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Regional Airline Partners -- Better Independent?  
User currently offlineSsides From United States of America, joined Feb 2001, 4059 posts, RR: 21
Posted (10 years 11 months 1 day 7 hours ago) and read 1843 times:

Your opinion -- is it better for a mainline carrier to contract out its regional operations to a smaller carrier (e.g. US Airways and Piedmont, TSA, etc.), or is it better for the airline to own its regional carrier(s) (e.g. American and American Eagle). It is interesting to me that Continental recently sold off its regional division as ExpressJet, but AA recently purchased its regional carriers. What are your thoughts?


"Lose" is not spelled with two o's!!!!
5 replies: All unread, jump to last
 
User currently offlineDC-10inLB From United States of America, joined Aug 2000, 140 posts, RR: 0
Reply 1, posted (10 years 11 months 1 day 7 hours ago) and read 1833 times:

It all depends on the airline of course. I think it's better for the majors to contract out to the smaller regionals - not just because I work for one - SkyWest. This sort of arrangement gives the airlines the ability to get their brand name into markets that might not otherwise get their service. Also the major has several aircraft types at their disposal between all of its regional carriers that it can decide where to deploy them. As well you as a regional have all the reason in the world to keep up your product quality, so that you can retain a contract with that major carrier. In the end everyone benefits from it, by using the aircraft best suited for a flight from the regional airline, the major can deploy its aircraft in other mainline markets. In a sense the major airline can double its fleet without buying any planes of its own.

User currently offlineSrbmod From , joined Dec 1969, posts, RR:
Reply 2, posted (10 years 11 months 1 day 6 hours ago) and read 1800 times:

With your regional partner under your corporate umbrella (or maybe more like under your thumb), you can better control things. It becomes (hopefully) nothing more than a mirror image of the mainline product, only with smaller a/c. Any problems you have with your feeder partner can hopefully be dealt with in-house, not with public bickering and back-stabbing (the entire United-ACA tussle comes to mind). Also by having your regional carriers in-house you can do better fleet planning and ordering, as you can buy for the group as a whole and get a better price. With your regional partner as an independent, you risk your airline's image, as they may not best reflect your airline as a whole. How many people have bad impressions of United and Delta because of ACA? Same with US Airways, Frontier, and America West because of Mesa. Of course people had bad impressions of Delta because of ASA, and they're a wholly-owned subsidiary. Having a mix of in-house and outside operator seems to be the best way to do it.

User currently offlineAndersjt From United States of America, joined Jul 2003, 390 posts, RR: 1
Reply 3, posted (10 years 10 months 4 weeks 1 day 12 hours ago) and read 1746 times:

Srbmod - you brought up a good point, something that I was thinking about over the weekend. What risks are UA and DL taking on by having alliances with independent regionals such as Skywest, ACA, and Mesa? By risks, I mean not only your point about poor service on the regional which puts a bad image on the main carrier, but what about receiving a good quality experience on the regional which the main carrier doesn't emulate?

A couple of weeks ago I had the chance to use UA's Skywest service between LAX and SLC and back. I used it before when this route was operated by Air Wisconson (after the United Shuttle shut down), nothing to write home about, but the experience with Skywest was vastly different. The planes were immaculately clean, and the Skywest flight attendants should be giving lessons in attentiveness and service to the mainline flight attendants. While reading the in-flight magazines, I was impressed at how much Skywest had grown (I remember their humble beginnings out of SLC) and the expansiveness of their route network. It rivaled some of the majors. My thought was, for some of these short trips, where UA/DL and Skywest overlap, why not choose Skywest all the time and bypass UA or DL?

Maybe this is why ACA is trying to go off on its own? UA retracted so much in short-haul service in the east, ACA recognized it and decided that they're better off on their own, rather than turing over some of their profits to UA? Now UA needs to find a partner in the east, and they also have a new competitor to deal with. As someone posted earlier, if UA had an ownership stake in ACA, this would not be a problem.

For economics, UA has turned over a lot of routes to the regionals, but from what I experienced, they could be paying a long-term price.



Oh how I long for the day when the skies were truly Friendly!
User currently offlineMotech722 From United States of America, joined Aug 2003, 211 posts, RR: 2
Reply 4, posted (10 years 10 months 4 weeks 1 day 11 hours ago) and read 1718 times:

There are definately pros and cons both ways. As pointed out, having regional partners under your corporate umbrella gives you the ability to better control things. Of course the major problem that comes to mind is what happens if there is a dispute with pilots or someone, and strike is involved? Then the airline has to work to solve the strike.

On the other hand, if you just contract with a regional, then you don't have to worry about a strike as much, since if, for a hypothetical example, if Mesa would strike in the future, UAL could then have Air Wis or someone else pick up the slack. Of course with your regional partner as an independent, you risk your airline's image, which was the case a few years back with UAL using Mesa as a partner, which they then dropped because of this. Ironic that Mesa is now a UAL Express carrier again.

I have to agree with Srbmod, having a mix of in-house and outside operators seems to be the best way to do it. You get the best (and worst) of both worlds, but at least if one way isn't working, you have the benefit of having the other option at your disposal too.


User currently offlineDC-10inLB From United States of America, joined Aug 2000, 140 posts, RR: 0
Reply 5, posted (10 years 10 months 4 weeks 8 hours ago) and read 1671 times:

Andersjt,

I'm glad you had a nice flying experience on Skywest, thanks so much for the compliments. Out of LAX, we have not only our airline, Skywest that we ground handle, but we have Mesa passing through twice a day, and Air Wisconsin coming through about 3 times a day. Last year Air Wisconsin had much more of a presence because of our lack of RJs relative the the amount of routes that demanded us. They were/are really great crews and loved the service they got from us, which was really nice coming from another airline. I guess we're doing something right. As winter approaches though I can't help but cringe at the thought of dealing with the AWAC BAe 146.

I just recently flew on Comair on the CR7 (can't wait till we get those) Great flight, I assume there's been quite a bit of an improvement since DL took them over. I'd never flown on Comair before, but it was quite nice.

This is why I think independant carriers do work well with majors. We have planes and services we can offer the airline and the flying public in general. We can offer more frequency on routes, and a faster turn time. We have an 11 year contract with UAL, so we'll be flying with them for some time to come.


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