Seeking opinions
What are the chances for at-risk flying to focus cities?

It seems like there is an opportunity to increase activity at recently announced focus cities (AUS/RDU/BNA/SJC) into business markets that would not support mainline. If an airline announces a focus city, it will see increased activity into new markets to which it does not currently fly. What are the chances that a regional partner could set up at-risk flights to support the focused growth?

For example, in BNA, could there be at-risk flying to business markets such as CVG/STL/LIT/IND.....? And in SJC, with AS announcing drops to TUC/SNA could a DL regional pick up that capacity?

I know there are also smaller hubs (BOS/SEA) where there could be some additional flying, but gates are an issue. If they were not an issue, would there be possibility for at risk say BOS- BTV/PWM/ALB?

Not sure if it is a pilot issue/gate issue or other, but what is the feasibility of adding at-risk flying to grow capacity where DL has indicated there is focused demand for their product?

Thanks in advance for constructive responses.

Most regionals don’t have the spare capacity and crew to perform significant at risk flying. Many struggle to staff current flying as is. There would likely also be issues with scope clauses (eg fleet caps) if larger RJs were used for the flying. Most at-risk flying has traditionally been done with smaller RJs/props.

Thanks for that. I wonder if the larger regionals, or those with 50 seaters would be more able to accommodate. It seems as there is a shift to larger RJs, not sure if there is a 1 to 1 replacement with larger RJs. Is there a limit in scope on how many 50 seaters can be flown? I imagine there is on the larger, but what about the smaller which are being used to generate demand?

OO is doing tons of at risk flying. I think what you are talking about is possible, but OO or whoever would have to convince Delta that the route being added is traffic being carried by other airlines as Delta would not let OO cannibalize an O&D where they already have strong share.

Thanks for that. Yes, OO is the main "opportunity" as they have the relationship and are already doing at risk flying. Just wondering about the second point. Does at risk ever "up gauge" or "up grade" to where the Mainline controls it as regional flying? I am just not aware of any at-risk flying that was then converted to be included into contractual flying. Can at-risk flying be done like this, to open a route, generate demand and convert to contractual flying? Thanks for the feed-back

jplatts wrote:

caflyboy wrote:

For example, in BNA, could there be at-risk flying to business markets such as CVG/STL/LIT/IND.....?

DL doesn't have a need to connect passengers to other destinations from CVG, STL, or IND through BNA as DL can already connect passengers from CVG, STL, and IND through ATL, DTW, or LGA.

DL also already serves its main ATL hub nonstop from LIT, and DL could extend LIT-DTW to year-round and add nonstop service to its SLC, MSP, and LGA hubs from LIT in order to connect passengers to additional destinations from LIT.

WN also already serves STL nonstop from BNA, and WN also has significant market share in both the STL and BNA markets. There are also a few other DL hub and focus city airports such as BOS, LAX, RDU, and SEA that are currently served nonstop from STL on WN but not DL.

The only reason why DL would need to serve markets such as CVG, STL, LIT, or IND nonstop from BNA is for O&D to and from BNA. If there isn't enough O&D to BNA from CVG, STL, LIT, or IND to warrant nonstop service, DL has no need to add BNA-CVG/STL/LIT/IND.

Thank you for your input. Yes it seems both WN and DL are going to be competing more for these passengers. Like AS and WN do in SJC. It seems like DL sees opportunity and wants to capture it. I agree that if DL sees the opportunity they will add their metal/regional operation to it. More specifically, I am wondering about where there is potential opportunity that they see could grow into their own opportunity. Can At-risk flying be used to generate demand in these markets where they will compete with WN or in non-competitive markets and the opportunity can be grown due to an increased presence in the focus city?

jplatts wrote:

caflyboy wrote:

I know there are also smaller hubs (BOS/SEA) where there could be some additional flying, but gates are an issue.

There are some more nonstop routes that could be added by DL out of BOS, LAX, and SEA, including the following:
BOS-BWI/CLT/DFW/DEN/IAH/SDF/STL/SAN/SAT
LAX-ORD/CLE/IAH/MKE/OKC/PHL/PIT/RNO/STL
SEA-CLE/DFW/IAH/PHL/STL/SAT

All DL/DL Connection flying from LAX and SEA (BOS, too?) is 2-class. Isn't DL scoped-out? You don't convince customers you have a premium brand by adding a bunch of CR2/E145 flying.

jplatts wrote:

MIflyer12 wrote:

All DL/DL Connection flying from LAX and SEA (BOS, too?) is 2-class. Isn't DL scoped-out? You don't convince customers you have a premium brand by adding a bunch of CR2/E145 flying.

DL Connection could order some CRJ550 planes if it needs a 2-class regional jet with fewer than 69 seats. DL could also upgauge some of the routes currently operated on regional jets that can support mainline service to the A220, 717, or A319.

Delta is scoped out, they cannot add any more regional jets, without parking something they already operate.

There is no such thing as ordering a 550, it’s s conversion of an already existing CRJ700.

caflyboy wrote:

Thanks for that. Yes, OO is the main "opportunity" as they have the relationship and are already doing at risk flying. Just wondering about the second point. Does at risk ever "up gauge" or "up grade" to where the Mainline controls it as regional flying? I am just not aware of any at-risk flying that was then converted to be included into contractual flying. Can at-risk flying be done like this, to open a route, generate demand and convert to contractual flying? Thanks for the feed-back

It does happen, SUN is a market that was converted from OO prorate to a contract market a few years ago.

The CR2 is the only plane OO can use for prorate operations. Someone mentioned once that the DL pilot contract specifies the number of lines of CR2 flying that are allowed, rather than the number of planes allowed on property, as it does with the larger planes. That is how OO is able to run such a large prorate operation in DL colors. (edit to add: OO hasn't added many DL prorate markets recently, maybe there is a limit?)

I think there is a weight limit for the 50 seaters, not sure if the CRJ 550 fits under it. Chip did say the 550 is "interesting" on an earnings call awhile back.

A market development guy told me once the prorate flights have to touch a hub. Not sure if a focus city would qualify?

oosnowrat wrote:

caflyboy wrote:

Thanks for that. Yes, OO is the main "opportunity" as they have the relationship and are already doing at risk flying. Just wondering about the second point. Does at risk ever "up gauge" or "up grade" to where the Mainline controls it as regional flying? I am just not aware of any at-risk flying that was then converted to be included into contractual flying. Can at-risk flying be done like this, to open a route, generate demand and convert to contractual flying? Thanks for the feed-back

It does happen, SUN is a market that was converted from OO prorate to a contract market a few years ago.

The CR2 is the only plane OO can use for prorate operations. Someone mentioned once that the DL pilot contract specifies the number of lines of CR2 flying that are allowed, rather than the number of planes allowed on property, as it does with the larger planes. That is how OO is able to run such a large prorate operation in DL colors. (edit to add: OO hasn't added many DL prorate markets recently, maybe there is a limit?)

I think there is a weight limit for the 50 seaters, not sure if the CRJ 550 fits under it. Chip did say the 550 is "interesting" on an earnings call awhile back.

A market development guy told me once the prorate flights have to touch a hub. Not sure if a focus city would qualify?

My understanding is that the Delta pilot contract is maxed out for pro rate flying. So, for anything new to be added, something else would have to go away.

Thanks for the responses, it's becoming clearer.

jplatts wrote:

caflyboy wrote:

I know there are also smaller hubs (BOS/SEA) where there could be some additional flying, but gates are an issue.

There are some more nonstop routes that could be added by DL out of BOS, LAX, and SEA, including the following:
BOS-BWI/CLT/DFW/DEN/IAH/SDF/STL/SAN/SAT
LAX-ORD/CLE/IAH/MKE/OKC/PHL/PIT/RNO/STL
SEA-CLE/DFW/IAH/PHL/STL/SAT

There are some pretty L O N G domestic flights in your list. While I do expect that many of these adds will happen on DL, in terms of aircraft the A220 is preferable to anything OO could offer, including the E-jets, IMO. I do understand that A220 is DL mainline not DL Connection and as such is not at risk flying, but whenever there is a choice, DL mainline wins my business every time.

Another thing to consider is some at risk flying is simply a result of selectively increasing the utilization of existing aircraft which would otherwise be non-flying.

I have flown Delta IAH-BOS, IAH-DFW, IAH-IAD.........well, in 727-100s and 200s......wow, I am getting old....

jrkmsp wrote:

oosnowrat wrote:

caflyboy wrote:

Thanks for that. Yes, OO is the main "opportunity" as they have the relationship and are already doing at risk flying. Just wondering about the second point. Does at risk ever "up gauge" or "up grade" to where the Mainline controls it as regional flying? I am just not aware of any at-risk flying that was then converted to be included into contractual flying. Can at-risk flying be done like this, to open a route, generate demand and convert to contractual flying? Thanks for the feed-back

It does happen, SUN is a market that was converted from OO prorate to a contract market a few years ago.

The CR2 is the only plane OO can use for prorate operations. Someone mentioned once that the DL pilot contract specifies the number of lines of CR2 flying that are allowed, rather than the number of planes allowed on property, as it does with the larger planes. That is how OO is able to run such a large prorate operation in DL colors. (edit to add: OO hasn't added many DL prorate markets recently, maybe there is a limit?)

I think there is a weight limit for the 50 seaters, not sure if the CRJ 550 fits under it. Chip did say the 550 is "interesting" on an earnings call awhile back.

A market development guy told me once the prorate flights have to touch a hub. Not sure if a focus city would qualify?

My understanding is that the Delta pilot contract is maxed out for pro rate flying. So, for anything new to be added, something else would have to go away.

Correct, pro-rate counts against the 50 seat scope limit of 125 lines of flying.

jplatts wrote:

caflyboy wrote:

For example, in BNA, could there be at-risk flying to business markets such as CVG/STL/LIT/IND.....?

The only reason why DL would need to serve markets such as CVG, STL, LIT, or IND nonstop from BNA is for O&D to and from BNA. If there isn't enough O&D to BNA from CVG, STL, LIT, or IND to warrant nonstop service, DL has no need to add BNA-CVG/STL/LIT/IND.

I think that's what the OP is getting at. I live in Nashville, which DL has obviously announced as a focus city. But at the moment, all of their service at BNA is to other hubs or focus cities (or whatever they're calling RDU this week). I think to most people the definition of a focus city includes flights to non-hub cities, so it's not unreasonable to ask if DL would consider adding flights in such a way. CVG and IND are about 4 hour drives from BNA; LIT and STL are more like 5, making all of them pretty difficult for business travelers to do in a day trip unless it's a relatively short lunch meeting. Flights from these cities could allow for same-day O&D and if DL happens to be able to route some connections through BNA as well, it would open up seats for higher-fare-paying O&D pax on routes like BNA-ATL.

Sorry if this is an ignorant question, but what is 'at-risk flying,' anyway?

How about IAH-ORD on CV880 or BOS-LGA on DC-10?

ChrisNH38 wrote:

Sorry if this is an ignorant question, but what is 'at-risk flying,' anyway?

It's another term for pro-rate flying. When the regional flies under the codeshare service as a partner of mailing, but is assuming more risk and is not passing through all the costs it does under its fee for departure arrangements. As one comment mentions, it usually utilizes aircraft that would otherwise be idle.

caflyboy wrote:

ChrisNH38 wrote:

Sorry if this is an ignorant question, but what is 'at-risk flying,' anyway?

It's another term for pro-rate flying. When the regional flies under the codeshare service as a partner of mailing, but is assuming more risk and is not passing through all the costs it does under its fee for departure arrangements. As one comment mentions, it usually utilizes aircraft that would otherwise be idle.

In other words, with pro-rate/at-risk flying, the regional operator takes on the operational expenses for a given flight, and the mainline carrier is given a share of the ticket sales — whereas with contract flying, the mainline carrier pays the regional operator a fixed amount per flight to cover the regional's operating costs.

Much of the at-risk flying that OO performs under the DL and UA banners are EAS routes.