

The joint contract we're going to want is going to include the scope we already have. The combined airline will need to abide by at least a very close version of it or bow out of the Star Alliance.

If you can pull it off we'll all be cheering for you...trust me! It's what would be fair for your pilot groups hard work thus far in not selling out.

I just don't see them somehow buying their way out of the 100 some 70 seaters that are already under contract. Do you? Maybe keep what already in place and have them go away as contracts expire...sounds a little more realistic.

I totally understand where you are coming from. But how would something like you are suggesting actually go down?

 

[SFR]

I just don't see why the new company would keep the UAL name. I think Continental has a cleaner and more professional image...

 

[ampropilot2b]

Flopgut: You assume that the status-quo is an option. Unfortunately, from a practical perspective, you don't get to make that choice. This decision to enter into a merger transaction is management's to make. I commend CAL ALPA on the strength of their scope. Unfortunately, having a historically strong scope doesn't mean you don't have to spend bargaining capital now and in the future to sustain it.

Your company may be merging with a company that has existing contracts worth hundreds of millions (perhaps billions) of dollars to outsource 70 seat jets. So what are your choices? You can keep your scope, but that several hundred million will come from somewhere. Suppose the 70 seat contracts are worth $750 million. You will pay a premium to cancel them, since the company would be subject to litigation as well as significantly increased operating costs. So what are you willing to spend to cancel those contracts and dial back the scope clause? $1 Billion? I don't think ALPA has $1 Billion in bargaining capital in this situation. My understanding is that the combined company is planning to spend ~$500 million to appease labor during the merger.

Despite our best hopes, this is a bargaining process. The company has to give up something, and so does labor. Sure, the balance may be lopsided from time to time (C2000, Bankruptcy, etc) but eventually things return to equilibrium. It is tempting to believe that ALPA holds all the cards now, and that the company should give the pilots everything they ask for. That type of thinking is what causes the massive peaks and troughs in this career.

Clearly, CAL and UAL ALPA can accomplish a lot given their strong bargaining position. But don't forget the value of the merger to your career. The merger makes sense for the long term viability and quality of career for most of the pilot group at the combined company. CAL seems to have bright prospects for now, but don't kid yourself-so did every other airline now on the trash heap of history. You want management to act aggressively and capitalize on opportunities for growth and cost savings like this merger, otherwise they start looking to labor to make up the difference. Given the rumored structure of the proposed merger, the companies can combine relatively inexpensively at the beginning of an economic recovery. Truthfully, this is the best combination CAL can ever hope for and the timing couldn't be better. If CAL ALPA stops the merger now, they may be forced to revisit a less favorable merger in the future under worse terms. You can prevent further growth of 70 seaters at the combined company and achieve a significant improvement in QOL and pay. But dialing back scope would cost more than any pilot is willing or should be willing to pay.

 

[SFR]

Flopgut: You assume that the status-quo is an option. Unfortunately, from a practical perspective, you don't get to make that choice. This decision to enter into a merger transaction is management's to make. I commend CAL ALPA on the strength of their scope. Unfortunately, having a historically strong scope doesn't mean you don't have to spend bargaining capital now and in the future to sustain it.

Your company may be merging with a company that has existing contracts worth hundreds of millions (perhaps billions) of dollars to outsource 70 seat jets. So what are your choices? You can keep your scope, but that several hundred million will come from somewhere. Suppose the 70 seat contracts are worth $750 million. You will pay a premium to cancel them, since the company would be subject to litigation as well as significantly increased operating costs. So what are you willing to spend to cancel those contracts and dial back the scope clause? $1 Billion? I don't think ALPA has $1 Billion in bargaining capital in this situation. My understanding is that the combined company is planning to spend ~$500 million to appease labor during the merger.

Despite our best hopes, this is a bargaining process. The company has to give up something, and so does labor. Sure, the balance may be lopsided from time to time (C2000, Bankruptcy, etc) but eventually things return to equilibrium. It is tempting to believe that ALPA holds all the cards now, and that the company should give the pilots everything they ask for. That type of thinking is what causes the massive peaks and troughs in this career.

Clearly, CAL and UAL ALPA can accomplish a lot given their strong bargaining position. But don't forget the value of the merger to your career. The merger makes sense for the long term viability and quality of career for most of the pilot group at the combined company. CAL seems to have bright prospects for now, but don't kid yourself-so did every other airline now on the trash heap of history. You want management to act aggressively and capitalize on opportunities for growth and cost savings like this merger, otherwise they start looking to labor to make up the difference. Given the rumored structure of the proposed merger, the companies can combine relatively inexpensively at the beginning of an economic recovery. Truthfully, this is the best combination CAL can ever hope for and the timing couldn't be better. If CAL ALPA stops the merger now, they may be forced to revisit a less favorable merger in the future under worse terms. You can prevent further growth of 70 seaters at the combined company and achieve a significant improvement in QOL and pay. But dialing back scope would cost more than any pilot is willing or should be willing to pay.

All I can say is that there better be no furloughed UAL pilot senior to me on the new list. I was a DEC 2005 CAL hire

 

[eaglesview]

All I can say is that there better be no furloughed UAL pilot senior to me on the new list. I was a DEC 2005 CAL hire

Your concerns are not going to be solved here. Cooler heads will prevail.

 

[Homer Jay]

Your concerns are not going to be solved here. Cooler heads will prevail.

I would love to see the new management team come up with an enticing early-out package to solve a potential overstaffing issue and in turn bring back the furloughs. The combined list will have A LOT of age 60+ pilots. Getting them to leave could solve a lot of our concerns.

 

[Jetjockey]

I just don't see why the new company would keep the UAL name. I think Continental has a cleaner and more professional image...

Well, except for hiring you as a pilot.