LifeNtheFstLne

Breaking leases is actually something our CEO has experience with, as it was his first major assignment when Gordon was calling the shots - buh bye CAL Airbii.

gettinbumped

Well, the 737-300's have been continuously replaced with the 737-800. Not one of the UAL 737's was replaced, though Glenn was making overtures about ordering the CSeries being ordered in the future as a "737 replacement".

EWRflyr

Why would I be opposed to that? I think under the T&PA all those airplanes are still listed as belonging to your side for staffing purposes. I'd like to see them all back, along with all of you back as we park 70-seat jets.

EWRflyr

Go back and read my post you replied to. I indicated "as the leases come up" in there. I know we can't just return airplanes until the leases are up due to lease requirements. I was just asking, in theory, wouldn't it be cheaper to operate an owned UAL 737-500 then a leased CAL 737-500 if they are replaced as the leases come up?

CAL's -300s were owned. It was cheaper to take them out of revenue service and park them than it would have been trying to park the -500s which still needed to be paid for each month.

pilotgolfer

Sorry...I misunderstood what you originally said. I thought you meant the parked United 500s could be brought back to replace CAL airplanes...ie have the CAL pilots fly them. I was attempting to be humorous, but apparently it didn't work.

cadetdrivr

Absolutely.

But in this case there were two important issues:

1) The airplanes had to be parked prior to the merger to ensure that the combined UAL/CAL would be a very specific size...only slightly larger than Delta. This was the biggest airline merger in U.S. history and it sailed through the DOT/DOJ review process. The merger was announced publicly in May and it closed in October. That has to be a record of some sort and the DOJ only required some token EWR slots in the end.

2) Although both airlines operated 737-300's & -500's they were not 100% identical so cross-crewing pilots, F/A's, and mech's would have taken a significant about of time and expense with training. For a company as large as UCH the training costs were absolutely insignificant but time was the problem. As memory serves, didn't it take DAL about 18-24 months to integrate the NWA 757 aircraft and crews? Slicing and dicing the UAL and CAL fleets by parking the 737's involved was simply the quickest means to an end and UCH can still operate both airlines separately without any training issues.

Boomvang

With the mixed fleet of 737 aircraft that CAL operates, I think a one page paper training bulletin would have covered the differences with the UAL 737s.

I don't think it's the aircraft differences that are as significant as the procedural differences.

cadetdrivr

I would agree that the procedures are the big difference but one look at a photo of a UAL 737-300/500 cockpit compared with a CAL -500, CAL -300, and a CAL -700 leads me to believe that the pilot training would encompass more than one page of info. I would like to think that most pilots could take it in stride but the FAA is yet another variable.

EWRflyr

I'm all for my brethren at UAL and want the furloughs back, but I am getting tired of conversations, forums, etc. where parking your airplanes was all about preparing for, "right-sizing" for a merger with another airline, specifically CAL.

Your company parked your airplanes well prior to any merger was announced/completed. CAL walked away from a merger back in 2008 after looking at UAL's financials (that existed at that time). Who is to say, at that time, there was ANY guarantee that UAL would have been successful in ever courting another dance partner later after CAL walked away?

The parking of the UAL planes was more a function of the relaxed scope clause imposed upon you or agreed upon by you whatever the case may be. CAL has been wanting 70-seat RJs for years. If we had relaxed our scope years ago as UAL did, CAL would have parked the 737-500s and -300s much sooner and 70-seat RJs would be flying around our system like crazy. IF that had happened, wouldn't we be much smaller today than we are? Would we have been down-sized to being TOO small for a merger with UAL then? That appears to be the logic used in these arguments so I was just taking it a step further in regards to CAL.

We can agree to disagree, but the "right-sizing" argument is just not something I buy at all. Other airline mergers in history have resulted from much bigger airlines combining with or acquiring much smaller carriers. It happens in business all the time.

boxer6

You're right it does. But.. when you want to merge companies without cash changing hands you need to do exactly what was done. From a business and deal standpoint the other poster has very valid points.

Funny thing. I have friends..good friends.. at both airlines. Way back in..I think it was in the 2003 or so time frame.. my friend at UA told me about a merger that was rumored with CAL. He was a person that had connections with ALPA at the time and their MEC chairman sits on the BOD. That fact that adds a little..and I mean a little (but more than if that BOD position didn't exist) credibility to what he said. My CAL, friend on the other hand, said that no way that would ever ever happen. I believe Bethune was CEO at the time.

My personal belief? There were overtures and possible meetings way back in 2003 regarding the merger. Bethune was not really interested.... the rest of the BOD? Who knows I guess....but... Bethune retires a year later or so. In comes Kellner. What does he think of a merger...privately? Don't know. But along comes spring 2008 and Kellner nixes the idea and then he leaves a little over a year later and six months after that is May 2010.

Connecting the dots is difficult and open to interpretation. My interpretation was made talking to both friends and simple observation along with common sense. What is fact is to effect a merger when both parties don't have cash to do it leaves few options..namely what is commonly called "a merger of equals". The DOJ hurdle needs to jumped to so the size point is valid.
UA relaxed scoped made it easier for them to get where they HAD to be..not really why it happened. Scope allowed Tilton to kill two birds with that one stone.

There is no question in my mind that this merger was discussed long before now and, with the DAL/NWA deal complete, it had to be done from a competitive business standpoint. Smisek even was quoted as saying CAL would eventually die if they were left out of a merger.

It was a done deal...the only question was what was the right time.