joeblow10 wrote:mikejepp wrote:There is no way it makes financial sense to pay regional pilots that much to fly 50 seat planes at $100+/barrel oil when you could be paying them the same to fly A320s and 737s. Is it even possible for the airline to show a profit on these flights under these circumstances? What are the chances that this is the beginning of the end of the regional airline outsourcing business model? Not to mention there are not really any new RJs being built as replacements and, with a limited supply of pilots, you want them flying as many passengers as possible per flight. Is this deal just a stop-gap measure to allow a few years to wind-down the whole regional airline operation?
Especially considering the fact that other regionals will, no doubt, match these pay raises and therefore eliminate the advantage Piedmont/Envoy have in retention... now you're back to where you started but paying much much more. I've read Endeavor is already in talks with management about this and I'm sure others too.
The whole regional model was built on the idea that there were more pilots than there were jobs and they could, therefore, take advantage of these pilots' eagerness to work and build hours and consequently pay them poverty wages. The airlines did that long enough that word got out and fewer people started becoming pilots and now the whole thing is backfiring. The environment of cheap, exploitable pilot labor is now obviously over.
The assumption you mention that other regionals will match this increase is the big question that will have to be answered. At least from an outsider point of view, the only other regional that will likely immediately match this is Endeavor. Non wholly owned regionals have a very different “accounting” arrangement with the mainline companies, one that is going to be a lot harder to make huge pay increase work.
It seems that AA is willing to make regional flying a loss leader. It gets pilots in the door, and if they pay them enough, they will stick around long enough to fly for AA - perhaps for life. It also gets customers into their actually profitable network from smaller cities. So I agree - the economics don’t make a ton of sense on the surface, but it seems like this is a rather good solution to retaining pilots and customers. I bet Endeavor matches within a few months… but otherwise, it’s going to be tough for companies like Skywest or Mesa make this work unless the big guys up their cut.
Over at Airline Pilot Central the new Envoy and Piedmont (f.k.a. Henson Aviation) deals are shown and seem pretty confusing. Lots of bonuses (one time?), pay rate juggling, better reserve duty terms, holiday pay bonuses, better deadhead pay, et. al.
https://www.airlinepilotcentral.com/air ... /envoy_air
https://www.airlinepilotcentral.com/air ... t_airlines
Meanwhile Mesa (which does not have an exactly arm's-length relationship with AA) provides a considerable amount of American Eagle lift at some of the lowest pay rates in the industry. If they don't follow suit with the better pay/bonus deals offered by Envoy or Piedmont, will they end up flying even more Eagle routes due to being cheaper?
https://www.airlinepilotcentral.com/air ... a_airlines