Romulus

Everyone with any experience understands you are right. The problem is you are wrong in assuming mainline will win. They won't. Money controls airline operations and management holds the purse. We can mitigate, but we can't fully control. Even if pilots could have ESOP with members on the board, they'd still have to face up to the low costs carriers like Alligiant and JetBlue plus the growing ones like Republic and Skywest.

robthree

If mainline doesn't win, eventually there won't be any airline left. Republic went from being an airline no one ever heard of, couldn't pronounce, or even spell (Chautauqua), to a lift subcontractor for every single legacy carrier, and next its going to turn into an actual mainline competitor. With the money it was given by mainline managers. If Republic actually makes money as a stand alone carrier (and it certainly won't lose money based on labor costs) SkyWest will be next to go that route, buying whichever National brand is cheapest. Lift subcontracting won't be the cash cow it has been for the last decade - mainline managers probably wont agree to pay pay gas plus profit again. So being an independent is probably the way to go anyway.

Does it make sense for AMR to hire Delta to do flying for them? Obviously not. Ditto with Republic. You don't contract your jobs out to a competitor. And today's lift subcontractor is tomorrow's head-to-head competition.

Management may realize this too, and not care. Their lives and livelihoods are not dependent upon the long term success of the airline. Only the short term results matter to them. Honestly, management and speculators are on one side: trying to maximize this quarter's profits even at the expense of long term viability, with employees and long term investors on the the other, trying to ensure the enduring health of their company.

Beagle Pilot

While you make many great points, we shouldn't forget the humble beginnings of all the "Legacy" carriers like Delta* and USAirways**. We're not seeing anything really new here. Simply the evolution of a business such as happened with "The Phone Company" and other industries over the past two centuries. It's what capitalism is all about. You're not anti-capitalist, are you?

*Delta Airlines: Formed as Huff Daland Dusters, Incorporated, an aerial crop dusting operation, on May 30, 1924 in Macon, Georgia, the company moved to Monroe, Louisiana, in 1925 and began acting as a passenger airline in late 1929.

**US Airways traces its history to All American Aviation Company, a company founded by du Pont family brothers Richard C. du Pont, Alexis Felix du Pont, Jr. and CEO Steven Gardner. Hubbed in Pittsburgh, the airline served the Ohio River valley in 1939. In 1949, the company was renamed All American Airways as it switched from airmail to passenger service. The company was again renamed to Allegheny Airlines in 1953. USAIR = USair, Allegheny In Reality.

robthree

Beagle,

Don't forget Continental started in 1934 as Varney Speed lines, flying a single engine Vega all the way from Pueblo, Colorado to El Paso - with only three stops en-route.


The humble beginnings of Republic wasn't really my point, but the way they grew via parasitic relationships with other airlines. AMR has historically been quite predatory. Anyone remember Vanguard, Sun Jet, Western Pacific or Legend? It would be the height of irony if Republic were to thrive as a stand alone carrier having grown strong enough to become a viable independent off the profits they gleaned flying American's passengers.


On the other hand there are few Empire Builder CEOs left in aviation. No more Hughes', Trippe's, Six's, Kelleher's or even Crandall's. Most have become finance guys squeezing the last drop of value from their companies before running off into the sunset with the loot. BB may end up being an Empire builder if he doesn't get leveraged out the way Neeleman or Bethune were. You heard it here first: Republic will be the Next Great Airline.