Could regionals grow while majors shrink
#22
Line Holder
Joined APC: Jun 2006
Position: A320 R
Posts: 37
I will jump into the oven here!!
To answer your question-Yes.They can
Should they is tricky.
While a regional may grow and get bigger equipment,thus allowing a legacy to shrink,it opens the door to players the legacy carrier cannot control.
The VX and JB and Spirits and Southwests (or someone newer)will jump on a vacuum from the legacy carriers.
When these LCCs go the extra mile and develop codeshare agreements with foreign airlines then the nicely planned dreams of senior legacy airline mgmt gets shot down fast.
The regionals will always be in competition to the bottom as they try to get contracts with the legacy carriers.As the pilot population at these carriers gets senior and costs go up,they have a harder time cutting costs.
So can regional lift grow at the expense of mainline flying? Of course yes.
Is it a good plan?--Looks good on paper,but reality may be different.
Do I think legacy carriers are going to try this for a a bit more? yes I do.
Right now we have not felt the full effects of legacy consolidation.
NWA-DAL
UAL-CAL
US-AA is coming
then the mergers between the LCCs will start. I can see a JB VX merge which will make some really profound changes in the industry.
İn the end we will have 3 legacy-2 large LCCs, and regionals used to move bodies.
The ideas of these mergers-synergy etc-all hide the fundamental goal of controlling capacity and controlling ticket price/yield.Too much regional lift negates the yield goal. Supply and demand.
Just my 02 ...and FYI,I am usually wrong.Just ask my wife.
To answer your question-Yes.They can
Should they is tricky.
While a regional may grow and get bigger equipment,thus allowing a legacy to shrink,it opens the door to players the legacy carrier cannot control.
The VX and JB and Spirits and Southwests (or someone newer)will jump on a vacuum from the legacy carriers.
When these LCCs go the extra mile and develop codeshare agreements with foreign airlines then the nicely planned dreams of senior legacy airline mgmt gets shot down fast.
The regionals will always be in competition to the bottom as they try to get contracts with the legacy carriers.As the pilot population at these carriers gets senior and costs go up,they have a harder time cutting costs.
So can regional lift grow at the expense of mainline flying? Of course yes.
Is it a good plan?--Looks good on paper,but reality may be different.
Do I think legacy carriers are going to try this for a a bit more? yes I do.
Right now we have not felt the full effects of legacy consolidation.
NWA-DAL
UAL-CAL
US-AA is coming
then the mergers between the LCCs will start. I can see a JB VX merge which will make some really profound changes in the industry.
İn the end we will have 3 legacy-2 large LCCs, and regionals used to move bodies.
The ideas of these mergers-synergy etc-all hide the fundamental goal of controlling capacity and controlling ticket price/yield.Too much regional lift negates the yield goal. Supply and demand.
Just my 02 ...and FYI,I am usually wrong.Just ask my wife.
#23
Look at this little regional airplane....Where is this company now?
Photos: Huff-Daland D-49 Aircraft Pictures | Airliners.net
Here they are with a bigger plane.....
http://www.airliners.net/photo/Huff-...636b0c1cc523aa
Photos: Huff-Daland D-49 Aircraft Pictures | Airliners.net
Here they are with a bigger plane.....
http://www.airliners.net/photo/Huff-...636b0c1cc523aa
#26
Moderator
Joined APC: Oct 2006
Position: B757/767
Posts: 13,088
Look at this little regional airplane....Where is this company now?
Photos: Huff-Daland D-49 Aircraft Pictures | Airliners.net
Here they are with a bigger plane.....
Photos: Huff-Daland D-49 Aircraft Pictures | Airliners.net
Photos: Huff-Daland D-49 Aircraft Pictures | Airliners.net
Here they are with a bigger plane.....
Photos: Huff-Daland D-49 Aircraft Pictures | Airliners.net
You might want to click on your own links.
#27
Ooops....Meant this one...
Photos: Douglas DC-3-G202A Aircraft Pictures | Airliners.net
Us damn regional pilots can't do anything right.....
Photos: Douglas DC-3-G202A Aircraft Pictures | Airliners.net
Us damn regional pilots can't do anything right.....
#28
Moderator
Joined APC: Oct 2006
Position: B757/767
Posts: 13,088
How long did it take for NWA to go BK? Delta? United? American? I'd say it could be a very long time before it happens again. It took a very long time to happen initially. You're now looking at a lot of Legacy airlines with little to no pension debt(which was a huge amount of BK debt).
#29
Look at this regional airlines route map.....
Google Image Result for http://blog.delta.com/wp-content/uploads/1954-dl-cs-map.jpg
Google Image Result for http://blog.delta.com/wp-content/uploads/1954-dl-cs-map.jpg
#30
Moderator
Joined APC: Oct 2006
Position: B757/767
Posts: 13,088
Everyone keeps saying that the regionals are at death's door. Esspecially with the looming retirements, that the regionals will be drained of pilots to staff the majors, and the negotiating of contracts will put the flying back with the big boys.
But what if the opposite happens. I just read that AA's new contract allows for regional partners to fly bigger equipment. What if as the Majors become starved for pilots (high paid pilots), instead of moving heaven and earth to scrape them from every nook and cranny they just downsize and farm out more and more flying to larger regional aircraft, and lower paid crews?
I'm not saying this is good, obviously this is a doomsday scenario for our career! But it would make more sense economically if you're a profit driven corporation (not meant to sound derogatory, just realistic) Doesn't the trend in business these days seem to favor outsourcing and not the opposite?
But what if the opposite happens. I just read that AA's new contract allows for regional partners to fly bigger equipment. What if as the Majors become starved for pilots (high paid pilots), instead of moving heaven and earth to scrape them from every nook and cranny they just downsize and farm out more and more flying to larger regional aircraft, and lower paid crews?
I'm not saying this is good, obviously this is a doomsday scenario for our career! But it would make more sense economically if you're a profit driven corporation (not meant to sound derogatory, just realistic) Doesn't the trend in business these days seem to favor outsourcing and not the opposite?
What I think will happen is the majors will have plenty of applicants, & the regionals will have problems staffing their planes. Between attrition at the majors level, & the new FTDT regs and min time requirements for a 121 job, the regionals will be in trouble. It's already resulting in massive drops in enrollment in aviation programs, as well as applicants being turned away from regional FO jobs because they won't meet the 1500 hr rule in time.
So in short, while your scenario is possible, I don't think it's likely for the reasons I listed.
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