Food For Thought: An Exclusively WO Future?
 

With the recent announcement that American is severing ties with ExpressJet and Trans State, I began to ponder the future of regionals within mainline networks.

What are, in your opinions, the benefits and disadvantages to AA Group operating with exclusively wholly owned regionals? What are some arguments for and against the idea?

On one hand, it makes a greater financial risk for AAG to use only in-house regional carriers, as it increases the likelyhood of an economic downturn directly affecting AAG. However, if third parties aren't able to meet the requirements of their CPA, this could offset the negative effects of delayed, cancelled, and otherwise unfulfillable flights.

I know it's not likely that we'll see this happen, but I thought this might be an interesting thought experiment.

I was thinking along the same lines. Recent news points to expansion of WO flying (new AAG orders for 900s and e175s, PDT and PSA base openings) and reduction of flying by other contracted carriers.

Good news for the AAG WO pilot groups? Hopefully 🙄

I think the future for the American Eagle flying is this:

Envoy
PSA
Piedmont
Republic
SkyWest

Any of the others I would say are no guarantee. Maybe Mesa? But I see them struggling.

I would even go as far as saying Republic going away with Envoy and Skywest picking it up directly. Then PSA helping out with taking some of their eastern flying.

Honestly I see SkyWest going away before Republic does. Envoy can easily take over ORD, and LAX flying. Mesa isn't performing as bad as everyone says based on what I see in AirPortal.

Sent from my SM-G955U1 using Tapatalk

At least two contractors to keep the WOs in line if need be by using ye ol' whipsaw.

Skywest has the used 700 market cornered and American has a huge advantage with scope considering 700s with 65 seats or less counts the same as a 200/145. Including Expressjet, Skywest operates 50 700s for American. I doubt American wants to give up that competitive advantage and it doesn't make sense to order new 700s.

Compass is next on the chopping block with their 20 American owned E175s likely going to Envoy when their CPA expires. Who knows with Mesa and when their CPA expires.

From what I’ve been reading it’s to control the product. It’s to give a “seamless transition” from mainline to regionals. When you have to many contractors it gets harder to offer a better product with consistency. So this allows American to control its product and better assist customers, with out putting all the eggs in one basket.

I think Mesa has several different CPAs of varying length for the Eagle lift. They have one up for negotiation in 2019 and the remainder are spread out a few years behind that. But Mesa also owns many of their CRJ900s though I believe. American may only own a handful of them.

I doubt Republic will go anywhere as AAG owns a percentage of the company after the bankruptcy..