Is there any chance you guys could list me some pros and cons of airlines getting rid of their regional subsidiaries and going all mainline?

It seems to be a bit of a hot topic with Endeavor possibly folding into Delta, and I would like to fully understand what’s on the table for airlines.

Pros and cons for whom? Airlines, pilots/employees or customers?

As a passenger I despise flying on so-called "regionals" and avoid them when possible. I know their pilots are underpaid, overworked and less experienced compared to their "mainline" peers, the airplanes themselves are generally less comfortable and I can't stand having to wait in the jetway for 10 minutes for my "carry-on" bag to be retrieved from the hold particularly when I have a tight connection. The only benefit RJs and turboprops provide to passengers is the fact that certain airports wouldn't have airline service at all were it not for the existence of these smaller airplanes, but that goes more to the size of the airplane itself rather than the industry practice of operating them through a "regional" subsidiary or contractor.

From a pilot's perspective, "regional" airlines almost always serve as stepping stones in one's career although during periods of high movement (such as the past 5-10 years) it is possible to gain seniority so quickly at a regional that some pilots do choose to stay for the sake of having better quality of life especially since the pay has gotten a lot better over the past 10 years. As a general rule, though, most pilots are chasing the big bucks and are therefore trying to get hired at a mainline (or FedEx or UPS, the "mainlines" of the cargo world) as soon as possible. Eliminating the whole "regional" system would be a benefit to most pilots since they would be hired at a mainline carrier earlier in their careers rather than having to start at the bottom of the seniority list again upon being hired by one of the coveted mainlines.

As far as the company side goes, the whole reason for the "regional" system as it exists today is cost. Even if the equipment used is the same, it is far cheaper to pay a "regional" pilot to fly an RJ than a mainline one. Aside from the raw pay differences, mainline carriers typically offer far better fringe benefits in the form of health insurance, 401(k) contributions/matching, travel benefits, etc. To be fair the pilots themselves are complicit in this, as during contract negotiations one of the major subjects discussed is what's called the "scope clause". The scope clause, in the legal sense, spells out what flying is actually covered by a particular CBA. At mainline airlines, most scope clauses state that the pilots' CBA only covers flying in airplanes with greater than 50-75 seats which is why mainline carriers are able to contract out RJ flying to the "regionals". The reason I say pilots are complicit is because, when negotiations are being conducted, most mainline pilot groups are happy to accept pay raises or other perks in exchance for the maintenance (or sometimes broadening) of these "RJ exceptions" in their scope clauses. They're already in, so why do they care about anyone else? The downside of this system, from the company's perspective, is control. When an airline contracts out flying to a "regional" it loses some authority over that flying which may or may not be an acceptable trade-off from a business perspective. Regional airlines are in charge of their own pilot hiring/training, maintenance and other operational functions and while their "mainline" customers certainly audit them (as does the FAA just like any other airline) they cannot control those processes as closely. This is a big reason why, IMO, WN has never used the "regional" model to serve smaller destinations. For that company and its business model to succeed, it must maintain a tight control over its unique processes which would be impossible to do if some of their flying were performed by "regionals".

People make the argument of mainline pay when it comes to mainlines operating RJs. I believe that to be true to an extent once you factor in things like benefits, 401k, bonuses, etc... But the pay itself can still be dictated by a lower pay for the aircraft than that of an A320 or 777. The RJs would just be a new pay scale at the low end of the overall scale. Are the benefits and bonuses that offsetting to the mainlines operating their RJs in-house?

If they used the weight/speed formula for RJs, it’d be a significant pay cut

Everyone seems to focus on the pilot cost savings for regional operations. Wages and benefits for all the employees at a regional are a huge cut from mainline. Many times the above and below wing gate crew is 100% contract with minimal benefits and close to min wage. Cabin crew and maintenance are usually company employees, but again with lower wage and benefits than mainline.

Flight hour pay cost is really minimal in the grand scheme of things because these are often short flights. So let's say a pilot earns $95 an hour at Acme Regional Airlines, but that same pilot flying for BigMainliner is paid $150 an hour. The flight is blocked in at 1.5 hours so the difference in pay is marginal on a dollar basis. (I am going to assume both pilots earn the same amount just for ease of math, in reality both pilots would be earning different amounts)

Acme Regional wages for this 1.5 hour flight: $285
BigMainliner: $450

A difference of $165, it's really not going to break the bank, but extrapolated over a large number of flights sure it can add up to a significant difference. The real cost is the "cost inertia" of bringing in the larger operation to support these pilots and airplanes. These airplanes are operated by mainline pilots, so mainline flight attendants are going to want to be on board, and mainline mechanics are going to want to turn wrenches on them. Mainline dispatchers are going to have to dispatch them. At every department that means an increase of jobs, which are by and large paid more than the regional. Those increase of jobs in all of those departments mean more supervisors and more managers, which also cost more than the regional. Mainline pilots and flight attendants have better work rules so some of these grueling days the regional can get away with, won't happen at the mainline carrier. So it might take 1.25 pilots for every 1 regional pilot to fly the same number of flights. More jobs, and so on. Mainline pilots and flight attendants have stricter standards for hotel stays. AcmeRegional may be okay with a budget hotel close to the airport, while BigMainliner wants a better hotel closer to downtown amenities, etc. All of these factors drive a higher indirect cost which BigMainliner is happy to pawn off on AcmeRegional.

jetmatt777 wrote:

Flight hour pay cost is really minimal in the grand scheme of things because these are often short flights. So let's say a pilot earns $95 an hour at Acme Regional Airlines, but that same pilot flying for BigMainliner is paid $150 an hour. The flight is blocked in at 1.5 hours so the difference in pay is marginal on a dollar basis. (I am going to assume both pilots earn the same amount just for ease of math, in reality both pilots would be earning different amounts)

Acme Regional wages for this 1.5 hour flight: $285
BigMainliner: $450

A difference of $165, it's really not going to break the bank, but extrapolated over a large number of flights sure it can add up to a significant difference. The real cost is the "cost inertia" of bringing in the larger operation to support these pilots and airplanes. These airplanes are operated by mainline pilots, so mainline flight attendants are going to want to be on board, and mainline mechanics are going to want to turn wrenches on them. Mainline dispatchers are going to have to dispatch them. At every department that means an increase of jobs, which are by and large paid more than the regional. Those increase of jobs in all of those departments mean more supervisors and more managers, which also cost more than the regional. Mainline pilots and flight attendants have better work rules so some of these grueling days the regional can get away with, won't happen at the mainline carrier. So it might take 1.25 pilots for every 1 regional pilot to fly the same number of flights. More jobs, and so on. Mainline pilots and flight attendants have stricter standards for hotel stays. AcmeRegional may be okay with a budget hotel close to the airport, while BigMainliner wants a better hotel closer to downtown amenities, etc. All of these factors drive a higher indirect cost which BigMainliner is happy to pawn off on AcmeRegional.

I enjoyed your summary - thank you for taking the time to write it.

There are downsides to using the regional airlines, too. Remember the Colgan/CO Connection 3407 accident near BUF? Before Congress, CO CEO Jeff Smisek tried to lay the responsibility on the FAA; it was their task to ensure safety. Yet, CO was held liable and financially responsible.

Another would be the notorious Dr. Dao incident at UA. You may recall that it was a Republic crew that arrived late at ORD and displaced passengers on the incident flight. This in turn, created the necessity to deplane passengers from the UA-Express flight so that the crew could deadhead to their layover prior to their flight the next day. Yet it was the United name and brand that took such a beating. That is, you can outsource the flying, but you can't outsource the liability and responsibility.

jetmatt777 wrote:

Flight hour pay cost is really minimal in the grand scheme of things because these are often short flights. So let's say a pilot earns $95 an hour at Acme Regional Airlines, but that same pilot flying for BigMainliner is paid $150 an hour. The flight is blocked in at 1.5 hours so the difference in pay is marginal on a dollar basis. (I am going to assume both pilots earn the same amount just for ease of math, in reality both pilots would be earning different amounts)

Acme Regional wages for this 1.5 hour flight: $285
BigMainliner: $450

A difference of $165, it's really not going to break the bank, but extrapolated over a large number of flights sure it can add up to a significant difference. The real cost is the "cost inertia" of bringing in the larger operation to support these pilots and airplanes. These airplanes are operated by mainline pilots, so mainline flight attendants are going to want to be on board, and mainline mechanics are going to want to turn wrenches on them. Mainline dispatchers are going to have to dispatch them. At every department that means an increase of jobs, which are by and large paid more than the regional. Those increase of jobs in all of those departments mean more supervisors and more managers, which also cost more than the regional. Mainline pilots and flight attendants have better work rules so some of these grueling days the regional can get away with, won't happen at the mainline carrier. So it might take 1.25 pilots for every 1 regional pilot to fly the same number of flights. More jobs, and so on. Mainline pilots and flight attendants have stricter standards for hotel stays. AcmeRegional may be okay with a budget hotel close to the airport, while BigMainliner wants a better hotel closer to downtown amenities, etc. All of these factors drive a higher indirect cost which BigMainliner is happy to pawn off on AcmeRegional.

$165 for a 50-seater with 40 pax (80% LF) is $4 per leg per pax. I had few round trips of 4 regional legs, so $16 per ticket difference for flight crew payroll. Say another $5 for FA, something else for gate agent and below the wing guys; not sure if office and maintenance scale factors are the same.
But even just flight crew different rates can make a non-negligible difference in ticket price, which will show up when tickets are ordered by price in expedia search.

KLM Cityhopper used to be various regional independent subsidiaries before its current form. As it is today they operates pretty much as a feeder to the mainline. Pro from that would be that they can streamline transfers/connections for baggage and pax handling. Con would be that KLC do not sell seats or tickets, its merely an operator and all sales are centralised through the mainline parent company.

Velocirapture wrote:

You may recall that it was a Republic crew that arrived late at ORD and displaced passengers on the incident flight.

Yet it was the United name and brand that took such a beating.

It was because of this association between mainline carriers and their regional affiliates that in the early days of the regional/mainline cooperative (approximately 1980s), Delta Air Lines required its regionals to maintain their own corporate identity and aircraft color scheme. The ideas was that if there occurred an accident or incident with the regional carrier, the general public would be less likely to associate that event with the mainline company.

As such, even though the regional flights were marketed and sold as a Delta Connection flight (with a DL flight number), the aircraft were not painted in Delta colors but maintained the paint scheme of the operating carrier.

As I recall--not 100 percent certain--but the affiliates at Delta's major hubs (1980s) were:

Atlanta: Atlantic Southeast Airlines (ASA).
DFW: Rio Airways (until 1986); later ASA.
CVG: Comair.
SLC and LAX: Skywest (following merger with Western)
NE (BOS and NY): Business Express

During that time period, I traveled Delta periodically through the DFW hub to various military bases, served through Lawton, Wichita Falls, Abilene, Killeen, etc. and the regional aircraft were always painted Rio and/or ASA. Obviously the requirement was eventually dropped, but having a single identity may be an illustration of a "CON" of blending the identity of the mainline and regional brand when an unfavorable incident occurs at the regional.

e38