Follow along with the video below to see how to install our site as a web app on your home screen.
Note: This feature may not be available in some browsers.
88 717s will help cover on short haul routes for a lack of regional planes due to the shortage.
Bye Bye---General Lee
Is lakes really pulling seats out of 1900's?
1) Mainline increase pay to it's regional partners for their feed to hubs
2) Regionals increase FO starting pay to $40-50K & increase min days off to 14
Problem solved.
It only takes an increase of about $3-5 per ticket if you want to pass the cost on to the pax. Heave forbid that it comes out of profits for mainline to retain their regional feed.
There are only 88 717's going to Delta. They came from AirTran so the overall fleet has not increased. I can just see these guys doing ATL-RDU turns all day starting at $68/hr for FO's! Delta's minimum labor cost per hour is $241 on the 717's or $2.06 per seat. If we compare for comparison's sake - say, Compass. If Compass raised starting FO pay to $50/per hour with a guarantee of 75 hours/month. That's $45K. Go up $1 per year and top out at year 4 or 5. Their 1st yr CA & FO labor cost would be $115 or $1.51 per seat for a 76 seater. So, Compass (or any other regional with 76 seats) can raise FO pay and still provide that feed at a 27% savings in wages alone compared to mainline.
We'll see how important the regional feed is to mainline. Regionals, which are basically staffing companies, exist because they provided a cheaper alternative to mainline flying the same feed routes. There has to be a savings for the regional model to exist. But if you can't attract the thousands of currently qualified ATP's out there then the ability to provide the service shrinks. If there are fewer little planes to bring people to the big planes then what? The law of supply and demand would have it that the price goes up for the little planes or find an alternative method. Hmmm.....
Now what?
From a Businessweek article out today, entitled:
"With Pilot Shortage, Regional Airlines Search for Someone to Pay Rising Costs"
By Justin Bachman February 28, 2014
The last two paragraphs:
"Another regional airline, Great Lakes, is pulling 10 seats from its 19-seat Beechcraft turboprops so its pilots can qualify to fly under different federal rules. One of the more interesting tactics is a scheme by Delta to replace regional jets with larger planes, part of a deal it struck in its last pilot contract. Delta acquired 88 Boeing 717s fromSouthwest Airlines, even getting the seller to kick in $100 million for new paint and other refurbishments, which it now deploys on short-to-medium routes such as Huntsville, Ala., and Savannah, Ga.
"The confluence of events suggested to me that [Delta CEO] Richard Anderson was reading the tea leaves," Akins says. "He saw what was coming with the regionals."
Bye Bye---General Lee
Is lakes really pulling seats out of 1900's?
I like that last paragraph. He didn't read any tea leaves. He created the situation in which he has supposedly predicted. Good or bad.