Quote:
Originally Posted by Shootinstr8
But in the end I believe that eventually the domestic lift will be provided more by regional companies and those companies will be fewer and larger...ie economies of scale argument.
I see it a different way. As the costs of doing business with regionals increases, the pendulum swings back to just flying the routes with mainline crews. So, how are the costs increasing you ask?
1. Fuel. As the cost of fuel increases, the pass trough costs increase to the legacy carrier. At some point, it crosses over to the mainline being more cost efficient. As capacity decreases, larger gauge will be required to fill the void.
2. Customer Satisfaction. As the pass through costs increase, the mainline will put pressure on the regional to lower their costs. This translates into pressure on employees through pay cuts etc. This leads to disgruntled employees and poor operational performance. Freedom is being kicked to the curb by Delta. As this happens to more regionals, it is easier to control the quality of the product if it's your own people doing the work. (Not saying that mainline is all shiney, happy people either though.)
What I see is a change in the regional market, where a few large regionals provide contracted lift to numerous mainline partners, (to mitigate their exposure,) in the 76 seat and below market on thin margin routes, and the mainline operating 80+ seats and above at the mainline. Don't look for any scope relaxation. The pilot demographic at the legacies is now heavily populated by X-regional pilots, and they will be the last to vote away seats and the first to be willing to operate 90-100 seats at the mainline.
Just my view as a 12 year veteran of the airline game as both a regional and mainline pilot.