airplanetire
Posts: 1783
Joined: Sun May 13, 2001 11:59 pm

Why Do Airlines Have To Have Regional Divisions?

Wed Jul 10, 2002 9:50 am

Why does it seem that so many major airlines always have at least one regional airline within their airline? For instance, Delta has several. One of them is ASA. They operate flights on behalf of Delta. They wear the Delta livery. Why must major airlines always buy a regional airline? What is wrong with just getting regional aircraft within your own airline and still have it be part of the mainstream airline?
 
B747-437B
Posts: 8777
Joined: Thu May 30, 2002 6:54 am

RE: Why Do Airlines Have To Have Regional Divisions?

Wed Jul 10, 2002 9:58 am

What is wrong with just getting regional aircraft within your own airline and still have it be part of the mainstream airline?

You can maintain lower costs for labor by treating each division as a seperate airline and paying their staff lower wages.
"The A340-300 may boast a long range, but the A340 is underpowered" -- Robert Milton, CEO - Air Canada
 
srbmod
Posts: 15446
Joined: Tue Mar 20, 2001 1:32 pm

RE: Why Do Airlines Have To Have Regional Divisions?

Thu Jul 11, 2002 2:34 am

Delta originally had small ownership stakes in ASA, Comair, and Skywest. They over time, increased their stakes in EV and OH to prevent them from signing agreements with other airlines. Their stake in Skywest has lessened because they are slowly but surely rethinking their Delta Connection operations out West. ASA and Comair are based out of major Delta operations, CVG and MCO for Comair, ATL and DFW for ASA. With Comair being replaced in Florida by Chautauqua, look to see some Comair ops increase @ DFW and perhaps even starting flights@ SLC. The regional airlines were bought up in order to protect airlines. Why else is Piedmont, PSA, and Allegheny wholly owned regionals of U.S. Airways? And the same for American Eagle? One of the reasons why ASA was purchased by Delta was that in the mid-90s, Valujet was rumored to be interested in buying them (VJ co-founder Robert Priddy was one of the founders of ASA), and Delta was involved in a heated war against them.
 
BWIA 772
Posts: 1613
Joined: Sun May 12, 2002 2:33 am

RE: Why Do Airlines Have To Have Regional Division

Thu Jul 11, 2002 5:32 am

Even here in the Caribbean our 2 main airlines have regional divisions and they are 2 regional airlines.

The reason why they are regional divisions is quite simple really, it to reduce cost and improve service. Eg BWIA created its regional service Bwee Express so that the airline's jets will be more available for the international routes. It is cheaper to operate turbo props on island hops comapared to that of a 737, MD83 or the L1011
Eagles Soar!
 
jhooper
Posts: 5560
Joined: Thu Dec 13, 2001 8:27 pm

RE: Why Do Airlines Have To Have Regional Divisions?

Thu Jul 11, 2002 3:00 pm

As an economics major, I have to say B747-437B gave the best answer.
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