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On 10/24/2002 10:52:11 AM chipmunn wrote:
Chip comments: Dakota, if United files for bankruptcy there are reports they could downsize by one-third and UAX flying could be at risk. This has been discussed on Wall Street, thus these RJ operators may have to seek other opportunities to have a code share partner.
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Chip:
There is virtually NO likelihood that either ACA or SkyWest (or Air Wisconsin, for that matter) would switch affiliation from UA to US in any situation short of a Chapter 7 liquidation of UA. And even then it would not be guaranteed to happen.
First, as UA reduces its domestic flying, it will need its United Express carriers even more. This was made clear in UA's recent announcement that it would stop serving five domestic cities in January 2003, where the carrier noted that its own flights (mostly with 737s) would be replaced with more frequent but smaller capacity flights with RJs. So even if a substantial drop in UA's domestic capacity occurs, and I'm assuming that's where most further UA reductions would take place given yesterday's announcement regarding upcoming cuts in UA's international service, the carrier's need for RJ feed at its hubs will only grow.
Second, it is very unlikely that the pilots at either ACA or SkyWest would agree to accept J4J in the absence of UA's total demise. This is especially true at SkyWest where the pilots are not unionized, and that carrier's management isn't going to do anything (like suggesting J4J) that might push their pilots toward unionizing. Moreover, as UA shrinks, whether in or out of bankruptcy, ACA and SkyWest will continue their strong growth, which for the pilots tranlates into more captain's seats and higher pay. J4J would simply negate the benefits of that growth from the pilot's perspective, so why would they vote for it?
Third, even if UA liquidates, it is questionable at best whether ACA and/or SkyWest would switch their affiliation to US. With regard to ACA, approximately 65% of their RJ flying is now done at ORD, often in markets that American Eagle does not serve (like SAV, ROA, LEX, SGF, FAR and FSD, to mention just a few). Since a UA liquidation would almost certainly cause AA to recall all of its furloughed pilots, and probably even start hiring new ones, AA would have the flexibility to start growing its RJ feed again beyond that provided by the current Eagle operation at ORD, and ACA could become another American Connection carrier.
As for SkyWest, most of its RJs are currently operated in the Delta Connection system, and the relatively few (20 or so?) that now operate as United Express would probably be absorbed into the Delta operation with little trouble, other than paint jobs for the planes and new uniforms for the crews. SkyWest would undoubtedly have the wholehearted support of Delta which would also want to increase its feed at SLC and CVG to attract former UA passengers using DEN and ORD, respectively.
Frankly, I feel the above scenarios are much more plausible futures for ACA and SkyWest than what you have suggested. So in short, while I would never say never with regard to events in this turbulent industry, I believe that your (and your unnamed Wall Street sources) possible scenarios for ACA and SkyWest to switch their affiliations from UA to US are so unlikely as to be little more than fanciful dreaming. JMHO.