UnitedChicago, I think that it's safe to say that UAL will terminate the contract with ACA prior to emergence from chap 11. As a UAL furloughee, I'd like to thank all of those at ACA who have chosen to go it alone. I expect to be back at work a bit sooner thanks to ACA opting to commit hari kari. Busdrvr has already stated many of my thoughts on ACA's long term viability.
Here's a response that I posted on another thread to this issue (of the response that I anticipate from WHQ):
"On routes where UAL can justify upguaging to larger equipment, UAL will either have 737s or A319s to replace RJs. (This can lead to upguaging equipment throughout the system). On routes where RJs are sufficient, UAL will shuffle in another regional.
This will cause UAL to selectively upguage from RJs throughout the system in order to provide sufficient RJ coverage from the regionals.
While on the surface it may appear that ACA has left UAL short of lift capacity, that is not true. The mainline fleet is currently underutilized and by forcing UAL to upguage, it will actually increase UAL's efficiency. I expect mainline UAL's CASM to be at or below ACA's CASM. However, UAL's marginal CASM (the CASM associated with increased fleet usage) will be well below anything that ACA could touch, even if all of ACA's employees worked for free.
There are two flies in the ointment for UAL. The first will be the number of available pilots. However, UAL could easily recall pilot furloughees from the last six months and run them through short courses where they'd be back flying the line in less than a month.
The second fly in the ointment is aircraft leases. I don't have a good handle on UAL's progress so the following is merely conjecture on my part. I would assume that UAL was very disappointed at ACA's refusal to cut rates because it gives them decreased leverage on renegotiating leases. However, I would be willing to bet that UAL will resolve all leases prior to terminating ACA's contract. And both of those issues will be resolved prior to UAL emerging from chap 11. From my understanding, there are still north of 100 aircraft leases that have to be renegotiated. UAL has rejected several 777 leases, but I've read that the leassors have not been able to find a new leasee. It may be possible for UAL to return to those leassors and make the same offer; I would expect the leassors to rethink their position when they discover that there is an extremely thin market for used aircraft. "
Very few startups survive more than a few years. In ACA's case, I don't expect them to last more than a couple of years. They have the worst reputation for performance and customer service among all of UAL's regional partners. This isn't another JetBlue situation, where ACA will win over customers with great service. On the contrary, many frequent flyers of routes currently served by ACA are well aware of the dismal product that ACA delivers on behalf of United.
46Driver, how can you possibly conclude that Independence will be an LCC? Your CASM is 15 cents per ASM. On routes where demand will allow, UAL will be running A319s (or larger aircraft) On thinner routes, UAL will bring in another regional partner, perhaps AWAC or Mesa (both of which have better customer reps than ACA).
Busdrvr, you might find this link interesting; it's ACA's 'battle plan':
http://www.atlanticcoast.com/NonFlash/for_...resentation.pdf