Originally Posted by
PearlPilot
In the January issue of Aopa Flight Training magazine, Wayne Phillips writes that by 2016, every regional airline will be gone. Is this an accurate statement?
That guy's an idiot. The business model has the potential to change radically but it's not going away.
The big reason it's here to stay: If you bring all your pilots in-house you can no long whipsaw between feeder pilot groups, and between mainline and feeder groups. They will unite under one banner and RJ FO's will start at $70K, CA's at $120K...and it will go up from there. That's why DAL got rid of COMAIR and why AMR has been trying to unload eagle for years.,,if either had gone single-list, they would lose major competitive advantage to majors with outsourced labor.
Majors also rely on premium customers. SWA (and some other LCCs) have no premium customers, so they can just cherry pick routes with enough density to fill a 73. Legacies need premium customers, many of whom like to fly to to smaller towns...if they pull out of those markets, they will end up just competing directly with SWA in the hubs and bigger cities, while another legacy takes on their premiums flyers.
There are a few potential scenarios which could eliminate regionals. All of these would require massive reduction of service to smaller towns...
- Skyrocketing fuel prices. Bigger airplanes are far more fuel efficient than little ones, and this scales up. Little airplanes are beneficial to serve small markets and also to provide frequency (which premium pax love) in larger markets. But if gas gets too expensive they'll have to park small, inefficient airplanes. The silver lining to the recent high fuel prices is that it has encouraged the development of hard-to-produce reserves here in the US (fracking, etc). BREAKING GOOD NEWS: New petroleum reserves here in the US will make us energy-independent in 10-20 years (this surprised me too, but that's what industry observers are saying).
- Rampant green-ism: If we go off the deep-end with carbon reduction, the RJ's would be the first to go, since poor fuel-efficiency translates to poor carbon efficiency.
- Slot restrictions. If the national airspace, esp. major hubs, gets too crowded (it was headed there pre-9/11) then again RJ's will be the first to go.
But I suspect worse case, all the RJ's will go away and regionals will be left with a much smaller fleet of large turboprops.