From the Boyd Group
10-17-2015, 07:44 AM
#1
Gets Weekends Off
Thread Starter
Joined APC: Feb 2007
Posts: 2,483
From the Boyd Group
This was posted over on the Majors section, but it's got a lot more relevance here.
---
More Airline Consolidation On The Way
But It’s Not Brand Mergers
Let’s grab another third rail forecast.
Forecast Prediction: In the next 18 months, the airline industry will see more consolidation.
But it won’t be mergers.
It will be a reduction in major airlines outsourcing flying to small lift providers, a.k.a. “regional airlines.” Majors will be re-thinking their fleet plans and their route systems, and consolidating more flying back in-house from “regional airline” vendors.
There will be enormous fallout on airports, suppliers, and consumers. In some cases, more than what was seen with actual corporate airline mergers.
Tough Times Ahead For “Regional Airlines.” Despite the rosy appearances of future growth, the long-term horizon for small lift providers – typically still mislabeled as “regional airlines,” is getting increasingly cloudy.
We’re seeing a situation where outsourcing of flying will have a declining value to US major airlines. That decline may be a lot closer than a lot of folks might think.
The air transportation system evolves based on economic determinants. Unfortunately, most aviation and financial analysts tend to miss these trends, even though they are sometimes as obvious as a blemish on prom night. The fact is that most of these folks don’t want to look beyond consensus thinking. It’s too risky – they might be wrong.
Here’s a futurist indicator that’s been missed: Take note of the deafening silence from the Delta system in regard to additions & shifts in “regional” fleets.
AA and UA are actively bringing in more 76-seat units to lease to their outsourced lift providers. On the other side, there is a very strong indication that Delta is not following the fleet and operator strategies seen at AA and United. Delta may see the future more clearly than the competition.
Point: The Delta Air Lines 717 program may be the start of an industry trend toward reduction in dependence on outsourced flying. Now, the 717 isn’t anything vaguely related to what are commonly and inaccurately still described as “regional jets,” such as the CRJ and ERJ platforms – but neither is the Embraer 175, which American and United are buying and lease to their outsourced partners.
But that’s just the point: small capacity aircraft are on the way out.
With emerging and evolving airline economics, larger units of capacity are the future of air access across the USA. That erodes the cost-advantage of outsourcing the flying.
Consider some of the factors:
Cost per seat v revenue per seat. As BGI first predicted, the 50-seat jet is economic toast within major airline systems. Costs of operation are a factor, but more importantly – and missed in the miasma of consensus analyst thinking – they increasingly are less and less revenue-effective. What they can deliver to the major airline system is being eclipsed by expense factors beyond just flying the plane from A to B.
End of the incremental feed era. The cost of revenue-capture will be an increasing determinant factor in major airline route decisions, both in-house and with outsourced lift. The once-accurate belief that major airlines need the feed from smaller airports is now myth. In fact, in some cases such feed is just too costly to go after, and too costly to gum up scarce hub resources.
Major airlines today are at over 80% load factors. That means at a connecting hub, with limited gates, the feed from a small community has declining value, particularly when the cost of getting that feed entails spilling traffic from more lucrative destinations.
In regard to the spill-and-recapture issue, we’re actually seeing a distant variant of this dynamic at DFW International. Whatever traffic that’s being diverted to Dallas/Love due to Southwest expansion, it’s being immediately replaced by connecting passengers that were previously spilled due to high load factors at DFW.
In the same way, the “loss” of high-cost feed at a connecting hub from a small airport can easily be replaced with traffic that’s being choked off from another point on the route system.
Outsourced flying will be brought back in-house. Today, with over 50% of United and American flights operated by small lift providers, it’s no longer just a matter of “regional” flying. It’s simply use of smaller units of capacity where they make economic sense.
Despite the lightweights who still cling to the concept that “regional airlines” are just flying to small markets, the hard fact is that an increasing amount of this flying simply is major airlines outsourcing a lot of core-market flying to entities that can do it cheaper than in-house. Or more directly, could in the past do it cheaper.
The initial cost advantage of outsourcing to a “regional airline” is declining. So, the core reason for outsourcing is going away.
This is particularly true in light of the fact that a lot of the flying will be in mainline-cabin aircraft such as the E-175 – which isn’t a “regional jet” in configuration or mission application, and since many of them are actually owned by the major partner, they can be taken back.
This is not to imply that all current small lift providers are heading to the happy hunting ground. But the US airline industry by 2020 will be able to support probably less than half the number of outsourced aircraft they lease in today.
Forecast Conclusion: as economics of smaller airliners continue to deteriorate, there will be consolidation of now-outsourced flying back to the major carrier. That’s not going to be pleasant for some “regional airlines.”
Fallout For Airports: Let’s recap the realities: the value of smaller community feed is declining. Major airline systems have less need for it, particularly when the costs of flying small units of capacity are increasing. Fleets will gravitate along these dynamics.
So, for some smaller communities, it may mean loss of service at the local airport. Advice: don’t get scammed by proposals to do jive studies or surveys to “find more airlines.” Taking a hard realistic look at keeping the region connected to the global air transportation system will be far more valuable that chasing off to speed-date meetings to “lure more service” – which is like forming a lifeboat-selection committee on the Titanic. There aren’t any hidden airlines out there. So deal with it and start thinking of air access as regional, not local.
But for many airports, these changes will open new capacity, seats, and access. There are a lot of airports where the current lift is insufficient to meet demand, and a shift from 50-seat flights to 76, 100 and larger seats per flight will be an economic bonanza.
One thing is certain: the structure of the US airline industry as we know it today will be very different in five years. The brands will likely be the same, but the operators will be fewer. It’s consolidation that consumers won’t see in terms of brand-choice, but they will see it in the structure and reach of airline route systems.
-----
The US Airline Industry -2020. A Futurist Glance –
Get With The Trends, Or Get Left Behind
Since 1984, Boyd Group International has set itself apart as the leading source of aviation trend and data forecasts.
Our projections have sometimes been counter to at-the-time consensus, and that occasionally tended to draw fire from various corners of the industry – which is always welcome, it tends to bring discussion and further illumination to the subject. A couple examples:
In 1986, in one of our first industry White Papers, we correctly pointed out that code-sharing would be the end of the line for what was then a robustly-growing independent regional airline sector.
Now, that wasn’t real popular with some regional airline presidents who were at the time all enamored with the A-1 or C1R first-class, positive space pass cards they just got from their new major airline partner. But not to worry, most of them were gone in a couple of years. Some just went away, Some sold out to the major. Others, like Trans-Colorado and Rio, simply got kicked out the door, pass cards and all, when the major decided to replace them with another lift-provider.
A few very successfully transitioned into being contract lift providers. But code-sharing eliminated what was once an entire independent airline industry. BGI was the only consulting firm to forecast this outcome from the start.
In 1989, we alone published a White Paper that indicated the value of the then-planned “regional jet.” Although the “regional airlines,” which were the initial customer targets for the airplane, were by then gone, subsumed into major airline systems, our analyses went counter to then-ambient thinking that similar-size turboprops has much better economics.
True, but we noted that an RJ could cover twice the ground in a two-hour segment, opening a new hub-feed opportunities for major airlines. After a slow sales start, the rest is history.
Ten years later, when “everybody” was predicting near=]-unending demand for these machines, our fleet projections showed that the market demand for 50-seat jets was essentially fully met, and in fact the current orders and options far exceeded what the market could absorb. (The Delta system carriers at the time had something like 1,000 of these machines in service, on order, or on option. Never happened.)
Our OEM clients weren’t too excited at the time. But here we are, with he desert filling with run-out small jets.
The 20th International Aviation Forecast Summit – More Insight
At this year’s IAFS™ we again covered a wide range of issues and explored areas that no other event even gets near. We thought we might boil down a few of the issues we covered, and how they will manifest in the next few years.
US Air Transportation Route Structure: More – much more – regionalization of air service access into fewer commercially-served airports.
As we’ll point out, there are three main drivers of this trend: fleet changes, economics of hub feed, and highest and best use of connecting hub real estate.
Besides, despite voodoo-like studies and mystical programs to “lure” scheduled flights to small airports, there simply are no longer the airline economics in existence – or the airlines themselves – to make that happen. Gone.
That means a lot of smaller local airports will lose service in the next five years. It doesn’t mean the community will be cut off, just that consumers will be driving longer distances to access the system. Actually, in many regions, that’s already the case.
Airline Fleets: Write this down: by 2020, virtually all 50-seat jets, all current-generation turboprops in major airline service, and a goodly portion of today’s 70-seat jets will be retired. Gone. Not there. Vamoosed.
For communities that can’t support larger units of capacity, the writing is in the sky, and regional planning approaches are in order.
No, it cannot be reversed. That’s because , as we noted above, it will be the local consumer that’s part of the driving force. When there’s an airport 90 minutes away (more, even) with dozens of flight options, the two or three branded flights at the local airport are non-competitive. Frequency and alternative options in the event of off-schedule operations are foundational consumer requirements.
And if the local flights are with a non-major brand airline with a single-seat airplane, it’s just placebo service – almost nobody will use it, because it typically is non-connective, and non-attractive to consumers.
Again, the only way this dynamic can be ignored is in the fantasy that there are lots of airlines “out there” that can be brought into town, if only the right mystical data can be ginned up to convince the assumedly-nebbish airline planner to see the light. Long before 2020, this fantasy will be replaced with reality.
Yes, there is a global market for new-technology turboprops, but in any case they won’t be in production by 2020.
Airline Strategies. The focus will be on system revenues v cost. Period.
Passenger volume and market share will be secondary to maximizing return on investment. Feed-contribution at connecting hubs will be analyzed more closely. The revenue-value of every gate will be a metric – which means less focus on route-spokes to smaller airports. Point: airlines won’t need that incremental feed if it spills traffic at the hub from larger commercial points.
Alliances: The aggressive independent strategies of carriers such as Delta and Korean indicate that the expected consolidation into three global alliances isn’t in the cards anymore. That would also point to continued and robust global competition.
Domestically, however, as noted, air transportation will continue to be focused at fewer de facto regional points.
Perks: Consumer incentives have value only when an airline has incremental extra product it cannot sell otherwise. That was the case in the 1980s, but with 85%+ load factors and much-reduced competition, the need to give things away free has long since vaporized.
There is no longer a system-wide pool of non-sold seats at any airline. Based on fleet strategies forecast in the 2015 – 2024 Boyd Group International Fleet Trend & Demand Forecast, there are no areas of the globe that are in much danger of getting into an over-capacity situation. That means the need to offer perks will be focused on recruiting specific high-yield consumer segments.
There is no longer the need for frequent flyer programs to ensure brand-loyalty, particularly among any but the highest-yield traffic sectors. Therefore, it makes no sense for airlines to give seats away under FF programs, when they can sell them outright.
We’re seeing it today, with first class upgrades. Major carriers are offering these seats for sale to just about any passenger, for an up-charge. The platinum-diamond-iridium level frequent flyer can just board with their economy seat, because a free upgrade is not in the cards.
International Access. As we’ve predicted, the need for EU carriers to access large non-hubsite airports to feed their own hubs will be a major dynamic. The recent move by Delta to operate RDU-CDG is part of this dynamic – substantial traffic will be flowed to other SkyTeam partners at Paris.
Targets to watch: CVG, MEM, IND, MSY. The particular criteria are strong local traffic and strong road-hub access from industrial regions.
Distribution Channels, The recent move by Lufthansa to add an $18 surcharge on booking from independent OTAs (On-line travel agents) has been misunderstood. It’s not a fee, per se, but is a cost-recovery charge. (We covered this in a session with Larry Ryan of Lufthansa at the IAFS™, by the way.)
This is just the harbinger of a move toward direct airline retailing, as the OTA channel will increasingly be less cost-effective. Just as the need and utility for travel agencies as main retail outlets evaporated 20 years ago, the time may be coming for OTAs as well.
Final Point: the basics of air transportation economics are fundamentally changing. Airports and communities need to identify new trends and plan accordingly. In a future update, we’ll cover the non-airline opportunities that airports will see in the coming decade.
In the meantime, trying to reconstruct the past will successfully got one there.
---
More Airline Consolidation On The Way
But It’s Not Brand Mergers
Let’s grab another third rail forecast.
Forecast Prediction: In the next 18 months, the airline industry will see more consolidation.
But it won’t be mergers.
It will be a reduction in major airlines outsourcing flying to small lift providers, a.k.a. “regional airlines.” Majors will be re-thinking their fleet plans and their route systems, and consolidating more flying back in-house from “regional airline” vendors.
There will be enormous fallout on airports, suppliers, and consumers. In some cases, more than what was seen with actual corporate airline mergers.
Tough Times Ahead For “Regional Airlines.” Despite the rosy appearances of future growth, the long-term horizon for small lift providers – typically still mislabeled as “regional airlines,” is getting increasingly cloudy.
We’re seeing a situation where outsourcing of flying will have a declining value to US major airlines. That decline may be a lot closer than a lot of folks might think.
The air transportation system evolves based on economic determinants. Unfortunately, most aviation and financial analysts tend to miss these trends, even though they are sometimes as obvious as a blemish on prom night. The fact is that most of these folks don’t want to look beyond consensus thinking. It’s too risky – they might be wrong.
Here’s a futurist indicator that’s been missed: Take note of the deafening silence from the Delta system in regard to additions & shifts in “regional” fleets.
AA and UA are actively bringing in more 76-seat units to lease to their outsourced lift providers. On the other side, there is a very strong indication that Delta is not following the fleet and operator strategies seen at AA and United. Delta may see the future more clearly than the competition.
Point: The Delta Air Lines 717 program may be the start of an industry trend toward reduction in dependence on outsourced flying. Now, the 717 isn’t anything vaguely related to what are commonly and inaccurately still described as “regional jets,” such as the CRJ and ERJ platforms – but neither is the Embraer 175, which American and United are buying and lease to their outsourced partners.
But that’s just the point: small capacity aircraft are on the way out.
With emerging and evolving airline economics, larger units of capacity are the future of air access across the USA. That erodes the cost-advantage of outsourcing the flying.
Consider some of the factors:
Cost per seat v revenue per seat. As BGI first predicted, the 50-seat jet is economic toast within major airline systems. Costs of operation are a factor, but more importantly – and missed in the miasma of consensus analyst thinking – they increasingly are less and less revenue-effective. What they can deliver to the major airline system is being eclipsed by expense factors beyond just flying the plane from A to B.
End of the incremental feed era. The cost of revenue-capture will be an increasing determinant factor in major airline route decisions, both in-house and with outsourced lift. The once-accurate belief that major airlines need the feed from smaller airports is now myth. In fact, in some cases such feed is just too costly to go after, and too costly to gum up scarce hub resources.
Major airlines today are at over 80% load factors. That means at a connecting hub, with limited gates, the feed from a small community has declining value, particularly when the cost of getting that feed entails spilling traffic from more lucrative destinations.
In regard to the spill-and-recapture issue, we’re actually seeing a distant variant of this dynamic at DFW International. Whatever traffic that’s being diverted to Dallas/Love due to Southwest expansion, it’s being immediately replaced by connecting passengers that were previously spilled due to high load factors at DFW.
In the same way, the “loss” of high-cost feed at a connecting hub from a small airport can easily be replaced with traffic that’s being choked off from another point on the route system.
Outsourced flying will be brought back in-house. Today, with over 50% of United and American flights operated by small lift providers, it’s no longer just a matter of “regional” flying. It’s simply use of smaller units of capacity where they make economic sense.
Despite the lightweights who still cling to the concept that “regional airlines” are just flying to small markets, the hard fact is that an increasing amount of this flying simply is major airlines outsourcing a lot of core-market flying to entities that can do it cheaper than in-house. Or more directly, could in the past do it cheaper.
The initial cost advantage of outsourcing to a “regional airline” is declining. So, the core reason for outsourcing is going away.
This is particularly true in light of the fact that a lot of the flying will be in mainline-cabin aircraft such as the E-175 – which isn’t a “regional jet” in configuration or mission application, and since many of them are actually owned by the major partner, they can be taken back.
This is not to imply that all current small lift providers are heading to the happy hunting ground. But the US airline industry by 2020 will be able to support probably less than half the number of outsourced aircraft they lease in today.
Forecast Conclusion: as economics of smaller airliners continue to deteriorate, there will be consolidation of now-outsourced flying back to the major carrier. That’s not going to be pleasant for some “regional airlines.”
Fallout For Airports: Let’s recap the realities: the value of smaller community feed is declining. Major airline systems have less need for it, particularly when the costs of flying small units of capacity are increasing. Fleets will gravitate along these dynamics.
So, for some smaller communities, it may mean loss of service at the local airport. Advice: don’t get scammed by proposals to do jive studies or surveys to “find more airlines.” Taking a hard realistic look at keeping the region connected to the global air transportation system will be far more valuable that chasing off to speed-date meetings to “lure more service” – which is like forming a lifeboat-selection committee on the Titanic. There aren’t any hidden airlines out there. So deal with it and start thinking of air access as regional, not local.
But for many airports, these changes will open new capacity, seats, and access. There are a lot of airports where the current lift is insufficient to meet demand, and a shift from 50-seat flights to 76, 100 and larger seats per flight will be an economic bonanza.
One thing is certain: the structure of the US airline industry as we know it today will be very different in five years. The brands will likely be the same, but the operators will be fewer. It’s consolidation that consumers won’t see in terms of brand-choice, but they will see it in the structure and reach of airline route systems.
-----
The US Airline Industry -2020. A Futurist Glance –
Get With The Trends, Or Get Left Behind
Since 1984, Boyd Group International has set itself apart as the leading source of aviation trend and data forecasts.
Our projections have sometimes been counter to at-the-time consensus, and that occasionally tended to draw fire from various corners of the industry – which is always welcome, it tends to bring discussion and further illumination to the subject. A couple examples:
In 1986, in one of our first industry White Papers, we correctly pointed out that code-sharing would be the end of the line for what was then a robustly-growing independent regional airline sector.
Now, that wasn’t real popular with some regional airline presidents who were at the time all enamored with the A-1 or C1R first-class, positive space pass cards they just got from their new major airline partner. But not to worry, most of them were gone in a couple of years. Some just went away, Some sold out to the major. Others, like Trans-Colorado and Rio, simply got kicked out the door, pass cards and all, when the major decided to replace them with another lift-provider.
A few very successfully transitioned into being contract lift providers. But code-sharing eliminated what was once an entire independent airline industry. BGI was the only consulting firm to forecast this outcome from the start.
In 1989, we alone published a White Paper that indicated the value of the then-planned “regional jet.” Although the “regional airlines,” which were the initial customer targets for the airplane, were by then gone, subsumed into major airline systems, our analyses went counter to then-ambient thinking that similar-size turboprops has much better economics.
True, but we noted that an RJ could cover twice the ground in a two-hour segment, opening a new hub-feed opportunities for major airlines. After a slow sales start, the rest is history.
Ten years later, when “everybody” was predicting near=]-unending demand for these machines, our fleet projections showed that the market demand for 50-seat jets was essentially fully met, and in fact the current orders and options far exceeded what the market could absorb. (The Delta system carriers at the time had something like 1,000 of these machines in service, on order, or on option. Never happened.)
Our OEM clients weren’t too excited at the time. But here we are, with he desert filling with run-out small jets.
The 20th International Aviation Forecast Summit – More Insight
At this year’s IAFS™ we again covered a wide range of issues and explored areas that no other event even gets near. We thought we might boil down a few of the issues we covered, and how they will manifest in the next few years.
US Air Transportation Route Structure: More – much more – regionalization of air service access into fewer commercially-served airports.
As we’ll point out, there are three main drivers of this trend: fleet changes, economics of hub feed, and highest and best use of connecting hub real estate.
Besides, despite voodoo-like studies and mystical programs to “lure” scheduled flights to small airports, there simply are no longer the airline economics in existence – or the airlines themselves – to make that happen. Gone.
That means a lot of smaller local airports will lose service in the next five years. It doesn’t mean the community will be cut off, just that consumers will be driving longer distances to access the system. Actually, in many regions, that’s already the case.
Airline Fleets: Write this down: by 2020, virtually all 50-seat jets, all current-generation turboprops in major airline service, and a goodly portion of today’s 70-seat jets will be retired. Gone. Not there. Vamoosed.
For communities that can’t support larger units of capacity, the writing is in the sky, and regional planning approaches are in order.
No, it cannot be reversed. That’s because , as we noted above, it will be the local consumer that’s part of the driving force. When there’s an airport 90 minutes away (more, even) with dozens of flight options, the two or three branded flights at the local airport are non-competitive. Frequency and alternative options in the event of off-schedule operations are foundational consumer requirements.
And if the local flights are with a non-major brand airline with a single-seat airplane, it’s just placebo service – almost nobody will use it, because it typically is non-connective, and non-attractive to consumers.
Again, the only way this dynamic can be ignored is in the fantasy that there are lots of airlines “out there” that can be brought into town, if only the right mystical data can be ginned up to convince the assumedly-nebbish airline planner to see the light. Long before 2020, this fantasy will be replaced with reality.
Yes, there is a global market for new-technology turboprops, but in any case they won’t be in production by 2020.
Airline Strategies. The focus will be on system revenues v cost. Period.
Passenger volume and market share will be secondary to maximizing return on investment. Feed-contribution at connecting hubs will be analyzed more closely. The revenue-value of every gate will be a metric – which means less focus on route-spokes to smaller airports. Point: airlines won’t need that incremental feed if it spills traffic at the hub from larger commercial points.
Alliances: The aggressive independent strategies of carriers such as Delta and Korean indicate that the expected consolidation into three global alliances isn’t in the cards anymore. That would also point to continued and robust global competition.
Domestically, however, as noted, air transportation will continue to be focused at fewer de facto regional points.
Perks: Consumer incentives have value only when an airline has incremental extra product it cannot sell otherwise. That was the case in the 1980s, but with 85%+ load factors and much-reduced competition, the need to give things away free has long since vaporized.
There is no longer a system-wide pool of non-sold seats at any airline. Based on fleet strategies forecast in the 2015 – 2024 Boyd Group International Fleet Trend & Demand Forecast, there are no areas of the globe that are in much danger of getting into an over-capacity situation. That means the need to offer perks will be focused on recruiting specific high-yield consumer segments.
There is no longer the need for frequent flyer programs to ensure brand-loyalty, particularly among any but the highest-yield traffic sectors. Therefore, it makes no sense for airlines to give seats away under FF programs, when they can sell them outright.
We’re seeing it today, with first class upgrades. Major carriers are offering these seats for sale to just about any passenger, for an up-charge. The platinum-diamond-iridium level frequent flyer can just board with their economy seat, because a free upgrade is not in the cards.
International Access. As we’ve predicted, the need for EU carriers to access large non-hubsite airports to feed their own hubs will be a major dynamic. The recent move by Delta to operate RDU-CDG is part of this dynamic – substantial traffic will be flowed to other SkyTeam partners at Paris.
Targets to watch: CVG, MEM, IND, MSY. The particular criteria are strong local traffic and strong road-hub access from industrial regions.
Distribution Channels, The recent move by Lufthansa to add an $18 surcharge on booking from independent OTAs (On-line travel agents) has been misunderstood. It’s not a fee, per se, but is a cost-recovery charge. (We covered this in a session with Larry Ryan of Lufthansa at the IAFS™, by the way.)
This is just the harbinger of a move toward direct airline retailing, as the OTA channel will increasingly be less cost-effective. Just as the need and utility for travel agencies as main retail outlets evaporated 20 years ago, the time may be coming for OTAs as well.
Final Point: the basics of air transportation economics are fundamentally changing. Airports and communities need to identify new trends and plan accordingly. In a future update, we’ll cover the non-airline opportunities that airports will see in the coming decade.
In the meantime, trying to reconstruct the past will successfully got one there.
10-17-2015, 02:04 PM
#2
Gets Weekends Off
Joined APC: Jan 2009
Posts: 381
Also, thanks to the 1,500 rule regionals are having a hard time getting pilots to work for $22/hr. The unintended consequences of the new law are coming home to roost. I recall that the two pilots on the BUF crash had > 2,000TT.
10-17-2015, 02:18 PM
#4
Gets Weekends Off
Joined APC: Sep 2010
Posts: 2,648
Originally Posted by amcnd
Ive been reading the boyd group scence the mid 90's. Never been impressed with there "predictions"....
10-17-2015, 02:23 PM
#5
Gets Weekends Off
Joined APC: Feb 2014
Posts: 742
Originally Posted by amcnd
Ive been reading the boyd group scence the mid 90's. Never been impressed with there "predictions"....
Just trying to help.
10-17-2015, 02:51 PM
#7
Gets Weekends Off
Joined APC: Dec 2010
Posts: 977
Originally Posted by BizPilot
Also, thanks to the 1,500 rule regionals are having a hard time getting pilots to work for $22/hr. The unintended consequences of the new law are coming home to roost. I recall that the two pilots on the BUF crash had > 2,000TT.
You're totally clueless!
10-17-2015, 03:24 PM
#9
Gets Weekends Off
Joined APC: Sep 2006
Posts: 926
Originally Posted by BizPilot
Also, thanks to the 1,500 rule regionals are having a hard time getting pilots to work for $22/hr. The unintended consequences of the new law are coming home to roost. I recall that the two pilots on the BUF crash had > 2,000TT.
10-17-2015, 03:36 PM
#10
Gets Weekends Off
Joined APC: Jul 2013
Position: 175 CA
Posts: 1,544
I stopped reading when it was said that United is buying 175s and leasing to regionals. At Skywest at least there's a placard in the cockpit that says owned by Skywest. It will always make more financial sense to outsource certain routes to regionals, there will be consolidation at regional level and larger regional aircraft flying small regional aircraft routes now less frequently. Any business that can get labor cheaper and mitigate risk by contracting to a third party will take that unless there's risk that that feed won't be reliable. There's a shortage at the regional level, but one regional will take another's business, that business will do a bankruptcy and Come out on top and so the cycle continues. Anyone that wants to move on to mainline wants them to take back their flying (even though I think most people don't realize that that doesn't mean everyone at a regional will get a job at mainline, half would at best due to larger capacity aircraft.) but realistically no mainline pilot will fly a 175 at anywhere near regional rates
Thread
Thread Starter
Forum
Replies
Last Post
ArcticDog
Major
8
12-26-2008 08:08 AM
flybywire44
Major
51
11-08-2007 12:13 PM
