Why It Is What It Is
 

I posted this as a response on another thread and decided to make this a thread of its own also. Not really interested in a debate, just wanted to express my own observation. Enjoy! :)

An Observation From The Outside

Before I say what I have to say, bear in mind that my perspective is from the outside looking in with regards to the passenger airline side. I fly freight and am part of an in-house independent union, and thus my observations are just that - observations. With that being said, here is my $0.02.

"We need to take back the industry to what it once was."
I see this a lot on the message board. The only way to take the industry back to what it once was is to turn it back into what it used to be. Mainline carriers flying the bulk of the routes with regionals (commuters) serving to feed mainline passengers to and from cities too small for large aircraft.

"We need higher wages and better work rules at the regionals."
Not going to happen for the simple fact that you cannot pound a square peg into a round hole. The regionals are not designed nor are they able to produce revenue streams large enough to pay crews large salaries comparable to what we have seen in years past.

With rare exception, the "commuters" were not designed to be long-term career destinations for most pilots. Get in, get the experience, and move on was the mantra. Everybody knew it going in and played the game hoping for a spot at a major one day. It was nothing more than paying dues.

The commuters morphed into regionals with the advent of the regional jet. Blame who you wish, but the fact is that regional jets allowed smaller, commuter airlines to grow and to capture larger route structures that used to be flown by the smallest mainline types of aircraft. In some cases, two or more regional jets are flying routes that used to be served by one mainline jet.

A lot of people reflect on the glory days of the airline industry from years past. While those were good days, let us not forget how the industry was structured. Most tickets purchased on a mainline carrier saw the passenger boarding a 727 or DC-9 operated by that mainline carrier. The only exception to the rule is if you wanted to fly from a major hub to an outlying small town, then you would probably have flown on a Beech 99 or Metroliner. A lot of those same routes back then that were flown by large airliners (727's, 737's, DC-9's) are now flown by smaller, regional jets.

"We need a national seniority list."
While the intentions are admirable, a national seniority list is very unrealistic and would create more problems than it would solve. First, bigger is not always better. One union representing tens of thousands of pilots? Too many interests among the various groups and one large organization to represent all of them. It would never work.

And where is the proof that this would increase wages and QOL issues? If anything, it would cause managers to work harder to find ways of doing more with less.

"But if you lose your job, you have to start over at the bottom."
Welcome to the real world that we call life. I know it isn't fair, but where is it written that it has to be fair? This is part of the game and we all know and accept that fact going into it. Instead of demanding someone "owe you" a seniority number at another carrier, work instead to have a plan B in case you find yourself in that situation.

"We need to go back to regulating the industry."
When is the last time more government solved a problem? Re-regulating the industry will not equate to more pay, more jobs and better work rules. It will equate to the federal government having the final say as to who flies where, how often, with which type of aircraft, and for how much.

I recently read an article in which the author was looking for an airline job during the 1960's, the era prior to deregulation. One major carrier was hiring, but was also furloughing. It was not uncommon to get hired by a major and then furloughed during the slower times of the year for several years. In other words, you could consider yourself a seasonal employee for several years until your seniority increased.

And if you think pay, especially first year pay was better prior to deregulation, think again. There is more than one story out there of pilots who were hired and had to live on borrowed money to make it through the first one or two years of low pay. And then most were furloughed for a time after that.

"Wages are too low."
For every one person I see complaining about the pay, I can easily find five who say they "love to fly because it beats working in cubicle." And most of the time it does beat working in a cubicle, but if people are willing to enter a hobby instead of a career then wages are going to remain where they are.

More observations:

Let us also reflect on what the culture was like 20 years ago and what it is like today.

Brand Loyalty
People used to fly a particular airline because they were loyal to the brand and the service that carrier provided. It was not uncommon for people to pay more to fly on one carrier versus another.

Business Models
Fax machines and color copiers used to be the big advances in the office. Prior to emails and teleconferencing, face-to-face business meetings were more common than not. The airlines could and would charge more for the last minute business flyer, and both accepted that fact as a cost of doing business. Just write it off as a business expense.

Nowadays, everybody is very cost sensitive and not as brand loyal as in years past. Add into the equation the internet which will show you the cheapest tickets to the penny, and the industry is now operating in a very competitive environment in which expenses are high and revenues are barely enough.

Other questions are. How profitable is an RJ on point to point? Is it primarily a hub feed aircraft ? There was a regional that broke away from UAL and tried to go it on its own while getting larger aircraft (Airbus?) and couldn't transition fast enough and went under in a very short period.

Given the cost of aircraft, the price of fuel, and the cost of employees are we headed back to a period of time that not everyone and his brother flew anytime they wanted to go somewhere? In the old days flying was not for the everyday guy.

Will the real first class passengers return from the fractionals to the mainline carriers, coach used to pay for the airplane and the profit was in first class, ( see carriers like Cathy Pacific)

Exactly, as a kid we almost always drove on vacation. People today want a round trip across the country airfair that gets them there in 4 hours and costs less than they would pay in gas, much less the savings on motels and food and lower than what it would cost them on one way. It amazes me that people expect that they should be able to fly from JFK to MCO for 100 bucks round trip. That is why everything started spiraling down, companys cost cut themselves in a fare war to increase custmers to where they cant stay in business and meet the demands on pricing, so that money has to come from elsewhere, and boom the vicious cycle of farming jobs to the lowest bidder, ie codeshare began. Most all of the regional pilots out here today were not even around when all this began, so until we stop trying to blame the "Regional Pilot" for all the ills in the industry, we need to start by getting fares back to where companys can compete and spend $ on training and pay a decent wage. I DO NOT like government oversight, but even I have to admit that when the gov set a fare regardless of carrier back in the day, aviation was a more classy way to travel. Im dating myself but my mother would have never let me on an airplane as a kid without being in sunday go to meeting clothes. There was much more respect from both ends to the middle in those days

You're in good company. I remember wearing my Sunday best as a kid when we flew once - and that was for a seat in coach.

Like you mentioned, most families drove for the family vacation. To be able to afford tickets for a family of four was considered a luxury.

The toilet has already been flushed. For what you are saying should happen, it would mean thousands of job losses as you consolidate and raise fares. Even if it were to happen, it would mean a setback of about a decade for pilots. We are just going to have to come to terms that free market economy and the airlines just do not mix unless there is heavy gov regulation. You can't make profits by selling a 2 dollar product for 5 cents.

We have already experienced thousands of job losses and from the looks of it , see the comair posts on percentage of flights reduced, the industry is going to see more layoffs.
Regulation and the CAB came into existance due to the behavior of the airline managements . The assumptions that the behavior patterns had changed seems to be in error, kind of like eliminating Glass Stengal(sic) on the financial markets.
The above does not indicate I am in favor of reregulation, responsible business behavior would be nice.
Freight seems to have come to terms with pricing the product/service for profitability.

Well yes. You don't have 20 Fedex and UPS carriers as well as about 20 Fedex and UPS Connection carriers like the airlines do.

This is true of most, but I can think of one regional that has their finger in every mainline pie and has managed to "sock away" enough cash to give 300 million to USAir and still have enough left over to purchase two other national airlines.

Could they turn a profit if they where a stand alone entity? Do they compensate well or do they compensate poorly? do the airlines that pay for there services pay based on what each flight could generate or do they pay cost plus?

I just said there is a regional that somehow manages to make piles of money when others are in the crapper.

But to try to answer your questions -
I doubt it. Slightly below average but hair gel is cheap. Cost Plus.

You should look at Ameriflight and the FEDEX and UPS small aircraft subcontractors, it is an issue for freight also. It would appear that freight just doesn't over pay for the feed or accepts the loss on the short segment or turns to ground movement.
The cost of building the distribution network is almost cost prohibitive for new entries.

So it would appear that if they didn't have another airlines management making poor business decisions they wouldn't be profitable and make piles of money.
Below average for a regional is pretty sad and one of the points of this discussion is compensation .

I have to respectfully disagree with that statement. Airlines can and do exist in the free market economy successfully without government regulation. The free market simply dictates who survives and how many carriers exist.

The industry of the present is just too big for the market it is trying to serve - i.e., overcapacity. The sad but harsh truth is that the industry must shrink in order to be profitable. It's a choice of many carriers operating just barely above cost, or fewer carriers that are strong and profitable.

I don't believe government regulation would make the matter any better. It would exist to subsidize carriers at the expense of the taxpayer. And with government intervention comes the inevitable game of political favorites. If the government is footing the bill, they are going to determine the who, what, where, and how often pieces of the pie. It is entirely plausible that many carriers would cease operating due to the fact the government may choose to subsidize certain carriers only.