Eagle Flying vs. Skywest / Expressjet
 

First off I'd like to express my disgust with how the regional system works in the cycle of contracted flying going back and fourth. Even if I get to keep my job for another day it still makes me sick that it comes at the expense of a large group of other people living life just like myself. I feel for you guys and wish it could be different. This actually effects the industry as a whole but many people just see the short term benefit to themselves. In the end it will all wash out.

I wanted to start a thread to see if anyone has any real information as to why AMR decided to start contracting out flying from their own contracting company to another. Not just the old cynical APC view but a realistic view of what logic they used in their decision and what long term financial benefits they are hoping to achieve with this movement.

It just doesn't make sense to contract out flying that has already been outsourced.

I can think of at least three things that really don't make sense with how they gave this flying away.

• Skywest and Expressjet are kind of what could be considered the premium of regional carriers. Sure they are just regional carriers but they have been around a while, have made a ton of money, never went BK, hardly ever lose money and have a wicked heavy pilot group with respect to seniority. I can't imagine SKW or XJT are doing the flying any cheaper. If anything you would think it would be more expensive. Why not some cheapo (Gojetz style) carrier?
• ERJ vs CRJ - Does anyone no for sure if one is more expensive to operate than the other? It would seem as if the CRJ is. I only say that because of the operational speeds and altitude differences. I know that ERJ can get up to the mid 30's easily fully loaded. That CRJ doesn't usually make it up there especially fully loaded. This has to impact efficiency.
• Transitional expenses - New paint, facility changes, and certification process have to cost money as well. Seems like more unnecessary spending.

I'm sure there are other drawbacks to the whole CPA that I'm not thinking of. So what factors were so cost beneficial that swayed them into the shift in flying. I have some understanding of business principals but the normal ethics seen in everyday business do not apply to aviation for some reason.


Thoughts?

If you are looking for "real information" as you say...you better ask AMR, because they are the only ones who know why they are changing their model or what influenced their decision to decide on SKW. Besides in the grand scheme of things it doesn`t really matter who, what, where or why because as past indicators have shown it has happened before and it will happen again.

He's really got a point here, guys.

Well the 200's out of DFW will not need to get up into the mid 30's cause they will be doing all the short haul flying.
As for the reason, well AMR doesn't want all it's eggs in one basket - Eagle. They want to be able to play regionals against each other to get the lowest price. Right now they must be willing to pay a little premium to farm out that flying so they can scare the AE pilot group into a concessionary contract.
Closing LAX as an Eagle base - well it's the only domicile that other bases don't fly thru. Meaning a DFW pilot will pass thru ORD or MIA on their sequence, but not thru LAX. This creates issues with spare planes, crews, etc. Not to mention its a pretty small base to begin with.
Just my $0.02.

I'm willing to bet its an issue of aircraft financing / leasing terms. SkyWest INC and Eagle have similar operating costs, but INC has a AAA credit rating and can get significant discounts on financing terms compared with AMR's bankruptcy credit rating. These savings in financing add a lot of money to the bottom line and allow INC to bid very competitively with other regionals.

To the OP. We've seen this play out before. Whether or not it was USAir in the 90's playing their regional feed providers against one another, or though the BK era when it happened in a grand scale. Unfortunately, your questions are ALL valid and they ALL make sense. Problem is, this industry and the way it trickles down to the regional level DOESN'T make any sense. Yet seems to function on a daily basis. And if you think about it, almost all your questions have been answered before piece meal in one variation or another.

The ORD -700 guys I talk to have trips that fly through LAX.

You sure or do I only imagine all of my trips on the 700 go through LAX.

He did say DFW pilot fwiw

Unless your -700 has a full EMB reserve crew DH'ing and you're towing a spare 140 behind you glider-style, I'm pretty sure the point av8 made is still valid.

What I find interesting is that I read somewhere that when AA first asked SKW to do the Eagle flying, SKW told them no, because they wouldn't do it at a loss.

Isn't it funny that SKW is now doing Eagle's flying?

To be clear, nothing against SKW pilots; they had no say in the matter. It's just another move in the regional game.

This is AMR they will spend a buck to save a penny. As one of the guys getting displaced I hope it fails miserably but I can see some reasons why they chose to do it.

1. The 140s and 135s are getting returned. We have known this for almost a year. The LA base is made up of only 10 140s. The only city they share with other bases is SAF and the LA flight is just a turn. If a plane needs to get into the DFW system they either ferry it through ROW or GJT and swap with an RON or just ferry it direct to ABI like they did a couple of weeks ago. If it is known way in advance they might add a revenue flight to SAF but that has only happened a couple of times.

2. The performance numbers in LA suck. What really sucks is it is not the LA base bringing down the performance. The CRJs are breaking daily with no spare aircraft or crews, the CRJ crews are taking delays because they have 9 hour overnights in LA at a hotel that can take an hour to get to and an hour to get back with no scheduled shuttle service, and the CRJ FAs like to call in sick in the outstations (where they live) or get arrested like the FA in SAN last month cancelling a kick off flight.

3. LA is very senior. The top 25% of the captains have been here 20+ years, the junior captain is a April 2000 hire. The junior line holding flight attendent has been in LA over 10 years. This is going to cause a lot of these senior people to retire reducing the overall costs of the company.

4. California has laws the company doesn't like. Ever hear of California sick?

None of us have any ill will toward the Skywest or XJT guys it's not your fault it's our managements. Also talking with the Skywest guys in the hotel van the other morning they were saying the flying will go junior since it is -200s and they know how bad our ground personnel are. They actually make Menzies look good. Expect to wait 10 minutes every flight to get parked, air hooked up, gpu hooked up etc. The only descent station we have is SMF and that is because we use Horizon people.

The company had to use a good contractor. Many of the One World carriers have high standards for their codeshares. I believe that is one reason why the American Eagle brand will be put on the Skywest/XJT flights. I do consider XJT and Skywest to be among the best regionals and would have no problem putting my family on their aircraft.

I believe the ERJ is much more economical than the CRJ. The CRJ does hold 6 more people though. The ERJ can go to 370 at MGTOW while the CRJ can barely make it to 320 and needs to do a flaps 20 and APU ECS takeoff. We do go to 370 on RNO-LA and LA-TUS we used to do it on SJC-SNA and SAN.

I think if they really wanted to do it right they would have a Q400 operator flying out of LA to FAT, SAN, SBA, and MRY and have the CRJ do RNO SMF SJC TUS, PHX and SAN-SJC-SNA-SFO again.

That's a great visual... for visual sake. Hope to God it doesn't get to that point. What am I saying. Hope I'm long gone before it eventually happens.

There is no problem, if a CRJ-700 would break down or get stuck flying out of LA then AMR would just assign a ERJ to it, they would downgrade it. This happens in all the bases and LA is not an exemption.

So nobody thinks Skywest is doing this flying at a loss? These CRJs were going bye-bye anyways ... is Uncle Jerry on the hook for the payments whether they're flying or not? Isn't the US Airways flying at a loss?

Exactly. Every time I bring this up, Skywest people get on and say its not true. People have told me it was fact checked and confirm the flying is perhaps not at a loss but not at a profit either. It's a smart business move but killer on the competition. They had planes coming out of the DAL system with nowhere to go. Better to fly at a small loss, than a bigger loss with the plane parked and still having to make
payments.

You nor do I or anyone else on here know if this is a fact or not. The one fact is that SkyWest has been one of if not the most profitable regional airlines for the past 20 years. With said I doubt SKYW management offered to do this flying at a loss.

I have to ask because I see the other posts at different times. Can somebody explain to me the difference in attitude toward this type of change in flying than when GoJets is awarded flying? Do not think I dare side with any regional, I am just asking for a better understanding. I respect SkyWest and thier pilots more than any regional out there. Just simply trying to understand a bit better. Thanks!

First, this is not "new" flying for us. These airplanes are coming out of the DL system straight over to AE. We are not hiring any additional pilots, but rather will be displacing guys over to DFW to staff it.

Secondly, AE is not going to be furloughing as a result of this. Yeah, LAX closed and that sucks, but no jobs are being lost as a result. In fact, last I heard, the furloughs were being recalled.

Roughly 12 Skywest ground handling stations were closed and given to Eagle. Jobs were lost but because it's just a bunch of lowly rampers nobody here really cares.

Actually, a lot of us cared quite a bit. We lost some damn good folks on the ground at stations like SBA, SAN, EUG, RAP, etc. It is extremely frustrating and disappointing to go into those stations now.

I agree, the last sentence was full of sarcasm and generally directed at people who are merely displaced by this verses being sent to the street.

Unfortunately your own management says that you cost more to operate than AE, and AE has been more profitable for the last 12 years. Me thinks skw isnt making much money on this deal.

Not that I care. It is what it is, and the reasons don't really matter. Mgmnt will do whatever they want.

:GOLF CLAP: You still have zero facts as to what rate SKYW offered to AMR and until then your just blowin hot air...And if you don't care I'm sure you'll stop posting now. As for making money part that has become much harder in the regional business lately, which I'm sure a stand alone AE will soon realize.

What is your reasoning for that?

This makes sense. A lot of the benefits that AE has enjoyed being under the AMR umbrella may soon be gone and possibly expose a generally inefficient operation.

It will be interesting to see who gets most of the stakes in a divested eagle.

Well since AE guys are so smart and better than everyone else, they will be just fine.

this is stupid post, and could easily be said about Skywest.

It could be said, but it wasn`t :)

This thread is starting to sound like a bunch of flies arguing over who is at the top on a pile of dung.

I 2nd this! A lot of us care. It's very frustrating and we lost some good people.

Well, on the legacy Expressjet side we hired something like 700-800 new pilots over the last two years, so we have about 1/4 of our group on first or second year FO pay, so despite having some really senior guys we have a lot of new people as well.

As far as the ERJ vs the CRJ I have no idea, but we are also the only company with the 145XRs, and they are better than 1/3 of the total fleet. They've got to be more efficient than just about any other 50 seater out there, at least in my opinion. They burn more gas in the climb but they climb to altitude WAY faster (was holding 3000 ft/min for a while with a full plane yesterday now that temps are coming down some), plus operating over longer ranges at higher altitudes means a higher percentage of time in the more efficient realm of flight. Plus, you can operate out of hot and high airports that I don't think you can get a CRJ-200 into.

That being said, I'm speculating and I really have no idea which plane (145 vs -200 in general) is more efficient in total from a combination of fuel+maintenance costs.

Now, on the legacy ASA side they definitely have a LOT of really senior people and not a lot of hiring over the past few years.

American Eagle warns of 146 layoffs in Miami - South Florida Business Journal

Sooooo 77 furloughs at Eagle?

I believe the pilots and F/A's will simply transfer from NA to MQ and will not be layed off.

Recall letters have already gone out. Most guys don't meet ATP mins. I have heard that those with apps on file have been getting called for interviews but most do not have the mins either.