I think there are 2-3 important details missing from this discussion:
1) The regionals exist to provide service to a major at a price the major thinks is worth the cost. If cost weren’t a factor, the major could fly the smaller airplanes directly with its own pilots on a noticeably higher pay scale. The fact that second year FOs at AA, DAL, SWA, or UAL make more than regional captains by a wide margin is a clue on cost.
2) The evolution of the wholly owned regionals gives a major a lot of leverage to protect their brand AND exercise leverage against other regionals in service contract prices, consequences for performance metrics, etc. All with the ability to make changes in the regional support routes and network without having to renegotiate expensive changes to service contracts with a non wholly owned regional.
3) A wholly owned regional has financial backing for growth that no other regional can match, allowing them to make business plays that would otherwise be out of reach. For example, Delta cancels XJT service contract, takes the CRJ900 fleet and gives it to 9E, then let’s 9E hire former XJT pilots to help staff the growth. Those pilots that want to stay in ATL took a huge pay and seniority cut to join 9E, 9E hires street captains that were experienced and easy to train, and there were no messy wrestling matches to merge seniority lists, etc.
If DAL can effectively kill part of a regional by ending its service contract, shift or acquire airplanes for cheap from a regional that no longer has a customer, and then pick up experienced aircrew that are newly available, how long before other non wholly owned regionals that only have one customer die a similar death?
Sent from my iPhone using Tapatalk