If United files chapter 11...

[beats working]

What do you think will be the impact on the United Express carriers? For ACA, AirWis, and SkyWest I see good and bad possibilities.

Good: Relaxing or elimination of scope clause which will may mean more jets. Increased transfer of flying from mainline to cheaper RJs (at least for marginal routes). These would both mean more growth for the regionals.

Bad: All United ops (mainline and regionals) are hurt from negative public perception and competitors go in for the kill. In this cased the flying would go to American, Delta, and CAL instead of ACA, SkyWest, and AWAC.


Any thoughts???

 

[Rvrrat]

Little downside for the express carriers

SKYW is solid in its own right through route structure & market frequency. All of them could stand on their own.

Chapter 11 stigma is relatively short term in the memory of the public at large.

 

[Beechnut]

According to the Johnny O. over at Mesa: AirWis or SkyWest will lose their United contract because we're just to darn expensive. Mesa will swoop in and take over the Denver mountain cities with their Dash 8's. AirWis may even fold because we're a poorly run company and we lose money everytime an AirTran JetConnect airplane moves.

Of course, That's Mesa's take on it. So glad Johnny O. knows how to run AirWis better than our three guys.

S.

 

[Andy Neill]

Remember that even if United folds (a very unlikely scenario) there will be an awful lot of jets available for the Delta Connection sides of the SkyWest and ACA houses.

 

[Rottweiller]

Remember that even if United folds (a very unlikely scenario) there will be an awful lot of jets available for the Delta Connection sides of the SkyWest and ACA houses.

Maybe on Skywest's side but not for ACA. UAL pay the financing on the ACA RJ's so they would become UAL assets to be divided / sold etc if it went to chap 11. AirWis has only 7 registered to UAL all the rest (and future) are AirWis, bought and paid for by Airwis.

Agreed though, UAL going under? Not likely but hey the mechanics seem to want it that way!!

 

[throttlejockey]

A UAL bankcruptcy will allow UAL to renegotiate all of its current contracts - i.e. labor, aircraft leases, and vendor contracts. That includes the contracts with various regional carriers.

I have no doubt that UAL will ask the regional carriers for concessions. This will be very hard on the regional carriers since all of them operate on a "fee for departure" basis, which is essentially a "cost plus" deal.

If a UAL bankcruptcy was to dramatically change the face of the industry (as the USA Today Article said), UAL would ask its regionals to operate its jets on a "pro-rata" basis, forcing the regionals to take more of the risk in operating the equipment. If that happened, we would see a dramatic change in the places and the ways in which the RJ's would fly.

In the short term, I expect that there will be little change in the explosive growth of the current regionals at UAL post bankcruptcy filing.

However, in the long term (2 + Years) after the banckruptcy, I expect one or two of the regional carriers currently serving UAL, to have serious financial trouble, maybe one of them will be dimished and/or gone, and certainly UAL will have a new regional feed carrier or carriers operating for them in addition to what they have now.

my $.02

 

[Beechnut]

Gotta love the Financial guru/Pilot posts.

S.

 

[20sx]

I believe ACA does ALL its own financing for its jets.

 

[BlueRidger]

Rotweiler,
What hole did you pull that info out of about UAL owning ACA's planes. ACA leases the planes from a variety of lessors which provide the finanacing. Each and every plane is required to carry a placard of who the official owner is. Most of our planes say First Security Bank of Utah (yes ACA) not UAL. What you wrote is pure wishful thinking that ACA would go away and Air Wis can have all that flying.
Like SkyWest, ACA has a solid grasp of its primary market, ACA owns its own gates in IAD and most of its outstations. If UAL got rid of ACA's contract the company could stand on its own by developing the IAD market like they originally planned. Instead of taking over more Air Wis routes and stations out of ORD.

 

[BlueRidger]

Rottweiller wrote"Maybe on Skywest's side but not for ACA. UAL pay the financing on the ACA RJ's so they would become UAL assets to be divided / sold etc if it went to chap 11. "

Where did you get this from. ACA planes are leased from various sources. There are placards on each plane identifying the owner and lessor of these planes. I have not seen any that say "UAL" Most say "First Security Bank of Utah".
Second, even if a company like UAL were the lessor do you really think that the bankruptcy court would give up a constant and secured revenue stream. Further, what you are talking about is a Chapter 7 liquidation not Chapter 11 Bankruptcy. Engage your brain before operating the keyboard with malicious rumors.