The next round of consolidations are going to be at the regional level. There are a abundance of regional carriers whose contracts are coming up for renewal. As those contracts come up, they will either, be renewed, or not be renewed which will lead to said regional losing its flying. As a regional lose it flying, it will be force to shrink, shutdown, or merge with someone, or figure out a way to gain replacement flying. See Compass and GoJet for this example.
This. The big winner will be SkyWest unless the economy wrecks Alaska Airlines, they are doing about 15% of Alaska’s flying and that could hurt, but still leave them the biggest player. In alternate, they could absorb Horizon if Alaska is hurting and needs some cash which would wind up being a bonus. SkyWest and Republic will be the last man standing so to speak. SkyWest gobbling up the UA/DL regionals and Republic the AA regionals.
First off, the notion that the wholly owneds would disappear is crazy. Their flying is done 100% at cost and the internal synergies that have occurred already with those carriers are highly unlikely to ever be able to be achieved with an outside party.
Yes AX, G7 and CP are likely to go the way of the dodo and YV's flying will likely be absorbed by someone else (I believe it will be OO for AA, YX for UA) but with their own frames. That'll still leave you with OO, YX, OH, PT, MQ, EV, QX & 9E moving forward which is a pretty good setup that will still keep the market competitive but allow the carriers to better stand on their own.
I agree 100% that we'll see some consolidation/reduction among the regional operators in the coming years.
DL has already established the precedent by phasing out their operations with GoJet and Compass, leaving SkyWest, Republic, and Endeavor as the remaining Delta Connection operators.
For AA, they have three wholly-owned regionals with Envoy, Piedmont, and PSA. I wouldn't be surprised if AA eventually consolidates them down to two or even one to eliminate the in-house redundancy/overhead (as US did when they phased out Allegheny). For external contacts, Compass is easily the weakest link with the smallest contract. SkyWest and Republic aren't going anywhere long term. Mesa is a bit of a wild card since they still have a sizeable fleet on contact with AA, but my long term prediction for AA is that they'll eventually be down two 3-4 Eagle contracts: a consolidated in-house subsidiary (Envoy/PSA/Piedmont), SkyWest, Republic, and maybe
UA has ExpressJet and SkyWest as their two largest partners; they aren't going anywhere. On the other end of the spectrum, CommutAir is easily the weakest link. They don't own any of the aircraft they're operating for UA — the E145s are either directly owned by UA or by Wells Fargo (and whether UA or C5 hold those leases, I don't know, but I'm guessing UA). UA could easily consolidate C5's operations into either ExpressJet or Trans States. Air Wisconsin is the second-weakest link in that they also exclusively provide 50-seat lift, but the key difference is that ZW directly owns their CRJs. So long as there is still a need/demand for 50-seat lift within the network, ZW is likely to stick around and fill that niche, even if the larger partners phase out their CR2s and 145s. I also wouldn't rule out the chance for ZW to get larger aircraft.
ZW's future also depends on what I look at as the "gray areas" that are Mesa, GoJet, and Trans States. TSA operates fewer aircraft for UA than ZW, so that might put them on the chopping block sooner than ZW. However, TSA's sister airline GoJet will be receiving CR5s from UA to expand their contract. Mesa also still maintains a fairly sizeable operation for UA, larger than their fleet for AA.
So, making a prediction for the future of the UAX operation is a bit more challenging, but in the near-ish term I think CommutAir and Trans States are most likely to be phased out, with their E145 operations either being folded into EV or upgraded to larger aircraft from other carriers depending on the route.
Longer term, I can see UA making decisions on their operations with Mesa, GoJet, Repubic, and Air Wisconsin. If they wanted to phase out Mesa, they could fold the E175s into either YX or EV, and the CR7s into OO. Likewise, GoJet's operations could get folded into OO.
Air Wisconsin is harder to predict. I think as long as UA needs 50-seat lift, they'll be around, but what I cannot predict is whether or not ZW will get the chance to expand their operation and fly larger aircraft for UA or not.
SkyWest and ExpressJet aren't going anywhere, and I doubt Republic is going to leave the UA operation anytime soon, either.
Oh, and as far as speculation on the mainline operators: I honestly wouldn't be surprised if AS, HA, and B6 were to form some kind of IAG-like ownership alliance where they all share the same corporate parent and financial resources, but maintain separate operations under the strength of their individual brands.
I'd take the awe of understanding over the awe of ignorance any day.