Originally Posted by
Irishblackbird
I keep hearing this on the line and in the forums. I don't think the big 3 are going to give up domestic market share without a fight. International is obviously their bread and butter, but with that market recessed and probably not coming back for quite sometime, whose to say they won't evaluate their market position and concentrate assets and resources toward the preservation of these markets.
They undoubtedly will TRY to do that, if for no other reason than it may be a couple of years before international and business travel comes back. But structurally they are at a disadvantage.
With as many as nine (9) different fleet types, and with the majority of their international flying being done by their most senior people, they have a real problem. All their furloughs are going to come from their Junior (and mostly domestic) flyers Who are flying their most junior aircraft. But before those people go someone else will have to be trained to replace them because those senior to them likely don’t have the same type ratings. Think about it - how many FOs with the seniority to avoid a furlough are going to have an A220 type? So you pay the junior people you are about to furlough to do the flying while you are paying the senior guy to learn the type. So OK, the FO you are going to downgrade to the A220 was flying the 737. You are going to have to downgrade somebody else - maybe flying the 757 - into his slot. Another type rating. The guy replacing him is An FO flying the A330. Another type rating. The guy replacing him is an FO flying the 777 or 787 whose last type rating before that was in the 727. And you go through the same thing with displaced captains. They’ll displace to the extent they can where it is monetarily or geographically best for them among the options available to them. If it happens to be most cost effective for management, that’s fine, but it’s unlikely to happen. You get a hellacious domino effect of expensive training events while you largely wind up with your most expensive equipment - equipment poorly suited for strictly domestic flying - sitting for lack of passengers and the cheapest part of your labor force furloughed, while simultaneously pi$$ing everybody off from the churn.
The /LCC ULCC starts with a less expensive labor force, can continue to utilize all their equipment, and other than the training cost of downgrading a Captain for every two or three FOs they furlough, really don’t incur a great deal of expense.
That doesn’t mean that the Big Three can’t or won’t compete, but it does mean that they are at an enormous CASM disadvantage when they do while simultaneously paying to park a whole lot of equipment poorly suited for domestic flying.
Worst case EVERYBODY loses money in a giant game of chicken, waiting for the other guy to raise seat prices first. Somebody - or even several somebodies - might go bankrupt before a winner emerges.
But it’s like the old Kipling story goes in Arithmetic on the Frontier:
Strike hard who cares -- shoot straight who can --
The odds are on the cheaper man.