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Old 10-10-2010 | 10:17 AM
  #8  
captfurlough
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Joined: Jun 2010
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It's all about money....and will be all about money.

First, let's put history into perspective. The commuter industry started out with Twin Otters and Beech 99s....19 seat unpressurized aircraft. As the business model took hold, operators looked for additional opportunities, and manufacturer's developed larger airplanes, and logically some were adapted for commuter use from corporate aircraft. Mainline carriers were happy to look to commuters for system feed. This resulted in unprecedented growth for the commuter industry...now termed regional industry...which created a new paradygm for those begining their careers. Demand for 50 seat pilots created an "entry level" opportunity that didn't exist before. There were many pilots who benefited from this situation, and who came to the industry with a fresh commercial, instrument, multi engine ticket and 500 or so hours and won a right seat in a CRJ. For those pilots coming from the civilian ranks, as long as the economy was moving and the mainlines growing, this new path to the majors was a win win. The primary vulnerability was the major's ability to reselect partners at the lowest bid every few years, creating a level of instability within the regional industry.

In recent years the regional business model has been favorably impacted by the economic recession, which thined out traffic on mainline routes and made them unprofitable with narrowbody aircraft. Naturally the legacy carriers looked to "right size" the aircraft and turned to their regional partners, now operating aircraft with 70 or more seats. The end result as we all know, is that regionals now account for about 50% of all domestic US flying. Again, this represented unprecedented opportunity for large numbers of new pilots, while mainline or legacy carriers have furloughed thousands of their pilots. Career movement from the regionals to the legacy carriers, and within the legacy carriers, was virtually stoped.

Fuel costs have escalated to the point where 50 seat aircraft have became much less profitable on a seat mile basis, and now regional carriers are looking to "retire" large portions of those fleets.
If anything, the lesson here is that the relentless drive for the lowest seat mile cost IS the new paradygm...and if you use that model to forecast the future of our industry, you're crystal ball will be as clear as anyones.
Mainline or legacy carriers will seek to lower unit costs and maintain flexability by outsourcing flying in larger regional jets...say 90 to 120 seats. Some regional carriers are already preparing themselves for this...RAH for example. Others are will follow as they rid themselves of most of their 50 seat fleet, and seek to consolidate to achieve economies of scale.

Mainline pilots are only now begining to realize the significance of these changes, and with decades of time and effort invested in thier careers, can be expected to fight back and insist that this flying is done in house.
They'll only be sucessful if they agree to wages (or more accurately labor costs) competitive to what the regional industry can provide in these smaller aircraft. But they'll be fighting an uphill battle with management who might still prefer the flexability and advantages of contracted lift capability.
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