USAir Regional Consolidation
 

From the May 28 CLT crew news:

(First, thanks to the guy asking these excellent questions)
Q: Why do we own two commuter airlines? We have two sets of administration, why don't you combine them into one?
Kirby: "We own two [psa & pdt], its an artifact of history. There's not big savings in combining just those two ... To be honest with you what we would like to do ultimately is consolidate more than just those two regionals"
Q: They have two seperate headquarters, all the extra administration, if you just saved $100 would it be worth it?
Kirby: "We'd have two seperate operations anyway ...There are savings, we've looked at it, but the savings are in the $2 million range, and its a lot of work and a lot of headache to get $2 million a year and to combine operating certificates and it just hasn't been the priority. There may be opportunities to roll those airlines together hypothetically with an ARW ... or Mesa comin out of bankruptcy. So to go through all the work, expense, and brain damage[:rolleyes:] of trying to consolidate just to get $2 million worth of savings hasn't been worth it yet and hasn't been a priority yet. "


My take: $2 Million a year is not worth the effort? Wow. How much do these guys get paid again? Senior mgmt says "Meh, we don't get paid enough to work that hard" ??? What a joke. It's the same excuse the rampers use for why they aren't out there to marshall us in. The same reason the gate agents don't promptly greet the express flights. The same reason my dispatcher sends me directly through a line of thunderstorms instead of around it. I think that corporate culture starts at the top, and this seems to be ours;

USAirways: "Not worth the effort"

I've been talking about this since 04 my friend. I think we will consolidate however, right now there are two contracts that are amendable. It would be silly to consolidate us and get a united front against them in negotiations. You see how it irks them so much when PDT and PSA are invited to each others negotiations. I think that they want to stall the PDT talks as much as possible until a deal is worked out with the PSA group. It will most likely be less than a new deal at PDT would be and they would still have all the neat little MGT cookies like hot reserve etc intact. Furthermore, it would make the 70 seat scope clause all but irrelevant and allow more effecient aircraft to be bought for PSA with a pilot group from PDT ready to fly them.Once PSA has a deal, look for the consolidation talks to move forward.

Management protecting managements jobs!

In another funny side note, seems at least somebody thinks Mesa will be around post-bankruptcy. Hints at a renewed Airways contract maybe?

That's part of it.

But something not worth $2million? C'mon!!??! Most companies will spend a million to save $10K! They keep them separate because they don't want a large (read strong and consolidated) pilot group in the regionals. A combined PSA and PDT would be much stronger and a much larger headache than two separate and smaller and weaker ones.

Remember - Divide and Conquer.

Exactly!! DAL has made a conscious decision to keep multiple DCI's in a state of flux to keep costs down with whipsaw and avoid another Comair-type strike.

So what did Kirby mean by consolidate? Does he mean USAirways buy AWAC and or MESA then consolidate? Or could he mean sell PDT/PSA to AWAC and have them consolidate and just contract us? You'd think they would want to keep at least one wholly owned because hopefully someday the regional pilots will be paid a respectable wage and mainline is going to need someone to force flying on when contracts won't take pay cuts. That's where a wholly owned is benifical.

Mesa and AWAC better go to the bottom if they were to merge with the wholly owneds. It would not go over well if, especially with Mesa guys getting seniority over PDT and PSA. I think a merge between PSA and PDT would be good but I do not think it should involve the contractors.

Whipsaw still works with owned vs. contracted. If they aren't willing to consolidate two carriers, why would they consolidate three or four? I think he was just throwing the ARW/Mesa ideas out there to create a secondary excuse for why he and his mgmt counterparts aren't 'creating synergies'. Fact is they are completely capable of saving the company "$2M/yr" (probably more than that) and they simply are not willing to do it. It would cause them 'brain damage'.

Awesome work ethic.

I don't think that management hopes we will ever be paid a respectable wage, after all we're just "part timers". You are correct that the biggest benefit of having wholly owned(s) is that there is no limit on capacity reductions in down times, which acts as a hedge against risk that the contract carriers can not provide. For that reason I don't think you would see Airways without a certain percentage of their regional lift in the wholly owned department. Doesn't mean they wouldnt sell PSA/PDT for a cash infusion and eventually start up a new one though.

Awesome thread guys. Question though. How do the PSA and PDT pilots feel about the two coming together? Just curious on the opinions cause I love the idea and have been saying it for years