Speculation on the future of the regionals
 

Curious to know if anyone has any theories on the future of the regionals (and airline industry as a whole) given the current hiring environment. It seems like the majors are decimating the regional pilot workforce with no signs of stopping anytime soon. Could we see regionals shrink considerably in the next couple years?

The future of regionals…
 

Toast...got it. Get out or get cooked

sigh

filler

Old worn out 50's burning $100+ oil? That's not sustainable, so I guess it depends on how long this drags out for.

I think the next 2-3ish years will be very telling of the regional industry. In my opinion, regionals will have to start offering current LCC compensation package to stay relevant or risk folding. The legacy partners will be slow to allow such compensation packages, but it’s still slightly cheaper than bringing everyone in-house. Time will tell.

The coming recession/depression is about to buy the regionals a few more years.

Inflation
Oil price
Russia
FED interest rate policy mismanagement

The hit on American’s discretionary income is about to bring all of the fun to a screeching halt.

This is the first post I’ve read that I agree with

How will those things buy time for inefficient regional fleets? Wouldn’t those issues hit smaller markets equally hard, lower demand, and make the decision to park planes already facing retirement that much easier? If a major recession and high fuel prices are on the way, wouldn’t the legacy carriers use their near term deliveries to focus on improving efficiency by replacing older jets, drop low yielding markets, and then use future deliveries for growth when demand returns? Economic forces will definitely affect hiring at all levels, but expensive fuel and lowered passenger demand due to less discretionary income won’t do the regionals any favors. It won’t be good for anyone.

We could have made the same argument for COVID and yet it worked out the opposite. Also, covid exacerbated the population shift and now airlines can't stop service from the traditional smaller markets.

UAL alone has dropped around 20 small markets. If the legacy, LCC’s, and freight companies significantly reduce hiring, that would buy time more than anything. Fuel prices went way down during the pandemic also. Prior to the pandemic air travel was predicted to significantly grow. Our ATC system is pretty saturated and the only way to handle that growth is with larger aircraft. Considering that the regionals have all of the 70/76 seat aircraft that they are allowed, coupled with the age, unpopularity, and inefficiency of the 50 seaters, that growth will occur at the legacy level. Unless a viable 50 seat aircraft hits the market quickly, the regional fleets are going to significantly shrink over the next few years. Higher fuel prices will accelerate that. A full blown recession could slow everything down as well.

It’ll be interesting to see if the regional airlines will have enough foresight to continue hiring through the next downturn to prevent being so short staffed when hiring picks up again


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If you were debating between a career in this industry or an IT career, you future looks much brighter hanging with the Big Bang types.

This is all true. But the thing is no one really knows how things will play out post pandemic or how the Russia situation will end. Perfect storm, absolutely it’s going to be a case of music stopping and furloughs at the majors sooner than anyone would imagine.

But as the COVID situation has proven, the opposite can and will happen of what every “expert” prediction may be. Time shall tell, and it appears we don’t have long to wait to find out.

Where do you have evidence of that? I’ve heard of plenty of airports having gate space and operational limitations but never “ATC saturation” being a thing.

Poorly worded. I meant airport service volume and ATC at the terminal level. EWR for example is a zoo on a good day. Hub ATC can only handle so many blips per hour but the airspace in between still has some room. Adding flights isn’t an option at many hubs due to congestion, so the next option is to increase the size of the aircraft currently operating the routes.

ATC satiation mainly a northeast/SFO problem. That only way for growth To happen at these airports are larger aircraft.

We need to pay our teachers more.

Why reward poor performance?

Sorry for typos, spelling errors, and failed use of capital letters. Happens when I am just typing on the phone as I go. Lol

I bet some airline hedge fuel a few months ago its just a matter of how much they did hedge could save a few airlines for a while.

The 50 seaters will get parked fast. Not all of them, but many will go. The ones remaining will be on government subsidized routes. The 65-76 seaters will be getting run ragged through tough times though. Cheap staffing at the regionals and slowed hiring at majors will benefit regionals during this time. Majors will likely park the older portions of their narrowbody fleets (UA's airbus fleet, 752 fleet, etc)

50 seaters will return full force in the form of ultra efficient turboprops like the new Embraer that launches this decade. The 145/200 will last until then. And as major hiring comes screeching to a halt here in the next few months with WW3 oil prices, the regionals will be able to catch up on staffing. A lot of those small markets were only dropped for staffing issues, and they will return as staffing at the regionals catches up.

There's a finite amount of airplanes that DEN can accept in one hour, and usually they go into flow control delay programs long before that because approach can't even handle what they're supposed to be able to handle on paper. Several other airports have the same problem, however EWR and the rest of NYC doesn't have much of an ATC problem but more of a "lack of runways" problem.

WW3 oil prices is a little over dramatic. Prices will increase, but the world won’t stop spinning.

From everything that I’ve read about the Embraer turboprop is that they’re talking about something in the 70-90 seat capacity range and that will be problematic in the US market due to scope. Also, they are only considering the possibility of a 50 seat version at this point. I don’t see airlines parking 175’s to buy a turboprop. I also don’t see the 145/200’s lasting that long, especially if fuel prices stay up for longer than we would like.

Fuel prices being the different variable is a great point, however, do you remember what was flying in the year of 2020? 76 seaters and cargo. A recession of major magnitude will change it all... I don't think we will see anymore bailouts because of 200 brl oil. Not sure if I am backing my own point up here but just seem the green new deal might happen without a vote being cast.

If oil prices and inflation stay high, everyone will be impacted. People will have less discretionary income and ticket prices will have to match the rising cost of fuel. One thing to consider is that oil will have to hit $170/barrel to equal 2008 prices adjusted for inflation. A recession is a very real possibility given the situation in Ukraine coupled with our domestic fiscal policies. A recession is still a minor blip compared to the global freak out over covid. Demand won’t go down 85% like we saw in 2020, however 10-15% would be possible. If fuel and inflation stay high for a long period I’d expect the 70/76 seaters to fly very hard, the 50 seaters retired sooner than planned, and markets that can’t support 70 seat or larger aircraft dropped. On the legacy side I’d expect deliveries to continue and focus near term on replacing older, less efficient aircraft. When demand recovers, future deliveries could then be used for growth. United for example has around 500 aircraft on order, with approximately 200 of them being growth. The current plan is for the near term deliveries to be all growth, while future deliveries focus on replacing older aircraft. In a major recession they would probably continue to take delivery and focus on improving efficiency. The Max 9 for instance has a couple more seats than the 757-200, yet burns about 2,000 lbs/hour less fuel. The max and neo both have a fuel burn that is approximately 16% less than their standard versions. If fuel prices do stay high, I’d think that increasing efficiency would be the name of the game. As the thread title indicates, this is all just speculation.

I thought WWIII was going to happen if Trump got reelected???

It's a real shame. All of this could have been avoided had people voted correctly. The average American voter deserves what they've got coming. No remorse. Get the popcorn ready, I'm enjoying the show.

Without getting political about who’s fault things are, it certainly seems like things are on a knife edge right now. If it does get as bad as some are saying it is about to, well, let’s just say I hope you aren’t on the bottom end of a seniority list where ever you may be. The music could stop violently fast for regional and major hiring.

$300 crude barrel + huge drop in demand for flying + high cost to fly a jet once fuel hedging is dried up + panic by airlines = furlough town my friends.

I’ve seen some market analysts suggest 300 a barrel is on the low side of where things could go. Add a war that the US and UK are forced into via NATO, which again, many are saying is a case of “when” and on “if” …and we got trouble in paradise folks.

Hopefully this entire thing is solved with diplomacy but holy smokes, this has the potential to be a killer for aviation in the near term if things don’t become stable soon

Barring a large drop in flying for whatever cause the regionals are going to shrink....a lot. Senior F/O's are getting interviews with major airlines and they're already short Captains at most regionals. Some numbers I've seen are 9000 pilots being hired by B737/A320 and larger operators in the next 12-18 months. The vast majority of those will come from regional airlines. They are roughly 20,000 Regional Pilots right now. So nearly half the pilots gone in the next 12-18 months.

I think the only way they're going to fix this is putting Regional Pilots on mainline seniority lists so when they flow they'll get paid as though they'd been at mainline all that time. Or something similar, perhaps even merging into mainline which I think is least likely. It'll give the mainline unions some major negotiating power.

Man I really hope this stuff gets figured out soon. After Covid throwing us all for a disastrous loop these past few years I was really looking forward to a bit of stability, even just for a few months!! It’s too soon for another downturn. It’s starting to feel like 2008 again.

the thing is this all feels so self inflicted, COVID turned out to not be the Black Plague and a massive overreaction, and we shut down our oil producing capacity. We were energy independent 2 years ago.

if NATO goes to war with Russia then nothing will matter anymore because the world will be a nuclear wasteland

How come this guy keeps getting more RIGHT by the minute even though this was made a year ago???

https://www.youtube.com/watch?v=sB_T54wg9KI

I mean we never really had the covid downturn we should have had, which is why things are falling apart now. We simply kicked the can down the road with stimulus until it fell in the WW3 pothole.

Oops!
 

Hahahaha. This idea that Biden walked in and we are suddenly not energy independent is absurd. The United States is the largest oil producer in the world. We are on track to produce more oil than we ever have in history next year. There are literally thousands of unused oil drilling permits. Don’t let these oil companies’ propaganda confuse you.

https://www.bloomberg.com/news/artic...uction-in-2023

The oil industry is complicated. I have two family members who work in it. When oil prices fell, they laid off tens of thousands of workers. Dozens of companies went bankrupt. Fracking fields stopped production (a lot of it under Trump!). It’s all about that break even price. The United States is capable of producing nearly 88% of our daily oil consumption right now. But we let the oil companies sell away our oil. If we required them to keep it here, yes, we would be basically energy independent.

you realize Trump brokered the 2 year OPEC deal that limited production for 2 years right? It was also Trump who is on record for calling Putin a “genius” with regards to Ukraine. What world are you living in? You’re spare parts bud.

Not your world!

https://www.foxnews.com/media/the-worst-russia-ukraine-media-takes-make-war-about-race-climate-change-trump-and-more

show me on the doll where the lying orange man fondled you…

Not that I disagree with you but a huge amount of blame for this falls on the European NATO countries. They've spent two decades now eroding their armed forces by cutting their budgets thinking in this day and age they weren't really that important or that the U.S. would pick up the slack for them. What they foolishly didn't realize is that a strong military is just another strong diplomatic arm of the government even if you never have to use them.

Trump called them out on it and before that Defense Secretary Gates who served under both Bush and Obama did the same thing back in the late 00s and early 10s. What you are seeing in the Ukraine is the result of those years of neglect.

Russia has the 11th biggest economy and is the 9th largest country by population but is arguably the 3rd most powerful nation in the world solely because of their military strength.

Yes. But RU's military power really comes down to strategic nukes, and by that metric they are #2 by a wide margin.