Agreed. I get to fly them regularly in Europe and they are fine for short flights on thin routes. Better Q400s than nothing and probably better two or three of these a day than one larger RJ or 737. I just don't care for Q400s on longer routes because then the slower speed really begins to add up (Croatia Airlines regularly flies 2 1/2 hours with these puppies from Zagreb to places like CPH and BRU--the equivalent distance of EWR to ORD).

Impact on UA should be minimal- IMO it will be the former Northwest CRJs that will be the first to go.

I'm reasonably confident that United will find operators for the Qs so the impact on the schedule will be relatively minimal. The impact to the company will likely be higher costs to operate those routes. The contract with Colgan was a fixed capacity purchase agreement so when costs spiked Colgan lost $11MM+. Hard to think that another carrier will enter into an agreement to operate the planes under a similar structure knowing that the last guys failed so badly they went Ch11 with it.

As for CRJs, the only thing I saw in the filings was the scheduled retirements of the Delta-flagged CRJ-900s in the first half of 2013. The CRJ200 agreement was actually extended.

A jet in any form, even the crap 50 seat ERJs >>>>>>> a turboprop

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+1

I'll take the Q4 over the CR2 every time on flights less than 90 minutes.

+1

I wouldn't limit it to the Q4- any prop really...

In this case, it's negativity towards the operator, not the aircraft.

same here, as long as the Q4 is operated by someone other than Colgan. The CRJ200 is the Devil's Chariot.

Excellent News
 

Amen to that! Colgan going buh-bye is excellent news. Probably the worst operator in the UAX system. Colgan's getting karma after paying slave labor salaries to aviators forced on grueling schedules and then having to fly inferior prop planes which are harder/more complex to fly than jets.

Now, realize that UACO is the major culprit here for the crappy operations and the Pinnacle/Colgan bankruptcy. UACO pays them just a few dollars over actual cost and then market/regulatory conditions change and bam that is the end of story, company goes bankrupt and UACO is pretending it is an innocent bystander.

The writing was on the wall anyway. After Colgan hit its breaking point of failure with exhausted poorly trained crew crashing into Buffalo rooftops, the FAA/NTSB came out with increased pilot rest times further eroding razor thin margins. Now, there is an upcoming pilot shortage with Colgan pilots who were just building up time during economic downturn seeing opportunities other than flying props for burger flipping wages.

UACO, note that you get what you pay for.....

If you believe the filing, UACO actually paid them about $11MM LESS than the cost of operating under the Capacity Purchase Agreement in 2011. Unlike the Delta agreements that were costs + margin the CO deal was apparently fixed fee on the capacity. :eek:

Well, sbm12, i am glad you picked that up. I didn't pour through their filing, but am not surprised that given the operator and UACO's penchant for short-sighted greed that this was actually the case. Hopefully, it will lead to alot more Republic and gasp, dare i say Mesa (who has actually improved IHMO)

Eye of the Beholder
 

I'd suggest you switch short-sided greed with excellent negotiation skills.

UA/CO negotiated the best deal out of Colgen, which sadly for Colgen was not enough to cover the costs of their operations. I'd say Colgan's inability to negotiate a deal that actually reflected their costs and margins would be the culprit there.

It'll be interesting to see what UA is going to do for Q-Series flying. Those planes are not UA's planes, so they can't just shift the operator. I can't imagine that Pinacle didn't notify UA that this was coming down the line. I would hope they have a plan B.

-Chris

Yes and no. Much like WN's huge successes historically in fuel hedging, someone lost the same amount of money on that bet as WN made. At some level there isn't much value in undercutting the supplier so much in the price that they eventually fail to deliver the product. That's generally bad for both parties so it is hard to say that UA was exceptionally successful in the negotiations long-term, though they certainly did pay less short-term.

UA absolutely knew this was coming. They already had E35s coming out of the desert and they actually provided additional capital to Pinnacle for operations the past two months to help the company's cash flow while they attempted to negotiate new deals with DL, UA and ALPA. Those negotiations failed (not all that surprising) so the company has taken the Ch11 route.

While the planes do not belong to UA my guess is that if UA guarantees a new capacity purchase agreement to a different operator then the Canadian Export Bank which financed the Colgan deal will likely be happy to finance the planes out to the next operator. They want the planes in operation just as much as United does.

What really remains to be seen IMO are:
1) Can UA get the deal in place with the new operators quickly enough to address the fact that the Colgan pull-down is happening fast?
2) What of the EAS services?

Having just read about Pinnacle's bankruptcy, I've added a note to my consolidated post about the financial health of Star Alliance airlines here.

But the reference to Pinnacle continuing their UA Express service while halting their Continental Express service seems confusing.

I thought that UA and CO had merged brands by now. What's going on? Do UA and CO still have separate express brands?

It is no clear what source is being cited there or where the information comes from. Suffice it to say, I don't think that it is accurate in the way it splits the services. And I actually looked at the bankruptcy docket filings this morning. ;)