Quote:
Originally Posted by Mason32
With the lower and lower profit margins, it is just a matter of time before most regional flying will become wholly owned. The fact of allowing another administration to earn a profit that does not benefit the existing shareholders of the mainline company will eventually become an extremely hard sell...
The long long term results will be the eventual consolidation of the mainline companies with their regional wholly owned airlines....
1st the BOD's and shareholders will demand the money stay in house
2nd they will demand to reduce costs by consolidating services.....
Running two, or three, part 121 carriers side by side may help when you negotiate contracts, but if you compare the cost savings from only needing on mx dept, one dispatch, one SOC, one training center, and only one administration... the long term savings are incredible....
The smaller planes will become the entry level aircraft, and the current payscles will just stay about the same.... but the days of outside contractors being able to make a profit will eventually come to a close, as more mainline companies seek to keep every scrap of potential profit to themselves.
|
Hahahaha...what delusional fantasy world are you living in?!?!
Do you HONESTLY think that the current system of sub-contracting small aircraft flying is a recent or accidental development? Do you HONESTLY think that if it was cheaper or more efficient for a mainline carrier to fly every route on their own metal that they would still rather outsource that flying? Lets pretend you're even half-right and mainline carriers go back to the system of wholly-owned regional partners, THEY ARE STILL OUTSOURCING FLYING. And you, as a pilot at that wholly-owned regional, are still nothing more than an entry-level B-scale employee.
Why would any mainline carrier want to take on the additional risk and cost of operating their own regional unit when they can contract out that flying for cheaper. Even if they go one step further and bring that regional flying completely in-house and operate the regional aircraft on the same certificate and seniority lists, all you've done is increase your total labor costs (longer longevity), your fleet costs now that you've added a new type to your operation AND your own management overhead now that your operation is that much larger.
When a mainline carrier contracts out with 2 or 3 or 4 different regional carriers they don't care that there are 2 or 3 or 4 duplicated managements or operations people or maintenance or whatever. All they are looking at is a simple cost-comparison. They look at what it would cost them to do the flying themselves (cost A) and what it would cost to pay a small-lift operator to do the flying (cost B). If cost A > cost B then that flying goes to the small-lift operator. It really is as simple as that. They don't call them bean-counters for nothing.