Regional airlines are doomed!

[Fubijaakr]

I've been here 22 and have watched the results of management attempting to cater to the whims of the general public. If you give children everything they want you end up with spoiled brats. The same holds true with the flying public. Look what we've given them so far:

1. Deregulation. As a result, airlines have lost more money in the last thirty years than ANY OTHER INDUSTRY.

2. Passenger Bill of Rights. Now, instead of getting people to their destinations in spite of weather delays, they get cancelled flights at the 2.5 hour mark.

3. EAS. The government spends huge amounts of money so places like Escanaba, MI can have air service. It doesn't matter that the planes fly back and forth empty. EAS does have a place where communities are isolated, but you can drive from Escanaba to Milwaukee.

But, by all means, lets give the public everything they want, even if it is economically and/or physically impracticable.

Yeah, that's it. And what do we get in return? A bunch of spoiled brats who treat our employees poorly when there is any kind of glitch in the system or, God forbid, you ask them to turn their cell phone off when you want to close the aircraft door.

Herb Kelleher nailed it. The customer isn't always right.

However, I understand your need, as an RJ CA, to defend an economically unviable system.

 

[COOPERVANE]

I've been here 22 and have watched the results of management attempting to cater to the whims of the general public. If you give children everything they want you end up with spoiled brats. The same holds true with the flying public. Look what we've given them so far:

1. Deregulation. As a result, airlines have lost more money in the last thirty years than ANY OTHER INDUSTRY.

2. Passenger Bill of Rights. Now, instead of getting people to their destinations in spite of weather delays, they get cancelled flights at the 2.5 hour mark.

3. EAS. The government spends huge amounts of money so places like Escanaba, MI can have air service. It doesn't matter that the planes fly back and forth empty. EAS does have a place where communities are isolated, but you can drive from Escanaba to Milwaukee.

But, by all means, lets give the public everything they want, even if it is economically and/or physically impracticable.

Yeah, that's it. And what do we get in return? A bunch of spoiled brats who treat our employees poorly when there is any kind of glitch in the system or, God forbid, you ask them to turn their cell phone off when you want to close the aircraft door.

Herb Kelleher nailed it. The customer isn't always right.

However, I understand your need, as an RJ CA, to defend an economically unviable system.

Post of the year!!!

 

[Flyguy1226]

Blah Blah Blah... An article like this comes out every 3-4 months... What else is new?

 

[greed]

As long as all levels of the airline structure continue to sell tickets at prices so low that they are operating on a shoestring budget, the whole industry sector is in trouble. Why is it a ticket used to cost more 15 years ago then now? Did I miss reverse inflation? Airlines just need to charge what it really cost to operate, unfortunately the one airline that continues to whore itself out will get all of the passengers.

Sorry, it has been a long week and it is only Tuesday!

 

[DoinTime]

They can adjust...or they can drive to SLC. Give 'em an early morning A320/737 and an early afternoon one. Then they can connect to get to where they're going. A noon inbound and and evening inbound RONing the airplane there for the morning launch.

Dump the six or eight roundtrip RJs.

People are flexible...when they're required to be.

What you are missing out on is the fact that airlines will compete with each other for the high dollar passengers. The whole reason the RJ became popular is the undeniable fact that high yield business customers LOVE frequency more than they love a bigger plane. If Delta pulled service in Boise back to two flights a day in large equipment and United maintained 5+ on small planes, United will get the business travelers and Delta will get the worthless leisure types. Unless you have the cost structure of Southwest, you will not make money solely on leisure traffic.

If the government socialized (or at least re-regulated) air transportation and travelers did not have a choice, your plan would work. I kinda think thats never going to happen though.

 

[nerjdriver]

U.S. regional carriers must find a new business model to survive

Aviation Week and Space Technology February 13, 2012

There are worrying signals that a significant part of the airline industry could implode in the coming months, and despite the doom and gloom predictions from Europe this horror is occurring on the other side of the Atlantic.

U.S. regional airlines have always been perceived as tertiary to the majors and low-cost carriers that are household names across large swathes of the country. But despite the low-key brand awareness, most U.S. passengers have a first-hand experience of regionals as legacy carriers are becoming increasingly reliant on these smaller operators for feed.

Those feeder contracts used to be lucrative, with the majors assuming most of the risk while providing near-double-digit margins for a slew of companies. Indeed, these contracts were so healthy that regional airlines at times came to the financial aid of those same majors.

But those days are long gone, as mainline operators rein in costs, restructure the loosely written capacity purchase agreements and stringently enforce every condition of the new contracts.

The effect of these changes has been devastating. Mesa Air Group (above), a leading force in the growth of 50-seat jet feed in the early part of this century, is a shadow of its former self, having shed most of its fleet during a Chapter 11 protection proceeding that saw it emerge last year as a privately owned company with just a handful of contracts.

ExpressJet has disappeared completely after rewritten contracts by then-owner Continental Airlines eventually forced a sale to SkyWest, itself a stalwart of fiscal sobriety that is now posting consecutive quarterly losses because of that very acquisition. Elsewhere, Pinnacle Airlines' future is bleak after recently noting that just two of its contracts—both with Delta Air Lines—are viable, and Republic Airways' journey into mainline branded operations has traveled almost full circle as it attempts to offload Frontier Airlines. Worryingly, Republic last week also promoted its relationship with AMR Corp., which only entered Chapter 11 on Nov. 29, 2011, as its saving grace.

The viability of privately owned Trans States Holdings and Air Wisconsin is less known, although chatter from within indicates all is not well at either carrier, and while US Airways' patronage of Air Wisconsin means the feeder will shift capacity from New York LaGuardia to Washington Reagan National Airport, it came at the expense of the Arizona-based major's own regional subsidiary, Piedmont Airlines.

Piedmont's distress is mirrored at other wholly owned feeders, with Delta's Comair perpetually for sale and AMR's American Eagle Airlines operation under review and likely dependent on a combination of new scope clauses and drastic cuts in fleet costs.

And that is the crux of this sector's problem—the regionals' only option is to ask suppliers to share their pain.

Now this is nothing new to the airline industry and the majors have asked the same from their suppliers, which included the regionals. But this bandage does little to stanch a systemic problem that plagues the regional airline industry. It simply cannot survive on the current business model.

And it will only get worse. While reduced aircraft payments will provide a timely reprieve for many operators, there are other issues that need to be resolved, many of which were summarized in an internal memorandum posted earlier this month by Mesa Chairman/CEO Jonathan Ornstein.

In that message Ornstein warned that while his Chapter 11 reorganization eliminated some aircraft costs, the downsizing of the U.S. airline industry has produced a crew roster heavy in seniority but with a smaller fleet to spread that higher cost. Compounding this is an unexpected maintenance requirement for the airline's fleet of Bombardier CRJ900s that the launch customer thought was coming several years from now, and, according to Ornstein, new regulations that will increase fixed costs.

But the most telling part of that memo was Ornstein's insistence that he, like his peers, is signing contracts that will never make a profit simply to “live to fight another day.” This can only ensure that the regional industry is destined for failure.

Consolidation has been a byword for the global airline business model for years, but that will do little to help U.S. regionals, in fact it has contributed to their dilemma. Something deeper is required, but for now that solution is as absent as their profits.

We can all thank Chip and SkyWest Inc for this. TFAYD!

 

[nimtz]

Not complicated at all.

Shrinking Margins+Increasing Costs+High Competition= Broken Model

Even if AMR unzips the scope fly it will be a contest of who will low ball the other for scraps. Not to hard to see why that comfy modern jet left seat isn't the final career stop.

 

[xjhawk]

Very misinformed. AMR "WILL" most certainly see scope relaxed.

Judges do not usually SET precedence, they look at other rulings and make similar rulings. That being said, take a look at NWA and Delta's rulings during bankruptcy and see how they faired. Next thing you should do is look at current scope at US Airways, United, and dare I say continentals scope language and see where that is. There may be some relaxation on scope, but not a dumping.

At least this is what I hope.

 

[On Your Six]

Very misinformed. AMR "WILL" most certainly see scope relaxed.

The rest of the healthier legacies will have stronger scope. Profits don't allow for scope concessions.


Godspeed!


The OYSter

 

[BOX OFFICE]

They can adjust...or they can drive to SLC. Give 'em an early morning A320/737 and an early afternoon one. Then they can connect to get to where they're going. A noon inbound and and evening inbound RONing the airplane there for the morning launch.

Dump the six or eight roundtrip RJs.

People are flexible...when they're required to be.

I've been here 22 and have watched the results of management attempting to cater to the whims of the general public. If you give children everything they want you end up with spoiled brats. The same holds true with the flying public. Look what we've given them so far:

1. Deregulation. As a result, airlines have lost more money in the last thirty years than ANY OTHER INDUSTRY.

2. Passenger Bill of Rights. Now, instead of getting people to their destinations in spite of weather delays, they get cancelled flights at the 2.5 hour mark.

3. EAS. The government spends huge amounts of money so places like Escanaba, MI can have air service. It doesn't matter that the planes fly back and forth empty. EAS does have a place where communities are isolated, but you can drive from Escanaba to Milwaukee.

But, by all means, lets give the public everything they want, even if it is economically and/or physically impracticable.

Yeah, that's it. And what do we get in return? A bunch of spoiled brats who treat our employees poorly when there is any kind of glitch in the system or, God forbid, you ask them to turn their cell phone off when you want to close the aircraft door.

Herb Kelleher nailed it. The customer isn't always right.

However, I understand your need, as an RJ CA, to defend an economically unviable system.

Pilots Know everything! Just ask them! Marketing, flying, engineering, route planning! All because they went to ERAU, the Harvard of Aviation! It's just so amazing! If you want to know what's wrong with the industry, just ask the pilots! ;-)