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Let's Talk Regional Contracts And Consolidation  
User currently offlineFlyASAGuy2005 From United States of America, joined Sep 2007, 7004 posts, RR: 11
Posted (4 years 1 week 2 days 17 hours ago) and read 2640 times:

Hello all. I was originally going to focus on Continental-United and Conti's scope clause; no jets above 50 seats (or something there-abouts). I can only imagine that is going to be one of the points when trying to negotiate the pilots' contract with the combined airline. With United's G7, YV, S5, and OO operation and all.

Delta Connection; I have heard on here more than once but never saw on paper that DL is trying to get down to 4 regional partners. I would say with the recent aquisition of Mesaba by Pinnacle and Compass by Trans States; I would say they are just about there, sort of...So we have ASA, SkyWest, Comair, Compass, Freedom (when is the flying oficially oing away?), Shuttle America, and Chautauqua Airlines. We can also look at it as Comair (wholly owned), SkyWest Inc., Freedom, Republic Airways Holdings, Pinnacle Airlines Corp., and Trans States Holdings.

I thought their whol reasoning for getting multiple carriers through the system was to avoid what happened with Comair?

What's everyone thoughts?


What gets measured gets done.
11 replies: All unread, jump to last
 
User currently offlineFlyASAGuy2005 From United States of America, joined Sep 2007, 7004 posts, RR: 11
Reply 1, posted (4 years 1 week 17 hours ago) and read 2442 times:

Bump

Bump

Bump  



What gets measured gets done.
User currently offlineAirport From , joined Dec 1969, posts, RR:
Reply 2, posted (4 years 1 week 17 hours ago) and read 2421 times:

Considering the significant change of direction that has been happening at QX, I don't think its all that unreasonable to suggest that QX will start flying for Delta and other carriers using Q400s once SkyWest retires the Embraers.

I do know that one of the shifts in strategy at QX is that they now are focused on lowering costs so they can win contract flying with other airlines. Considering they have the largest fleet of Q400s in North America (and will take options if they are rewarded contract flying), which serve smaller communities much better than the CRJ-200 can, they can fill in a niche that very very few regional operators can.

The only downside that the Q400 has is its reliability issues. However, at QX, with almost 10 years experience with the type and ever-improving reliability, they will be able to operate them at better margins than any other regional carrier in the skies.

I'm just worried about how management is going to try and lower costs. If they go after pilot wages, which I think they will, then I have a hunch that QX pilots might go on strike, which if that happens... that will be bad, bad news.

Cheers,
Anthony/Airport


User currently offlineapodino From United States of America, joined Apr 2005, 4234 posts, RR: 6
Reply 3, posted (4 years 1 week 12 hours ago) and read 2342 times:

Quoting FlyASAGuy2005 (Thread starter):

I thought their whole reasoning for getting multiple carriers through the system was to avoid what happened with Comair?

The biggest problem with this, is that it creates so many inefficiencies throughout the DCI system, that this has made it an Achilles Heel of the DCI system, and its also a problem for UA as well, and US to a much smaller extent. Here is why. Lets take a look at Minneapolis for example. With the merger in place, there are now 5 DCI carriers which have a sizeable operation in MSP (Mesaba, Pinnacle, Compass, SkyWest, and ComAir). With the exception of Compass, all are CRJ-200 operators. Lets say Mesaba is operating a CRJ-200 flight from MSP-ATW. Let us also assume its the last flight of the night. Now lets assume that the CRJ-200 goes tech and its not a quick fix. The passengers happen to see about 5 or 6 other CRJ-200's painted in Delta colors sitting on the A concourse, but are told that there are no planes available. If only of the carriers is a CRJ-200 operator, all those airplanes would belong to that carrier and they could easily swap to a different plane. But in this case, since none of the other CRJ-200's belong to Mesaba, you end up with a long delay to fix the problem, and its almost impossible to explain to passengers who aren't aviation buffs and in the know as most of us on A.net are. (And I do want to mention, this very scenario that I just described actually happened to me, and we took a 4 hour delay leaving MSP because of it)

Another problem is it adds costs to the regional partner, who are trying to keep their costs down so that it actually benefits the major partner. The main reason for this is if you want a regional carrier to operate a certain number of flights from each hub, then in all likely hood that regional partner is going to have to have a crew base in every city, and some MX presence as well. More crew and MX bases = more costs to the regional carrier. Or in some cases, the regional partner won't open a crew base or a MX base in a big hub, so when a plane goes tech or has a crew member call in sick from the hub, try explaining to your passengers why you have to ferry an airplane out of a major hub city for MX, or can't replace a crew there. Best example of this is Air Wisconsin. CLT is now ZW's second biggest city in terms of number of departures, yet ZW has no MX base or crew base in CLT at all, which BTW is US biggest hub right now. Yet ZW maintains a MX base in RDU with only 10 daily departures, most of which are to either DCA or PHL. It makes no sense. Can you imagine if a UA express carrier operating in and out of ORD had no domicile in ORD, or a DL connection having no domicile in ATL?


User currently offlineflyby519 From United States of America, joined Jul 2007, 1124 posts, RR: 0
Reply 4, posted (4 years 6 days 18 hours ago) and read 2215 times:

I think from the mainline point of view having multiple carriers is good, but having too many is bad. I think the industry is settling into 3 main players in the legacy arena (UAL/CO, DAL, AA) and the regional markets will consolidate significantly as well. I could see each mainline carrier having 3 significant regional partners, with some overlap such as Skywest performing UAL and DAL flying at the same time.

Here are the following players in the regional game today. Ive grouped them in clusters where I think they could wind up eventually. Feel free to re-arrange!

Skywest
ASA
Eagle
Horizon

Xjt
Republic
Air Wisc
Piedmont
PSA

Pinnacle
Colgan
Mesaba
Comair
Commutair

Mesa
Compass
TSA
GoJets



These postings or comments are not a company-sponsored source of communication.
User currently offlineFlyASAGuy2005 From United States of America, joined Sep 2007, 7004 posts, RR: 11
Reply 5, posted (4 years 6 days ago) and read 2057 times:

Quoting Airport (Reply 2):
I don't think its all that unreasonable to suggest that QX will start flying for Delta and other carriers using Q400s once SkyWest retires the Embraers

Very true. But that is a lot of capacity for some markets that got 30 seats to 70+ seats. CO for example I think was sort of forced into using the type because of their scope clause so where they would have most likely loved to use the CR7/9 or 170/175s, they are using the Q400 on some pretty long, high density routes. In the end, they are probably saving money as they don't have this "all jet fleet" craze that Delta and others have.

Quoting apodino (Reply 3):
Yet ZW maintains a MX base in RDU with only 10 daily departures, most of which are to either DCA or PHL. It makes no sense. Can you imagine if a UA express carrier operating in and out of ORD had no domicile in ORD, or a DL connection having no domicile in ATL?

THAT I don't understand. I was looking at some of their F/A bases and was wondering where Raleigh even fits into the mix. Norfolk? So when someone goes down they have to get an F/A to say CLT? I guess it works for them as they haven't changed...yet. But without additional flying or getting larger a/c I don't see Air Wis surviving as a stand-alone. I can very well see Mesa Air Group trying to buy them as a subsidiary.

Quoting flyby519 (Reply 4):
Here are the following players in the regional game today. Ive grouped them in clusters where I think they could wind up eventually. Feel free to re-arrange!

Meaning how you would rank them as far as being major players for mainline?



What gets measured gets done.
User currently offlineJBo From Sweden, joined Jan 2005, 2312 posts, RR: 0
Reply 6, posted (4 years 5 days 23 hours ago) and read 2046 times:

Quoting flyby519 (Reply 4):
Here are the following players in the regional game today. Ive grouped them in clusters where I think they could wind up eventually. Feel free to re-arrange!

You've left out a few, notably Great Lakes and Gulfstream, who incidentally are the only remaining Beech 1900 operators.



I'd take the awe of understanding over the awe of ignorance any day.
User currently offlineflyby519 From United States of America, joined Jul 2007, 1124 posts, RR: 0
Reply 7, posted (4 years 5 days 19 hours ago) and read 1955 times:

Quoting JBo (Reply 6):
You've left out a few, notably Great Lakes and Gulfstream, who incidentally are the only remaining Beech 1900 operators.

I dont have high hopes for the longer term viability of those two carriers. I think Cape Air is going to become a main player in the EAS flying which will hurt Great Lakes. Gulfstream just needs a re-vamp of their brand similar to Colgan. I could see them being picked up by the last airline in my groupings so I will add them below as well as GLA. Overall, I see the regional industry shrinking by 20-30% of what it is today. When it settles out the regional feed will be split according to the numbers in parenthesis below.


Regional Feeder #1 (30% of all regional feed ASMs industry wide)
Skywest
ASA
Eagle
Horizon

Regional Feeder #2 (30% of regional ASMs)
Republic
Xjt (brand becomes extinct, flying goes under the Republic/CHQ certificate)
Air Wisc
Piedmont
PSA (brand becomes extinct, flying goes under the Air Wisconsin cert)

Regional Feeder #3 (20% of regional ASMs)
Pinnacle
Colgan (We already know this brand will go extinct, and move to Mesaba cert)
Mesaba
Comair (Brand extinct, goes under Pinnacle cert)
Commutair (Brand will go extinct, move to Mesaba cert)

Regional Feeder #4 (15% of regional ASMs)
TSA (Brand becomes extinct, flying goes to Gojets cert)
GoJets
Compass
Mesa (Brand becomes extinct, flying goes to Gojets cert)
Great Lakes
Gulfstream (Brand name becomes extinct, goes to Great Lakes cert)

The remaining 5% might be covered by a small niche carrier like Cape Air

[Edited 2010-07-17 16:34:05]


These postings or comments are not a company-sponsored source of communication.
User currently offlineapodino From United States of America, joined Apr 2005, 4234 posts, RR: 6
Reply 8, posted (4 years 5 days 13 hours ago) and read 1825 times:

Quoting FlyASAGuy2005 (Reply 5):

Quoting apodino (Reply 3):
Yet ZW maintains a MX base in RDU with only 10 daily departures, most of which are to either DCA or PHL. It makes no sense. Can you imagine if a UA express carrier operating in and out of ORD had no domicile in ORD, or a DL connection having no domicile in ATL?

THAT I don't understand. I was looking at some of their F/A bases and was wondering where Raleigh even fits into the mix. Norfolk? So when someone goes down they have to get an F/A to say CLT? I guess it works for them as they haven't changed...yet. But without additional flying or getting larger a/c I don't see Air Wis surviving as a stand-alone. I can very well see Mesa Air Group trying to buy them as a subsidiary.

Two things. I had a typo in my last post. RDU is a crew domicile for AWAC, not a MX base. Secondly, how could MAG afford to buy ZW right now, considering they are in Chapter 11? If anything, I would see it the other way around as ZW is still in good financial shape, but as I stated in other threads, Johnny O's ego will make that unlikely.



One thing I was thinking about on the way home that we should keep an eye on. Most of the majors report earnings this week, and Wall Street is predicting lots of black ink for a change. The reason why this is important is because of ongoing pilot negotations at every major carrier save for DL. Black ink is going to give the pilots unions a bargaining chip in negotiations. One of the biggest items on their plates is scope (Especially at AA and UA). If the pilots can leverage their position and get the scope in their contract that they are looking for, in exchange for a lower pay scale than they are initially looking for perhaps, then this will really make the regional industry interesting. If UA gets tougher scope, I think Mesa is done for good. They are losing all their 50 seat flying, and I doubt that US will extend their 900 flying beyond 2012. Also notice that aside from them, of all the main players at the regional level, everyone else who has planes bigger than 50 seaters has a relationship with Delta, because after this whole thing plays out, Delta may have the loosest scope left.

Anyways, aside from consolidation, keep an eye on the Pilot Contract negotiations, especially at UA, CO, and AA. What happens with these carriers will be a great indication of the future in this industry.


User currently offlineFlyASAGuy2005 From United States of America, joined Sep 2007, 7004 posts, RR: 11
Reply 9, posted (4 years 5 days 12 hours ago) and read 1795 times:

Quoting apodino (Reply 8):

Very good point and something I was leaning towards. With a combined UA/CO anything can happen and I can imagine the pilots would only want to go where CO is now unless they can get more $$$ from the company to relaxe the scope a bit.



What gets measured gets done.
User currently offlineAntoniemey From United States of America, joined Dec 2005, 1555 posts, RR: 4
Reply 10, posted (4 years 4 days 16 hours ago) and read 1590 times:

Quoting FlyASAGuy2005 (Reply 5):
In the end, they are probably saving money as they don't have this "all jet fleet" craze that Delta and others have.

Actually, for several years CO made a big deal about having an all jet fleet in their advertising. I think they still might use it with VERY careful language...



Make something Idiot-proof, and the Universe will make a more inept idiot.
User currently onlinesilentbob From United States of America, joined Aug 2006, 2047 posts, RR: 1
Reply 11, posted (4 years 4 days 16 hours ago) and read 1565 times:

Quoting flyby519 (Reply 7):
Regional Feeder #2 (30% of regional ASMs)
Republic
Xjt (brand becomes extinct, flying goes under the Republic/CHQ certificate)
Air Wisc
Piedmont
PSA (brand becomes extinct, flying goes under the Air Wisconsin cert)

PSA already has CRJ700s on their cert. It would make no sense to shut that one down and move it all to the ZW cert, when ZW only flies the 200s. I'd also expect Piedmont to be shut down entirely in the next five years or so. In the last decade their fleet has been cut in half and is not aging well. They also have a very senior crew.


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