I don't think you understand the question. What I'm getting at is, American (for example) has a contracted pilot labor force to do its flying at certain pay rates. Then American decides it wants pilots flying their passengers at cheaper rates, so instead of negotiating it creates "separate companies" that it owns, manages, and directly collects profits from (meaning, not so separate). I'm questioning the legality of this, not to mention how the heck the mainline union allowed it in the first place..

Even with scope voted away I don't see how it's legal to sidestep their labor contract with their pilots by making wholly-owned companies that it owns, manages, and directly collects profits from, for the sole purpose of acquiring cheaper labor costs to fly the very same passengers. Outside contracts with separately owned and managed companies (regionals who keep their own profits) make more sense, legally anyway. It also keeps the negotiating table more balanced. Would be much harder to negotiate pay cuts, for example, without the threat of being shut down by your parent carrier. The regional carrier could simply find flying elsewhere, and the parent would lose their feed (requiring more mainline pilots or another contract).

Hopefully that makes more sense.