Which Regionals will survive a recession?
 

I'm about to start interviewing with the regionals. I'm figuring that there will be a recession in the next one to two years. If there is a recession are any of the regionals in a better (or worse) position to survive it?
Better contracts with the Majors, better financial stability, better management, own their own planes, those kind of things.

SkyWest.

Place has its detractors (including myself). But they managed to survive for 35+ years. If asked to bet, I’d put my money on them.

Most likely survival candidates are AA Wholly Owned regionals, Endeavor, Republic mainline and SkyWest mainline.

Compass-- hands down... jk
We cant even handle good times

This would be my exact list as well.

Those will probably be the only regionals in 5 years.

Depends on how much they want to pull the stops out. If you started an ab initio program where you pay nothing I think there would be lines around the block multiple times. The cost of training someone is nothing compared to what they save in decades of salary difference from mainline to regional.

These will be the only ones left in 2 or 3 years ,it won’t take five.And where can I apply for republic and Skywest MAINLINE ???

I would think at some point the 3 AA WO will be consolidated under one company (American Eagle?). The other three I am in agreement. I would add Horizon. Whether any are mainline, I have my doubts.

Consolidation from 20 ‘major’ regionals to 5. Only a few remaining specialty sweet shops, such as in Alaska and servicing EAS.

Instead of 20,000 pilots, about 10,000 pilots flying regionals. Most of the 50 seats parked (only places remaining are where it is nearly impossible to fill a couple of 76 seats in a day).

A lot of 76 seat flying replaced by mainlines flying 100+ seats. That does not mean reduction of pilots, rather moving a substantial chunk of regional pilot slots to mainline slots.

I've heard the thought that the three AA WO would be consolidated. I just don't think so. AA did that years ago to where they merged several airlines into the previous American Eagle. Then, after the bankruptcy, they diversified again. They need to keep them separate for whipsaw.

Whipsawing is appropriate with the old environment. One where there are plenty of pilots and you can play one regional against the other.

In the next few years there will be such a shortage the majors will want to hold their regionals tightly. If they play whipsaw, the regional they reduce many never get enough pilots back next time you want to play whipsaw.

Whole different way of thinking will be required.

Air Wisconsin has survived 7 recessions in its 53 year history. Yet they will most likely not appear on anyone’s short list on this thread. And maybe they shouldn’t.

My point is I agree that the current total amount of regionals, total aircraft in said regionals and total regionals pilots will go down over the next 5-7 years but to predict who will survive and who won’t based on today’s flavor of the month is impossible. Just go back 5-7 years or 5-7 before that. Would ASA, ACA, Comair or Expressjet be on these shortlist’s? I bet they would.

Pick your regional today not on the future but on the now. Look at pay. Work rules. Bases. QOL. Upgrade times. Flows. Figure out the importance of each and you have your answer. If your pick is gone in three years well you got 3500 total with 2000 121 hours with maybe 1000 121 turbine PIC. Even in all but the worst of times you could get another regional job with those numbers. In the mean time you had a good QOL for the past 3 years.

And if your pick is still there that means times are good and with those numbers you should be competive at all LCCs and if the trend continues - legacies as well.

I predict that the regionals that still exist in 5 years will be the ones without a fatal accident. As for the rest, even if they don't exist in name the pilots and airplanes will still exist under someone else's name after a M&A. And this.

Another thing to look at is how big are these regionals. For example, Skywest will survive. But when this next recession hits, all the majors will be putting the skids on and that will affect the regionals. Skywest has a lot of pilots that might be in trouble when the next big recession hits shortly. And the “they’ve never foroughed before” argument won’t fly this time. Different times.

At least people will stop asking “how long until I can hold a line”.

Also at this point regionals could start branded flying selling code shares.
They can’t be replaced.

I predict that - barring a really severe recession or oil price shock - the current crop of regional pilots are going to be fine. The regional pilots acceptable to the majors will soon move on, their careers buoyed by the wave of age-related mandatory requirements coming. The regional pilots NOT acceptable by by the majors for whatever reason (inadequate education, DUIs, training busts, embarrassing tattoos in non-concealable areas, etc) will either find employment with some ULCC or become so senior at their regional they will be bulletproof.

Those in trouble will be those only now starting to get their ratings, convinced that the current good climate for career progression will last forever. Even sponsored ab initio people, should that actually happen, are at risk for their programs coming to a screeching halt when progression disappears for a half decade.

Yes, majors have learned this lesson. They tried consolidated WO's, with mesa the bogeyman in the shadows to keep the cost pressure on but it didn't work.

Yes, this is a very real factor and one of the reasons regionals exist. Allows the majors to enjoy some lower costs associated with less experienced labor and still have a layer of brand insulation which can be shed when necessary to protect the real brand.

Here’s my wild predictions:

AAG buys Mesa and in 5 years Mesa / PSA merge and Envoy / Piedmont are merged. 90% of the American Eagle regional flying will be done by these 2 WOs and the only civilians that make it to AA go through them.

RAH buys the TSH regionals and they are all folded into Republic.

SkyWest grows for now but will begin to retract within the next 5 years.

Endeavor continues to grow their Delta Connection feed and will likely eventually get some sort of no-interview flow with a couple strings attached (ie degree required etc)

Horizon keeps on flying for Alaska and ends up with a better flow deal.

There will be some sort of consolidation of the United Airlines regionals. United will likely have to figure out how to purchase a regional or two to secure their regional feed long-term as both American and Delta slowly shift towards consolidation and in-house flying with their regionals. Air Wisconsin may play a part in this somehow.

Overall I think that the supply of pilots willing to fly at the regionals will find a balancing point. Right now I hesitate to even call it a shortage since everyone is still managing to fill classes for the most part. More a, “squeeze” on the pilot supply than anything else. I think though that once the legacies start pouring more money and support into the pipeline at the entry-levels this will slowly work itself out. I don’t think a true shortage exists. But I think the industry is going to go through a period of intense change over the next 5 years.

If free ab intio programs were put into place I don’t think there would ever be an end to it. The cost of flight training is the main barrier for potential applicants. I was reading something recently about how 50% of the US population makes less than $27,000 a year. We also have a population of 325 million with 100 million of that out of the workforce. They changed the way they calculate the unemployment numbers back in the 90s to only reflect those that are currently collecting unemployment benefits. I didn’t used to think this way but I believe there are tons of people out there in not so good situations that would gladly get in line to be an airline pilot as long as it doesn’t cost them anything.

Why are you figuring there will be a recession in the next two years? I am also considering applying for the regionals (Skywest or Compass in particular). I currently have a comfy desk job in the LA area making a good living and a great schedule. I left the airlines 14 years ago after everything went downhill post 9-11. I stayed current, flying GA, and still have my CFI. But that desire to go back to the 121 world has never left me. My wife (and 3 kids) are on board as well, since we've been discussing it for a year. We've been looking to get out of California, and this was our planned exit.

I hope I haven't missed the wave and I'm to late! :eek:

100 million out of work? Yeah, probably. Children, students, retirees, housewives, kept women, slackers, trust fund babies, etc. Do illegals count?

I think the actual unemployment rate is pretty low right now... most people who want a job can get one, although they might have to move out of some ex-industrial backwater. If they're waiting for the steel mill to re-open, might be a long wait.

There will be some sort of slowdown eventually, it's inevitable.

The economy might just overheat and mush out for a while if nothing else happens. There's always the possibility of war or some sort of "black swan" event (ie 9/11) that might trigger a more significant downturn.

Baring a big catastrophe, I suspect the retirement numbers will mostly mitigate the effects of any slowdown on pilot career progression. You might stagnate somewhere for a couple years but that's probably the worst of it.

Yes the economy is humming along, but it's not showing signs of ridiculous exuberance.

My neighbor, who does residential real estate, noted a new paradigm.

In 2005, people were desperate to get on the speculative escalator before it left them behind.

Today, they are far more reluctant to buy expensive property, mostly only doing it for lifestyle reasons and only if they can afford it, not because they expect a windfall.

Yeah. Today the real estate investors seem to be more interested in finding something ridiculously dated but cheap that they can buy, rehab with mostly sweat equity, then use as a rental.

This filler

You don’t know much about basic Econ then do you? The unemployment rate and labor participation rate are two different things. Unemployment, like explained above, only shows those employed or looking for work. Labor force participation shows those that are able to work even if they aren’t looking as well as what is shown in the unemployment rate. Yes it truly is about 100 Million people that are able to work but currently are not even looking for work. Not kids. Not retirees. Not disabled. If I remember correctly, 18-64 y/o.

The unemployment rate is very low, but so is the labor force participation rate. We should actually see the unemployment rate tick up whenever wages start to tick up. This should show more people entering/reentering the workforce to look for a job.


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I’m told there’s good money in that.

I know plenty about it, but even so it's still mostly voodoo so I for one don't claim any predictive value.

If I wasn't clear before, I don't think there are 100 million people in this country who would like to work but cannot. There could easily be 100 million who don't because they chose to do other things... independently wealthy/retired, student, stay home with kids, whatever.

If you're talking working age adults, 100M is a very large percentage of working age adults. Rough estimate there are at least 100M kids/students + retirees in this country. So you're saying almost 50% of working age adults can't find work??? You're full of BS.

Reading comprehension is hard. :rolleyes: You put words into his mouth (incorrectly ) then told him exactly the same thing he just said in different words as your "truth". At least every day you mis-construe and then argue some inane point with somebody on here. You must be a real joy to fly with. Other then that I do agree that 100 million sounds a bit high for working age adults. You are right it includes retirees and children.

Google is so hard for arm chair pilot know it all's. :rolleyes:. Literally the first result.
The truth. https://money.cnn.com/2018/01/10/news/economy/95-million-out-of-workforce/index.html.


From the article.

The current Labor Force Participation Rate is 62.9%. The record high was in 2000 at 67.3%. As a historical comparision, when they started keeping records in 1948 it was 58.6%. In 1980 it was 64.0%.

I looked up the definition of the population base the labor force participation rate is figured on. (Civilian Employed / this Population Base = Labor Force Participation Rate as a percentage).

If I read and understood it correctly, this Populaon Base is all from age 16-64. Included in this base are:
* Students not working
* Homemakers not working
* People in the Military (they are not civilian)
* People in Prison
* Drug Addicts not working
* Disabled and Handicapped not working (physical and mental)
* Etc.

* Early Retirees
* People who choose not to work/would not accept work for whatever reason

* Civilian Employed People (full and part time)
* People Unemployed but looking for work
* People Unemployed but Not looking for work (discouraged and any other reason)

Where I live, in a upper middle class suburb in the northern part of DFW, the unemployment rate is extremely low (my guess is 1%). When I go to the grocery store I get asked by the checkout clerk if I have a wife or teenagers that would like a job, $10 and up no experience needed. CVS across the street is starting at $12.

Both the grocery store and McDonalds have recently added self service kiosks. Cannot find enough to hire, have to make the customer do the work.

Most of the pizza places and the like have you order at the counter. No wait staff. Cannot find them.

There are people of work age in the suburb who are not interested in working. You would find it almost impossible to draw them into the workforce. Stay at home moms, early retirees who are financially set, full time students, teenagers who do not need to work as their parents pay for everything (that is the subject of a whole different rant).

Just a little perspective on Labor Force Participation rate.

It’s, like, an allergy, Good Buddy. :D

https://m.youtube.com/watch?v=xJxwgNqgobM

Opioids are a hell of a crisis.

I understand it perfectly fine, thank you. I had a couple of the finer details incorrect. That doesn’t make my point any less valid that, aside from a few minor data points, we are at the lowest labor force participation over the last 40 years. It went up significantly in the 60s, leveled in the 70s, and declined until maybe 7-8 years ago. It has been pretty steady ever since.


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Except those finer details does make your point less valid. Since you tried to make people believe that 100 million capable working age adults were no. When in fact it's closer to 7.5 million.

In all, of the 94.6 million not working, 87.1 million were retired, in school, taking care of a loved one or physically unable to work.

That leaves 7.5 million people. What about them?

Of those, 1.6 million had looked for a job in the past year or wanted a job but had given up searching for more than a year. And 5.9 million workers listed "other" as a reason for not wanting or having a job. We don't know much about these workers.

Well yeah, that's why I called him out... he claimed 100M people involuntarily out of work, which is ludicrous.

I didn't bother to Google it, but my swag was pretty close to what you googled.

Sorry if your feelings got hurt.

They are capable but unwilling to find work. Are you dense?


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Reading comprehension is quite the problem here, isn’t it? Never once did I say these people were involuntarily out of work.


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I didn’t want to set off a fire storm. You have people come on here and say that everything is great in my suburb, but it’s not reality for many places in the country from what I have seen where I’m at driving around. This really isn’t even political it’s been going on for decades. I just wanted to point out that they would have a large applicant pool willing to become pilots for free training.

You really suck at reading comprehension. How do you manage to pass your KVs?