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United looking at New Embraer and C-Series jets for Mainline, article

General Lee

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United Said to Mull Embraer, CSeries Jets in Fleet Revamp
By Julie Johnsson, Michael Sasso and Andrea Rothman
November 05, 2014 4:55 PM EST. Bloomberg


United Airlines (UAL) is in talks with Embraer SA (EMBR3) and Bombardier Inc. (BBD/B) to buy new narrow-body planes amid a fleet makeover to reduce its reliance on unprofitable regional jets, people familiar with the matter said.

The discussions involve the largest models in Embraer's updated E-Jets family and Bombardier's smallest CSeries, said the people, who asked not to be identified because the details are private. An order isn't imminent, the people said.

An Embraer or Bombardier purchase would be a departure for Chicago-based United, whose pilots only fly Boeing Co. (BA) and Airbus Group NV (AIR) aircraft on its main jet routes. The jets under consideration would fill a gap between United's narrow-bodies, most of which seat more than 150 people, and commuter planes carrying a maximum of 76 passengers.

Choosing one of the new planemakers also would let United place a separate order at the Express regional unit to replace its inefficient 50-seaters. United's pilot contract lets it take more commuter aircraft, starting in 2016, as long as larger Embraer or Bombardier jets are added to the main fleet.

For regional-jet pioneers Embraer and Bombardier, a deal with United would boost their quest to weaken Boeing and Airbus's grip on sales of bigger aircraft to major U.S. airlines. Embraer's two largest E2 planes will have about 140 seats, while the CS100 from Montreal-based Bombardier will carry 108 to 125 people.

Stock Advance
Bombardier rallied on the news and gained 1.6 percent to C$3.80 at the close in Toronto. Embraer rose 0.4 percent to 24.10 reais in Sao Paulo, while United slid 2 percent to $54.11.

United isn't giving details on its fleet strategy, which includes assessing new and used planes, said Megan McCarthy, a spokeswoman for parent United Continental Holdings Inc.

"We're talking to all the manufacturers," McCarthy said in a telephone interview.

Chief Financial Officer John Rainey said Oct. 23 that United is shopping for used models from Embraer, Airbus and Boeing to take the place of the 50-seat jets being parked. United bought its first secondhand planes, two Boeing 737-700s, last quarter.

"We don't necessarily want to go out and place a brand-new aircraft order that creates several billion dollars more" of capital expenditures, Rainey said during a conference call to discuss third-quarter earnings.

Company Responses
Spokesmen for Airbus, Boeing and Sao Jose dos Campos, Brazil-based Embraer declined to comment on talks with United. Marianella de la Barrera, a Bombardier spokeswoman, said "United is obviously an airline that we're very interested in showing the CSeries too" while declining to give details.

While Embraer's E190-E2 and E195-E2 are re-engined updates of existing models, Bombardier's CSeries is an all-new aircraft. The planemaker has struggled to find buyers for the CSeries, whose commercial debut is now set for 2015's second half after missing a planned 2013 target.

The E2s, which won't start entering service until later this decade, list for as much as $62.4 million. The CS100's catalog price is $63 million. Airlines typically get discounts.

United's results have been hurt by its dependence on 50-seat jets flown under contract by regional affiliates. Even with fuel prices retreating this year, a gallon of jet kerosene still costs about 50 percent more than a decade ago, eroding the economics that once made the small planes attractive.

"We are too reliant on the 50-seat RJ," Rainey told analysts last month.

Pilot Contract
United can start adding bigger regional jets with 76 seats in 2016, on condition that it takes Embraer or Bombardier planes in the 100-seats-and-up category, according to the airline's pilot contract.

That agreement set a formula that lets United buy four 76-seaters -- such as Embraer E-175s -- for every five larger mainline planes it acquires, up to a total of 223 regional aircraft. United's Express unit, which subcontracts flying to commuter carriers, can operate jets that seat as many as 76 passengers.

United has been replacing its 50-seaters with newer, more-efficient E-175s. McCarthy, the spokeswoman, said recent orders have pushed United's tally to 153 of those planes, the maximum number allowed under the pilot contract.

Each time United replaces a 50-seat jet with an E-175, the airline generates "over $1 million of annual improved profitability," Chief Revenue Officer Jim Compton said on the earnings call.

To contact the reporters on this story: Julie Johnsson in Chicago
To contact the editors responsible for this story: Ed Dufner



Bye Bye---General Lee
 
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Freebrd

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Blah blah same old Jenni shet, copy/paste, copy/paste. Just don't give in to increasing scope, oh wait, you're just a bored dispatcher out in Utah, never mind putz

Hopefully the REAL major pilots will hold or reduce scope and get these new planes at mainline.
 

General Lee

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Blah blah same old Jenni shet, copy/paste, copy/paste. Just don't give in to increasing scope, oh wait, you're just a bored dispatcher out in Utah, never mind putz

Hopefully the REAL major pilots will hold or reduce scope and get these new planes at mainline.

Turdy,

I did copy and paste it, since it is important to many on here. Looks like UAL will be doing the same thing DL did, get smaller mainline planes and park unprofitable 50 seaters. It will probably increase hiring there as well. You may want to throw in an app.



Bye Bye---General Lee
 
P

pave driver

My APA union will not tolerate anything except an industry leading contract. The times of misinformation, pilot concessions, scope relaxation and lies is OVER. AA will order a lot more small narrowbody, likely 190s, and reduce small RJs. It's the path management is on regardless of what they say in their negotiations. AAG leadership already knows the fleet plans for the foreseeable future and are simply trying to get as much as they can from us. Well, we've already told them only an industry leading contract, IN EVERY WAY, is the only contract we will approve for the world's largest pilot group and most profitable airline. Industry leading pay for all AA pilots will begin on 1 Dec 14.
 
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Heavy Set

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Blah blah same old Jenni shet, copy/paste, copy/paste. Just don't give in to increasing scope, oh wait, you're just a bored dispatcher out in Utah, never mind putz

Hopefully the REAL major pilots will hold or reduce scope and get these new planes at mainline.

Again, you are stalking GL and not adding value. If you read the article, it is actually very relevant to many UAL and regional pilots. You need help...
 

johnsonrod

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I think the article confuses the CS100 (smaller) with the CS300. The CS300 competes with the E190-E2 in terms of seating capacity.
 
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pave driver

I think the article confuses the CS100 (smaller) with the CS300. The CS300 competes with the E190-E2 in terms of seating capacity.

I was just looking at this as well. For AA's future massive international expansion plans, AAG leaders have identified a huge market gap for efficient feed. AAG is looking at 2-class configured aircraft with 80-120 seats. The A319 currently doesn't work to feed from these plans for the most part. The west coast will see some of the largest growth of any flying we currently do. For international expansion, the current feed issue is the tricky bit.
 

Wingman10

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My APA union will not tolerate anything except an industry leading contract. The times of misinformation, pilot concessions, scope relaxation and lies is OVER. AA will order a lot more small narrowbody, likely 190s, and reduce small RJs. It's the path management is on regardless of what they say in their negotiations. AAG leadership already knows the fleet plans for the foreseeable future and are simply trying to get as much as they can from us. Well, we've already told them only an industry leading contract, IN EVERY WAY, is the only contract we will approve for the world's largest pilot group and most profitable airline. Industry leading pay for all AA pilots will begin on 1 Dec 14.

Really, I have not heard this at all. It would be nice if you are correct but
is AAG really going to put a smaller jet on mainline?
 
P

pave driver

Really, I have not heard this at all. It would be nice if you are correct but
is AAG really going to put a smaller jet on mainline?

Yes. If you listen carefully to Kirby, he stated (misleads) and says - now I'm paraphrasing, "we like the size of the 190 fleet and the markets they are deployed." At that snapshot in time, he portrays "truthieness" but it's misleading because of their future known plans they can't disclose. Months later he states, the 190 fleet with either grow or go away. Then shortly thereafter, the scope issue feeler/distraction-tactic is floated and the APA said, pound sand! The APA, if you follow them closely and know their history well, are ultra-informed and war battle hardened having seen every play in the book and are armed with every analytical tool they need at their disposal. It's all tied together and the pieces of the puzzle, when gathered and arranged, shows a clear picture. Furthermore, the 190 rates will be and are included in the increased rates that will be above current DL rates. We will likely see rates on the 190 for 12 year captains of around $190/hour.
 

Freebrd

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If you read the article, it is actually very relevant to many UAL and regional pilots. You need help...

Ya think Heavyload! Geez lighten up Francis. Probably just another of Jenni's screen names.
 

Freebrd

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You may want to throw in an app.


Bye Bye---General Lee

Gee thanks for the heads up putz. AND the "advice". One of these days you & Heavyload will realize reg pilots are up to speed on hiring, and also read the same friggin articles you copy/post. But go ahead and feel important dispensing your wisdom putz. You hit 20,000 posts yet? :rolleyes:
 
P

pave driver

Gee thanks for the heads up putz. AND the "advice". One of these days you & Heavyload will realize reg pilots are up to speed on hiring, and also read the same friggin articles you copy/post. But go ahead and feel important dispensing your wisdom putz. You hit 20,000 posts yet? :rolleyes:

Some info you find here can't be found with a Google search.
 

SpauldingSmails

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Has anyone else seen the movie "Groundhog Day?"
 

Wingman10

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Yes. If you listen carefully to Kirby, he stated (misleads) and says - now I'm paraphrasing, "we like the size of the 190 fleet and the markets they are deployed." At that snapshot in time, he portrays "truthieness" but it's misleading because of their future known plans they can't disclose. Months later he states, the 190 fleet with either grow or go away. Then shortly thereafter, the scope issue feeler/distraction-tactic is floated and the APA said, pound sand! The APA, if you follow them closely and know their history well, are ultra-informed and war battle hardened having seen every play in the book and are armed with every analytical tool they need at their disposal. It's all tied together and the pieces of the puzzle, when gathered and arranged, shows a clear picture. Furthermore, the 190 rates will be and are included in the increased rates that will be above current DL rates. We will likely see rates on the 190 for 12 year captains of around $190/hour.

Is this why he wants one more chance to talk with the BOD,
to explain the plan above before next week s deadline.
Interesting to say the least.
 

General Lee

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My APA union will not tolerate anything except an industry leading contract. The times of misinformation, pilot concessions, scope relaxation and lies is OVER. AA will order a lot more small narrowbody, likely 190s, and reduce small RJs. It's the path management is on regardless of what they say in their negotiations. AAG leadership already knows the fleet plans for the foreseeable future and are simply trying to get as much as they can from us. Well, we've already told them only an industry leading contract, IN EVERY WAY, is the only contract we will approve for the world's largest pilot group and most profitable airline. Industry leading pay for all AA pilots will begin on 1 Dec 14.


Do you guys get profit sharing? Rumor has it the DL profit sharing for this year will be 20% of the W2, and on top of that a DC contribution for the profit sharing itself will be 15% of the profit sharing check's value. So, if a DL pilot got $30K in profit sharing, there would be an extra $4500 put into the DC retirement plan as well. Does AA and their "industry leading" pay include profit sharing? 2015 should have even larger profits due to low oil.



Bye Bye---General Lee
 
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pave driver

Do you guys get profit sharing? Rumor has it the DL profit sharing for this year will be 20% of the W2, and on top of that a DC contribution for the profit sharing itself will be 15% of the profit sharing check's value. So, if a DL pilot got $30K in profit sharing, there would be an extra $4500 put into the DC retirement plan as well. Does AA and their "industry leading" pay include profit sharing? 2015 should have even larger profits due to low oil.



Bye Bye---General Lee

The FA contract TA, whereas the vote ends on 9 Nov 14 (it should pass), does not include profit sharing and is the reason the company does not want to disclose their offer to include profit sharing to the APA until the FA's vote for their new contract (higher than Delta's current FA contract). By the way, me-too clauses for the FAs should have never existed in the first place! There is no comparison to their jobs and our careers. The psychology behind past airline management behavior is too lengthy to discuss but this cat is officially out of the bag.

The APA will have AAG's offer on 12 Nov 14 and show a side-by-side comparison to the pilots to include profit sharing. The earlier offers included Delta + %5 but the APA said no to scope of 81 and to no profit sharing.
 

jonjuan

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The FA contract TA, whereas the vote ends on 9 Nov 14 (it should pass), does not include profit sharing and is the reason the company does not want to disclose their offer to include profit sharing to the APA until the FA's vote for their new contract (higher than Delta's current FA contract). By the way, me-too clauses for the FAs should have never existed in the first place! There is no comparison to their jobs and our careers. The psychology behind past airline management behavior is too lengthy to discuss but this cat is officially out of the bag.

The APA will have AAG's offer on 12 Nov 14 and show a side-by-side comparison to the pilots to include profit sharing. The earlier offers included Delta + %5 but the APA said no to scope of 81 and to no profit sharing.

The pay raises then should be significantly better than those at DL as there's talk of profit sharing being in the neighborhood of 25-30% next year with oil way down, (Goldman sacks said $50 next year) debt wiped out and capacity discipline continuing.
 

SpauldingSmails

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I wouldn't trust a Goldman Sachs long range stab on oil prices any more than a guess from someone on this message board.
www.marketwatch.com/story/goldman-sachs-raises-possibility-of-200-a-barrel-oil
 

jonjuan

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I wouldn't trust a Goldman Sachs long range stab on oil prices any more than a guess from someone on this message board.
www.marketwatch.com/story/goldman-sachs-raises-possibility-of-200-a-barrel-oil

I said Goldman sacks.

You wear your gold plated diapers with those.
 
P

pave driver

Oh...the above is too funny:) AA doesn't hedge so good times for now. Not sure what the rates are for Delta and United as I think they're hedged. Hedging is very expensive to do but what do I know? At what rate is the question. As prices drop, they lose - I think. I'll do a little research and check. They both may be paying too much so I wouldn't expect a drop would change their fuel costs or their profit sharing payouts. I was going to try and fit in "crack spread" somewhere in there but it would have been out of place. ;)
 
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