First, the Continental pilots have filed grievances against United for allegedly violating parts of their contract. One grievance says that a certain ratio of Continental to United flying for widebodies is not being maintained.

The second grievance deals with the sale of 767 aircraft, according to ALPA. They didn’t specify a variant, but that’s very interesting considering that Jeff Smisek has said the 767-200s might be toast. Also interesting – a Continental 767-200 was parked at Goodyear last month and hasn’t flown a scheduled flight in over a month. It’s still registered with Continental if you check the FAA registration database, though both ATDB and Ch-Aviation say the aircraft is off to Omni Air International.

The other interesting thing – United’s old negotiations website is back! This website includes a management proposal from October 27. Things have probably changed since then, but what’s fascinating is that the company was interested in pursuing scope for 250 regional jets under 95 seats. United currently has just over 150 E-170s and CRJ-700s. RJs at 94 seats would be the largest in the country, as far as I know, with the US Airways Express Mesa CRJ-900s and Republic E-175s close behind. It would also mark a significant change from Continental, where no large regional jets are allowed. As many readers recall – this was a bit of an issue between Continental pilots and management at the end of 2010.

This will be interesting to watch…at least from the outside.

According to data from Ch-Aviation.ch, all five of the aircraft last operated with Austrian Airlines subdidiary Tyrolean Airways. One of the first , formerly OE-LTP, was pictured in Innsbruck with Austrian titles removed, aircraft and has now been registered as N837CA.

Continental’s current timetable indicates that Q300 flights will start operating next month on routes out of Cleveland such as Columbus, Grand Rapids, and Indianapolis. Forward schedules show that the aircraft will begin operating on further Cleveland routes later this year and will also operate some Newark flights to destinations including Albany, Philadelphia, and Rochester.

Seat maps from Continental.com show that CommutAir will be operating the (non-existent) widebody version of the Q300, but assuming 12 rows of 2×2 seating, the aircraft will seat 48 passengers.

One wonders how a Q300 looks compared to an ERJ-145 in this fuel price environment.

The Haneda slots were awarded to carriers with dormancy conditions – meaning the slots would be lost if they were not used for 90 days.

The application for back-up authority is not exactly new – at least for Continental. The airline asked last year for back-up authority to fly Guam-Haneda (service would be operated by Continental Micronesia) as well as authority to fly from Newark to Haneda. In its final order, the DOT did not award this authority.

“To avoid any risk to Haneda the Department should act immediately to name Continental and United as back-up carrier in the event that Delta (or any other Haneda-authorized U.S. carrier) decides to abandon service at Haneda,” the carriers say. They also say that if a carrier were to stop serving Haneda, the process to re-allocate the slots would  ”loss of much needed Haneda service…that will be particularly harmful to the competitive position of the U.S. carrier industry if reciprocal services by Japanese carriers continue.”

As part of its application, United and Continental note that both American and Delta requested (and received) permission to delay the launch of of Haneda services, and that Delta was suspending service to Haneda. (While not noted by United, American is also suspending Haneda service, but for a shorter time than Delta.)

Delta responded to United and Continental in a DOT filing, saying that it is not “abandoning Haneda service. Delta’s Los Angeles-Haneda flight resumes on June 2, and Delta’s Detroit-  Haneda flight resumes on June 16 — both in full compliance with the Department’s 90 day dormancy condition.” The Atlanta-based carrier also points out that “United does not mention the Japanese tsunami or its impact on U.S.-Tokyo air service. Delta’s response of temporarily suspending Haneda service until the immediate effects of the disaster have abated.”

There’s been no word from the DOT yet, but it will be interesting to see what is said. As Delta mentioned, the service is scheduled to resume within 90 days, meaning they are in compliance with the DOT’s ruling. Even if Delta’s service suspension was to last longer, I have to think that an unpredictable and incredibly harsh natural disaster is a pretty good reason to halt service temporarily.

But, with all that in mind…I do think that United and Continental have a very interesting point here that they didn’t bring up (though it wouldn’t affect the dormancy rules). In early March – before the earthquake and tsunami – Delta updated its schedule to reflect a capacity reduction at Haneda, replacing 747s with 777s this summer. As the always-useful Airline Route blog points out, the use of the 747 was a selling point for Delta’s service to Los Angeles and Detroit.

In its tentative order awarding the slots to Delta, the DOT said that Delta’s “significant capacity advantage is particularly compelling at Los Angeles,” and said in its final order that using the 747 on the LAX-HND route would “inject significant capacity into the U.S.-Tokyo market by Delta’s use of B747 aircraft.”

The DOT also said in its tentative order that Delta’s “proposed use of B747 aircraft for its Detroit service would also maximize use of its hub gateway in serving Haneda.” Delta said in its application that it “is proposing its largest aircraft – the Boeing 747-400 for Detroit. The 403 seat capacity of the 747 will help to maximize the value of the scarce Haneda slots that are available to U.S. carriers.”

Why do I bring this up? When objecting to the awards to Delta, both United and Continental (separate at the time) expressed doubts about Delta’s plan to utilize the 747.

“The likelihood that Delta would continue offering two daily B-747 flights between Detroit and Tokyo, one serving Haneda and the other serving Narita, is questionable,” said Continental. “If Delta operates its Haneda flights with smaller aircraft or terminates them altogether the Department’s premise for awarding Delta Haneda authority would evaporate,” the carrier added.

United warned that “the purported capacity advantages of Delta’s proposed Los Angeles and Detroit service may be largely illusory,” noting that Delta “already operates daily non-stop service to NRT from Detroit and Los Angeles using B747 aircraft. It may have considerable difficulty selling twice as many daily seats at Detroit, where the local market is far too small to support a doubling of capacity, and at Los Angeles, where extensive Tokyo service already exists and where Delta’s prospects of generating any significant volume of connecting traffic for its HND service are slim.”

In the case of Newark-Haneda and San Francisco-Haneda, Continental and United would’ve operated the 777-200, obviously much closer in size to what Delta has currently scheduled than the 747-400 service originally proposed.

Interesting stuff.

Not surprisingly, this has been an issue with the merger of the two carriers.

The issue already arose late last year after United began scheduling larger regional jets (operating with Continental’s code) out of Continental hubs such as Houston and Newark. Continental’s pilot group, represented by ALPA, filed a grievance over the plan, and an arbitrator ruled that the flights did indeed violate Continental’s contract. These flights are still operating, but only with the United code.

Photo Credit: Jay Bowie.

Without a doubt, this ruling was a victory for Continental pilots, but we still have to pilot groups that are yet to be under a joint contract. How is scope handled when there are two pilot groups at one merged airline with very different contracts?

The decision to schedule larger regional jets out of Continental hubs in the first place suggests that United management is currently running with the United pilot contract, which provides the most flexibility for the company, but will likely cause the most angst among (Continental) pilots.

While the Continental pilots were able to secure an arbitration victory late last year, who knows what will happen in the future? It appears that the arbitrator only ruled that United can’t put the Continental code on the flights in question. But what’s the difference what’s the Continental code disappears? In such a situation, it would appear that management will have much less incentive to negotiate over scope than the pilots, where scope has serious job security implications.

How this will be negotiated is quite interesting. There’s a full range of possibilities out there, anywhere from a relaxed scope clause in exchange for better pilot compensation to larger CRJs and E-Jets becoming part of the mainline operation.

Either way, this issue is far from resolved, and can either be negotiated in the short term, or become a long-term source of labor strife. In addition, it can also have significant impacts on the orderbooks of United and its regional partners.

According to a January guidance, domestic capacity was to decrease from 0.5-1.5%, but will now be down from 1.5% to 2.5%. International capacity will still grow, but at a slower rate – 2.5% to 3.5% instead of 4.5% to 5.5%.

The news release also had a line that is sure to fuel some interesting speculation – the airline said it was “analyzing the removal of certain less fuel-efficient aircraft from its fleet.”

When we last saw oil prices north of $100, then-separate United and Continental primarily focused on their fleets of 737 Classics. In 2008, United announced that it would be retiring its entire fleet of more than 90 737-300s and 737-500s. Continental began phasing out the 737-300 completely, and also reduced its number of 737-500s. At the end of 2007, Continental had 40 737-300s and 68 737-500s, while today only 34 737-500s remain.

Could the 737 again be a target for fleet rationalization? The average age of a United 737-500 as of December 31, 2010 was 14.9 years. Three  fleets (747-400, 757-200, 767-300ER) are older. Not that age is the driving factor, I just found it interesting. One part of the United fleet that continues to intrigue be is Continental’s small fleet of 767-200ERs. United also operates fairly large aircraft – such as non-ER versions of the 777-200 and the 767-300 – on some domestic routes, if gauge is something to be considered.

The other issue, of course, is replacement. United said in its 10-K that its first 787s are slated to arrive next year, which could serve as a 767 replacement. Continental also has new 737s on order. Meanwhile, United’s A350 order is still on the books. In the case of the 757 – could United grow its fleet of 737-900ERs to replace the aircraft on certain domestic routes?

One wonders how this would all be shaking out if the 787-8 had been delivered to Continental as originally scheduled.

On a side note…if United is looking at 737 replacements, especially the -500, I wonder what they think about the CSeries? Then again, through the merger (and depending how pilot negotiations go), the Continental piece of the new United gets more flexibility with larger regional jets.

Lots of speculation to be had here.

A Continental spokesman says the combined fleet of Continental and United continues to be evaluated after their merger closed in October 2010. No final decision has been made about upgrading the 767-200ERs, or when such a modification would take place.

Upgrades on the rest of the Continental international fleet, however, continue. The airline recently completed installing the new product on its fleet of 22 777-200ERs. Meanwhile, 32 of its 41 757-200s have been refitted, with the remaining aircraft planned to be completed in July.

The carrier says that upgrades on tweleve 767-400ERs are slated to begin later this year, with completion slated for June 2012. Four 767-400ERs flying for Continental Micronesia will remain in their current configuration.

Continental merger partner United has also been refreshing its long-haul product. The carrier has completed refitting its 747-400 and 767-300ER fleets with new interiors that include lie-flat seats in first and business class. Eight of United’s 46 777s have received the new product as well.

Continental’s new BusinessFirst was first placed in revenue service in November 2009, onboard a 777-200ER.

Their scope clause – which specifies how much flying can be outsourced to regional carriers – only allows smaller regional jets. That’s a big reason why the only large regional aircraft you’ll find at Continental is the Colgan Q400. Continental’s pilots said United’s plan would violate their scope clause, since these were flights flying out of Continental hubs and also have the Continental code. The issue was brought to arbitrator - who has ruled in favor of the pilots.

“Placing the CO designator code on the UAX jet aircraft with a certification of fifty-one or greater seats to and from CLE, EWR and IAH is a violation of Section 1 of the Continental/ALPA collective bargaining agreement. The Company is ordered to cease and desist advertising and placing the CO code on such flights,” said the arbitrator in his decision.

It’ll be interesting to see how this all pans out, especially since some of the 70-seat flying was slated to start on Tuesday.

UPDATE – Bloomberg reports that the flights can continue under the United code.

Merger partner Continental was also supposed to start up service to Lagos about a year from now with its shiny-new 787-8 aircraft, but Boeing’s delivery schedule has slipped since the announcement this summer. But the airline has said that a 777 will be used on the route instead. (No word if that 777 will be a 2-class Continental bird or a 3-class United 777).

Meanwhile, Continental’s other 787 route – Houston – Auckland – has been pushed back to 2012. According to this article, Continental says a 777 is capable of flying the route, but apparently the numbers don’t look as good as they do with a 787. The airline also cited that it could be difficult to find room for such a route in the schedule with all of Continental’s other 777 routes. My guess is Continental forecasted that demand for this route would be a bit on the thin side – which is the exact kind of route route the 787 is meant for – and a 777 would just be too big.

United ended Ted flights to both of these cities in September 2008, so this is more of a restoration than anything. Then again, since this was announced post-merger, United’s already there with Continental’s service.

Anyway, Fort Lauderdale will receive double-daily flights to O’Hare with Continental 737-800s,  and one flight to Denver with 737-900ERs. Meanwehile, Palm Beach will see a single 737-900ER flight to Chicago.

Both stations used to have Dulles service as well (though Palm Beach’s IAD flight was cut before the station was closed).

Anyway, this makes sense. Back in 2008 it probably didn’t make sense for United to keep these stations open, but now the environment is a bit better, and plus the existing Continental operations are utilized.

Meanwhile, I guess this makes some more attractive connections for those Gulfstream flights Continental operates out of PBI and FLL.

It appears that this issue – which undoubtedly would be a huge issue in creating a joint pilots’ contract – has become even bigger, with United planning to operate larger regional jets out of Continental hubs.

We knew this was coming to some extent when United announced earlier this year it would begin flying between Aspen and Houston with SkyWest CRJ-700s. But in the past couple of weeks we have heard even more  about it. During the new holding company’s third quarter earnings call, CEO Jeff Smisek said this:

…United Express will begin service with 70-seat regional jets for flights out of our Cleveland, Newark, and Houston hubs that are currently served by 50-seat regional jets. The introduction of the 70-seat aircraft to these markets not only allows us to better capture demand, it offers customers a great product and the choice of a first class cabin.

Meanwhile, some of the new routes United recently announced are currently slated to use SkyWest CRJ-700s. A filing with the Department of Transportation also indicates that United wishes to use CRJ-700s on some Mexican routes.

First – let me say that I think larger regional jets out of Continental hubs can make sense, especially on some of the long routes flown by ExpressJet ERJs, like Houston-Toronto, which clocks in at 1,280 miles. Compare this to Delta, which has committed to putting first class on all routes longer than 750 miles. On longer routes a first class cabin (and Economy Plus – whatever the future of that is) makes great sense for additional revenue, and elites will certainly welcome the upgrade opportunities.

The CRJ-700 certainly fills in a seat gap for Continental between the ERJ-145, and Continental’s smallest mainline aircraft, the 737-500. Continental also has the Colgan Q400 at its disposal, but that is a small fleet and there are currently none based in Houston. Plus, I would argue that the Q, while speedy, is not the best choice for some of the longer stage lengths.

And  perhaps the CRJ-700 just offers better economics than the ERJ in some markets. For example, Continental tried Houston-Bakersfield with ExpressJet but cut the route, but will now give it a shot with the CRJ-700. (Of course, there are other factors – airport costs at Bakersfield are probably lower because existing United facilities can be used, and plus you have any network synergies provided from the merger.)

The other sense I get is that right now the CRJ-700 will be used for new routes – like Houston-Aspen, or will replace ExpressJet flying. Now, that’s certainly better than an outright replacement of mainline flying, but I doubt that changes perception much.

The move does not appear to be sitting well with the pilot group at Continental, who appear to believe such flying would be a violation of scope. For example, a union update was recently posted on a forum. I’d highly recommend reading the whole thing, but this line sums it up pretty nicely: “To attempt to circumvent the Scope section as almost the very first action of the merged UAL can only be viewed by our pilots as a direct affront on our interests and an insult to each of us.”

While CRJ-700 service out of Conitnental hubs certainly provides plenty of benefits – I don’t think this sends the best message to labor. Personally, I think waiting might have been a better move, but I’d have to assume that United’s new management team already analyzed this situation, and decided that the benefits outweighed any potential blowback.