cf105

I was talking about AA the airline, not AAG the financial group. The 4 airlines of the Group do not have the same CFO and CEO as far as I am concern, not the same payroll and not the same expenses account.

cf105

Never wrote "6 WO". Read again.

cf105

Never wrote AAG. I was talking about AA itself, not AAG the financial group. One of them is still contracting 6 non-WOs, while at there same time using the group's 3 WOs.

cf105

They are independent companies that belong to the same financial group. They most certainly do. It is part of what makes having a WO regional so alluring.

As you are saying and what I meant, independent companies that belong to the same financial group. Comair... Nothing is ever certain, nothing is protected, financial organizations buy and sell, close and start assets as they please/need. It is alluring to have financial assets, as much as profiting for selling or closing them do. Unpredictable.

They can’t instantaeously wind down non-WO regional carriers. The way the market is now we are seeing unprecedented moves made by many of the LCCs and ACMI carriers to secure pilot feed. Look at Kalitta and the ExpressJet pilots for reference. The second it is announced that they are transferring/shifting flying the regional losing said flying will implode rapidly. It is a pilot’s market and there are plenty of jobs out there. Just because it hasn’t happened yet doesn’t mean it won’t. AA has been following through on just about everything they’ve stated they want to do in the past 5 years. They have stated that they want 3 WO carriers and 2 contract carriers. Why would that magically change just because the full timeline for this reduction in contract carriers hasn’t been completed yet? In regards to the shifting in flying, most of what you’re seeing is CRJ700s to PSA so they can operate an all-CRJ fleet and Envoy can operate an all-ERJ fleet. And Piedmont is getting 145s to replace the D8s and pickup the 50-seat flying all along the smaller but lucrative east coast markets.

Very interesting that they are planning to keep 2 non WO carriers... Leverage? Is it that the 2 they will keep have a better completion rate than their 3 WOs right now? Anyway, all of the above is assumption as when will it happen, if it happens and we don't even know if 2 of the 3 WOs will be absorbed by 1 or if one will be dismantled with assets and pilots send to one of the other. At this points, it's just financial assets with all the guarantees that it means.



This isn’t a wrong point, but it isn’t entirely accurate. The downside to using contract carriers comes from 2 big things: 1) You have far less control over your product and the woes that may or may not affect the contract regional and
Maybe on inflight training and quality control but definitely not on operational, flights cancellations, flight delays. 2 or 3 of the non-WO regionals working for AA have a much better completion rate and on time arrival. And Legacy airlines thrive on that

2) you must now split any profits with the contract carrier as opposed to keeping all the profits for yourself.

I may be wrong but from the financial structures, the business models and the way they work, I see that AA the airline makes the same profits, if not more, using the regional contract airlines, because they control/decide the buying price of service: you wanna work for the big guy, offer him the price he's asking. AA demands and gets the price they want for a route. They are not splitting any profit with the contracted airlines. 1 company offers a service, another company purchase that service, no one is sharing anything. Most probably exactly the same price they get from using the 3 AAG WOs (remember, not the same bank account, Envoy has to invoice services to AA). Difference between there contract airlines, for example is that RAH doesn't invoice per seat on routes but per plane on routes.

Here is the upside to having a couple of larger contract regionals: You don’t have to pay for and maintain the certification and training standards for specific flight ops. And by that I mean Aspen flying and over-water Caribbean flying. Why spend the money to have your WOs trained and certified when you can pay a marginal fee to have your contract carrier who already happens to maintain those training and certification standards to do it?

Again, a company contract other companies to deliver a service, said company needs, at the price said company needs.
Believe me, the cost of training for Caribbean/Central America ops, as EOW ops is peanuts.... like the cost of having 1 or 2 guys write an International Operation Guide and have it on the iPad.

It's supply and demand. They need all these 6 contract airlines for right now, will let one go if another one can provide the same flying to replace the departing one. But they will always keep some cheapos in order to keep everyone's price under control. They will Neve rallow themselves to be controlled by AAG's WO or by airlines like Skywest or RAH who would love to increase cost of service to help their payroll and profits.



Answers bolded above...[/QUOTE]

Fun times

chrisreedrules

AAG has not minced words in any of their quarterly townhalls or state of the airline addresses or filings that they make more money from their WOs than non-WOs. That is fact. I’m not sure where exactly you’re getting your info from...

MD-11Loader

Not sure if the PSA employees can see this, but it was on our jetnet earlier this Years. Isom says at the end “each time we can take an aircraft into one of our wholly owned’s, it can mean hundreds of thousands of dollars per year of revenue.”

https://w.wg1.kontiki.com/widgets/aa/player/e1b78dda-48f5-490e-919b-7e1206f08dd8?params=MD10cnVlOzE9MTM7MTI9ZmFsc2U=&v aletKey=vk_c982cgyybid9c2bml0f3euec6mgjk2o0

chrisreedrules

Yea I’ve seen that. Buddy of mine is a management pilot over at AAG. He said the original plan as they understood it was that AAG wanted 3 WOs flying different types and 2 or maybe 3 contract carriers. That has been their plan since I have been at a WO. Just this year apparently AAG has said that they want to bring more flying in-house and eventually have a 100% WO feed. I personally think that may be a bit of a pipe dream unless they decide to make pay a priority but that apparently is what they have been told.

OffAtTango

Mesa - 64 CRJ-900's
Republic - 84 E170's
Skywest - 60 CRJ-700's
Compass - 20 E170's

228 American Eagle aircraft are operated by non-wholly owned airlines. I believe only Compass's are owned by AAG so they could transfer those to Envoy if they really wanted to. That still leaves over 200 non-WO, non owned by AAG, 76 seat regional jets. You have to be delusional to think that AA would give up that much lift. Plus, once fuel prices rise again, the first planes to be parked will be the 50 seaters which only the wholly owns fly.

Varsity

AA also owns some of the Skywest CRJ's. They are the only aircraft Skywest operates that they do not own.

Mesa's CRJ-900's are the oldest ever built. It's not unfathomable to see them replaced by new orders at PSA or 175's at Envoy.

Nh114

I don’t believe SkyWest flys any AA owned. And Mesas oldest 900 is 15 years, that’s not all that old.