Can regionals survive w/o mainline contract
 

If ASA or Comair just decided to not fly for Delta anymore or say Delta did not want them to fly flights for them, would the regional carrier be able to survive as a stand alone carrier. I know way back when regional airlines were literally regional. Would that same concept work today?

Ask the guys furloughed from Express Jet and former Independence Air employees.

Depends on your definition of "regional".

Midwest and Frontier could be considered regional...

Ayep no way...worth contemplating for amusement only!

all depend on the plan of action.SW started as a regional right? Express jet had a well plan but oil prices out of control brougth them down.Right idea at the wrong time.

Yep...XJet did it right; a casualty of poor circumstances only. Then again, Aquafresh was for only a relative handful of aircraft, not the entire fleet.

Another downfall of both IDE and XJT was that their contract partners (UA and CAL, for instance) didn't take kindly to the new competition. UA killed Indy with price matching out of IAD and CAL most likely put a lot of pressure on XJT with a new contract for their CoEx flying. Chances are, any regional trying to start up even remotely competitive businesses will face the wrath of the very companies bankrolling the effort.

There will always be a market for 50, 70, 90 seater aircraft, there are too many variables to consider though, such as fuel price, competition, market saturation, marketing, code share agreements, you get the picture.

In my humble opinion, had it not been for the price of fuel our operation could have succeeded as we were tapping thin-under-served markets, with high yields.

So the short answer is maybe, but it's risky.

Yes, they did it right. They carefully selected markets which could be served with point-to-point RJ's but were too small to attract the interest of the Canyon-Blue Death Star.

But even so, their market niche was limited...attempts to expand outside of that would require narrow-bodies, and they would have to enter the brutal domestic cage-fight. To make matters worse, they were still employed by CAL, so they were further limited in that they had to avoid direct competition with CAL (or get fired).

The real difficulty for a traditional regional seeking to make the transition from regional contractor to real airline is that as they grow their branded flying they will eventually compete with their major partner, and get fired. The trick is to have enough money when you get fired to continue operations and grow into a self-sustaining operation without your regional feed income.

Startup airlines historically have about a 1% chance of survival :eek:

Can the majors survive without the "regionals"?

No, but if they don't like the ones they have, they can always dump them and create new ones...

- Used RJ's cheap from the desert.

- Multi-DUI street captains and 300-hour FO's who are willing to work for peanuts and are afraid to stand up to abuse.

- Everybody on year one longevity.

- Company-defined payscale, workrules, and employee policies.

- No union to start with.

What's not to love? ;)

Sure they could. The mainline pilots do ALL the flying for the airline. The reason that mainline companies outsource it to low-pay pilots is, well, because they're CHEAPER. And not just the pilots . . all employee groups at the commuter.

Commuter pilots complain about their compensation and the fact that there's no road anymore to a decent aviation career.

If you show up for work, that's what you're worth.

Southwest seems to do OK.

Google up Flyi.

They don't want it. They have outsourced the regional flying to the RJ operators and Southwest.

The pilots who gave it up didn't want it. The problem is, they have all retired, and forgot to ask the current pilots what we wanted, which was NOT how it is now.

Very good point. Important to note here that Southwest does not depend on the hub-and-spoke business model. The relationship between most of the majors and regionals is one of co-dependency.

Can mainline survive with out the regionals....yes...and no...

YES .... if they either create more regionals ... or if they fly it all in house...

NO... they can not survive with out the feed from the cities now served by their regional partners in some form or fashion.

SWA does not use a traditional hub and spoke... but they do have hubs... and more and more of their flying is hub style flying.

No they can't. It's all about cost. The seat mile costs are too high for an all regional fleet. That before we talk about start up costs with call centers, computer reservation systems and other expenses to get going.

Delta continues to give up scope.

It depends, but the odds are against it. Independence Air made the mistake of attemting to compete against United with an uncompetitive aircraft. For a regional-sized airline to survive, they'd have to find a niche market where the only other competition is like-sized aircraft or none at all.

Can a mainline airline survive global competition with a codeshare alliance? I think the answer is the same for similar reasons. A mutually supporting network of aircraft and routes allows an airline group to compete against other airline groups and are superior to stand alone airline systems. Even mighty Southwest can't compete in the international travel market from the USA to Europe or Asia. Eventually they might. If they do, it will be through codeshares.

I think majors can survive without the regionals, case in point SWA, but it would be extremely difficult for regionals to survive without the majors. If regionals can have the right combination of aircraft type and large amounts of capital to start out with like JetBlue, it might be possible to survive.

What a regional would need to succeed as a stand alone carrier:

Efficient Aircraft-
Short segments have to be flown on turboprops, unless demand dictates a large RJ. You would need jets at CR9/E175 size or greater. 70 seats, 50 seat, 35 seats on a jet just won't pay the bills. Not to mention, these smaller RJ's have enough limitations to make for a level of customer service that a new airline could not tolerate. As for props, the bigger the better. I think an ideal regional stand alone fleet would be made of Dash 8 300's and E 175/190 aircraft. Both types are roomy for their "genre", and very capable.

Point to Point route structure-
Skip the hubs and fly people where they want to go. You don't need every passenger, but pick who you want and make them happy. If your product is good enough, people will drive to your point of departure. Also, hubs lead to so many missed bags, missed connections, and "delays beyond our control". These are all detrimental to developing a customer base.

Large market internet sales and advertising-
You need to start out on expedia, et al. if no one can find you, you won't sell tickets.

Appropriate fleet size-
You can't start out with 80 airplanes on day one. Add planes as you add service. Independence started out way too big. You need to to fill all those seats...


The biggest downside to starting up is that no one knows who you are. People won't save $5 a ticket by booking on an unknown airline, unless you are giving them exactly what they want.

By reading the above criteria (props, jets over 86 seats, point to point route structure, focused market share), you end up seeing the model of most US domestic airlines in the 70's and 80's. This worked. Everything went to pot when the jets got smaller and the props went away. The RJ was a noble appeal to the customer, saying here is a jet to replace those noisy props you don't like. But, the RJ wiped out BOTH smaller mainline aircraft AND newer, more efficient Prop regional aircraft. Imagine fleets of Q400's and Saab 2000's and ATR 72's kicking it through the northeast and deep south, flying faster at the lower altitudes, out of the way of the faster jets. Thanks Delta.

the CEO of Cape Air would be to differ with everything you just said. They are a legitimate 121 regional airline doing VERY WELL on their own and not falling under any of your criteria.

Regional airlines are subsidized by the majors through fee-for-departure schemes where they are guaranteed a profit. If they had to charge a real ticket price to pay their own bills, they'd implode.

again, i point to Cape Air

Cape Air is a very small niche outfit operating on a few non-competitive routes. It's irrelevant to compare a C402 prop outfit to a regional jet carrier. In fact it's really incorrect to call some outfits like American Eagle "Regionals." They are major airlines in their own rights and with their low-pay compensation to employees, competing, in many ways, directly with their mainlines.

The fact is that the 50 seat jet has never been economically viable without being subsidized by a mainline carrier. If fuel spikes again, they're really scrap aluminum then. Now what the execs are doing is to continue to "redefine" what a "regional" jet is, and specifically want to condition pilots to believe that a 76-100 seat airplane flying halfway across the U.S. is a "regional" jet. Of course that is a lie, but such is the ethics of business executives. It's an exercise in perception management and desensitization that some regional pilots are eager to buy. So in the end, mainlines are subsidizing their low-pay carriers, making them look profitable, and at the same time generating losses that make for an excuse to drive down mainline compensation towards low-pay carrier standards. It really is a brilliant strategy.

Nonsense. You can't dismiss Cape Air on the basis of the equipment they fly. This argument was never about that.

Southwest has succeeded as a stand-alone major airline. Cape Air has succeeded as a stand-alone regional airline. The conclusion is that either can succeed without the other.

Most of the majors have put themselves in a position to depend on the regionals, and vice-versa. And this co-dependency has driven a stake between the two. But to say there is no other way, well that it clearly far from reality.

It is a codependence, but it is a one-way one yet.

The difference is majors can use regional carriers against one other to lower costs. The regionals do not have the leverage yet to do the same to the majors.

Horizon actually does a bunch of stuff on their own. However, they do have about 30% of their flying purchased by Alaska, so they are partially subsidized. They also don't make very much a profit on their own, even in good years.

The point with Cape Air is... some regionals don't require that leverage. Allegiant as well. Yes, a start-up. But perhaps also a trend. We will see.

But interesting to note... Southwest and Cape Air are both making money. And they are both stand-alone airlines. Hmmm....

Actually, I-Air didn't "attempt to compete" with UAL per se, it was more incidental to what happened. Picking up and moving to an entire different airport wasn't feasible. Add to that, ACA/I-Air held the leases on those gates for something like 20 more years and a decent lease rate.

Part of the market research that went into it discovered that people would GLADLY drive all the way to BWI to take advantage of SW's low fares. As opposed to paying higher fares out of IAD where AA, UAL, and USAir dominate. The NoVa area is huge, and that's a large market of passengers.

The business plan was to capture the flier who drove all the way to BWI and draw them back to IAD with a low cost option. As has been mentioned, when carriers in bankruptcy match fares, it's hard to compete. Add to that the same thing that helped do XJT/Branded operations in, fuel had just about doubled from start up to shut down.

Southwest hasn't made money lately.

Think about what you are saying.

Allegiant and Cape Air are not your typical airline models. Regionals are used to move traffic to a hub then to their connection. Both Allegiant and Cape Air are designed to move passengers to a specific destination and they maximize their revenue through diversifiying the O side of the equation and limiting the D side (whereas most airlines try to maximize both). Allegiant also gains 25% of it's revenue through incidentals, for a time a unique position, that is now trying to be emulated by all with their fees. Allegiant's primary competitor is the regional airline and AAA. Their direct flights are competing against two-leg flights or a 90min drive to the nearest hub of a major.

Any airline, regional or otherwise, can survive on it's own provided it is well managed and marketed. Regionals biggest problem is their lack of marketing and infrastructure as they rely on their major partners to do all the lifting here. This two items require A LOT of startup capital to invest and is a major hurdle to overcome.

Oh my. Someone busting out the old "Cape Air isn't a real airline because they don't fly jets" routine. :D

Let me set you straight: I've flown a jet at a 121 regional, and I currently fly for Cape Air. It's the same job in smaller airplanes. We have 56 C402s and 2 ATR-42s, carried over 650,000 passengers in 2007, have more operations in/out of Boston Logan than any other carrier on a daily basis, and with the exception of the ATRs, do it with "Cape Air" plastered in big letters on the tail.

If you want to get into the "real airline" debate, we win. Not to put down jet regionals in any way (I'm still looking forward to taking recall to XJT if that ever happens), but RJ operators provide feed for a mainline operator. We provide our own transportation under our own name on our own ticket stock. Can Eagle say the same?

I couldn't agree more.

Cape Air has done what should be done: match the aircraft to the market.

Night...you hit it on the head. Cape Air is the poster child for filling a niche market and not over-expanding into something they aren't.

Five to Seven flights a day from Dulles to Lansing, Michigan and just about every airport in upstate NY with seven pax per leg all paying $39 intoductory fares didn't do much for Indy Air either.

I was worried I'd have to pass the hat for de-ice fluid.


Oh, and maybe the fact that a great deal of the CRJ's were not RVSM certified had an affect on the fuel costs as well.