In my companies weekly newsletter, there was a lengthy article about existing RFPs from major airlines. The most noteworthy RFPs out there right now are from Delta and Northwest, and obviously Midwest and Frontier have RFPs out as well. Other than Midwest, which Air Wisconsin is probably the front runner for in everyones mind, the "expert analysts" think that in the end, it will be more the same with Republic, Mesa, and Skywest all winning more flying. I started thinking about this for a second and I began to find it deeply troubling. These three companies are already the largest regional carriers in the industry (not including American Eagle), and in some cases, they have bigger fleets than their mainline counterparts. The three companies might be the cheapest bidders right now which is why they are getting all the flying. Now lets say they end up getting flying being flown by other regionals currently. Mesa and Skywest pretty much got most of the Air Wisconsin flying that United betrayed ZW
out of. And Chautauqua, one of the Republic companies, has been awarded Continental flying that was done by ExpressJet. Now the Delta flying is presumably flying being done mostly by Comair at the moment, with some Mesa mixed in. The NW
flying is probably some of the old Avro flying from Mesaba, and possible upgrades on existing pinnacle flying.
So where am I going with this. If everything comes to light, then the three biggest regionals get bigger at the expense of some other regionals, which were only guilty of being in the wrong place at the wrong time. Whether or not it forces these other regionals out of business I don't know. But Comair is looking like it will be a ground handling, MX
company primarily, with not much flying. Even with the recent concessions from Mesaba unions, I don't think that company is going to last long, and the old flying will end up with one of the big three I mentioned. This process nearly forced ZW
out of business, the only thing that saved ZW
was the US bankruptcy that was conveniently timed. DH
was a casualty of this process. ExpressJet isn't in a great position either.
So how is a Tripoley bad. Well, the airlines were so competitive to bid down the costs to get where they are. But if only three carriers are major players, suddenly there are more mainline carriers out there then regionals, competing for services of too few regional carriers. This is going to drive the cost of doing business with the regionals up. And the mainline carriers are going to suffer again. Naturally I want ZW
to have more flying, but I think some competition is healthy for the industry, and I am worried that if only a few regionals are left, its going to cause problems in the industry. Thoughts?