Are regional airlines headed for a tumble?

[labbats]

Interesting article in today's issue of USA Today.

By Barbara De Lollis, USA TODAY
The launch of low-cost carrier Independence Air next week could signal the beginning of the end of what has been a golden era for regional airlines. For the past five years, small carriers like the owners of Independence Air have prospered as the industry's bigger players have flirted with collapse.

http://www.usatoday.com/travel/news/2004-06-09-regional-airlines_x.htm

 

[bvt1151]

Interesting...

It seems regional carriers have reached critical mass in their current roles. The 50-seat market, although large, is nearing capacity. The battlefield now is the 70-100 seat market. If regionals continue to be successful in obtaining those airframes, the regionals will continue to grow. If the regionals are allowed to grow independent of their mother carrier's scope clauses, regionals will continue to grow, and may very well eclipse the major carriers. However, the only thing that is limiting regionals continued growth, is the mainline pilot's scope clause. So far that scope clause has proven unpenetrable, but with the alter ego airlines such as Republic and Freedom acquiring airframes that would obviously violate the scope clauses otherwise are showing the weaknesses in the clauses. Skyway now looks to operate under the Delta banner, which should violate the scope clause, but nobody seems to be concerned. If all it takes to get around the scope clause is to obtain a different operating certificate, irregardless of which holding company owns it, where do I apply?

 

[777_Jackpot]

Independence

Will Indepencence be in direct competition with Southwest and Jetblue? If so will Indenpendence be able to compete with them in light of the fact that their CASM's are less then Independence's RJ's CASM's will be.


777JP

 

[FN FAL]

However, the only thing that is limiting regionals continued growth, is the mainline pilot's scope clause

not necessarily...there are only so many runways, only so many departure slots and arrival slots. Dividing all of commercial aviation's passengers by 50, will mean traffic jams. Traffic jams cost operators money. There is a limit to how many small jets can fly the system and it aint ALL about scope clause. Over capacity can also spell doom, in having too much competition.

 

[bvt1151]

Airspace limitations are an equal limit to both mainline and regional aircraft. A blip on the radar is a blip on the radar. If anything the majors have the disadvantage here due to heavy spacing requirements.
Besides, the RJ finds its true forte by overflying the busy hubs, hence less traffic. Something Mr. Boyd fails to realize.

Remember that CASM's are only half the measure of profitability. RJ's have the point to point ability to produce extraordinary RASM's. As long as Independence doesn't confine themselves to a traditional hub and spoke model in IAD they should do great.

 

[80drvr]

Interesting...

It seems regional carriers have reached critical mass in their current roles. The 50-seat market, although large, is nearing capacity. The battlefield now is the 70-100 seat market. If regionals continue to be successful in obtaining those airframes, the regionals will continue to grow. If the regionals are allowed to grow independent of their mother carrier's scope clauses, regionals will continue to grow, and may very well eclipse the major carriers. However, the only thing that is limiting regionals continued growth, is the mainline pilot's scope clause. So far that scope clause has proven unpenetrable, but with the alter ego airlines such as Republic and Freedom acquiring airframes that would obviously violate the scope clauses otherwise are showing the weaknesses in the clauses. Skyway now looks to operate under the Delta banner, which should violate the scope clause, but nobody seems to be concerned. If all it takes to get around the scope clause is to obtain a different operating certificate, irregardless of which holding company owns it, where do I apply?

So, what you're saying is that you'll fly new 100 seat mainline narrow bodies for less than current market wages if someone figures out how to circumvent mainline CBA's to give you that opportunity.

 

[bvt1151]

So, what you're saying is that you'll fly new 100 seat mainline narrow bodies for less than current market wages if someone figures out how to circumvent mainline CBA's to give you that opportunity.

Just illustrating the hypocrisy of the scope clauses...

My post has nothing to do with pilots, but are rather written from the viewpoint of airline analysts and managements.

Lets try to prevent the flamebait on this thread...for once.

 

[FN FAL]

So, what you're saying is that you'll fly new 100 seat mainline narrow bodies for less than current market wages if someone figures out how to circumvent mainline CBA's to give you that opportunity.

Yea, it will be funny when the future comes and everybody is flying regionals at delivery truck driver wages...and every commercial airplane is a regional jet.

Airspace limitations are an equal limit to both mainline and regional aircraft. A blip on the radar is a blip on the radar. If anything the majors have the disadvantage here due to heavy spacing requirements.
Besides, the RJ finds its true forte by overflying the busy hubs, hence less traffic. Something Mr. Boyd fails to realize.

That's hogwash. Two regional jets take up more space than a DC-9 or Airbus on the ground and in the air. You must be using the same math that newhire at air willy was using to convince himself and me, that the 7 to 8 year upgrade time management told him at his interview, was really two to three years.

 

[Ganja60Heavy]

Scope clauses will soon be irrelevant because:

whereas:

1) The new growth will be in the 70-100 seat range, and

2) The mainline pilots demand too much money to fly them

--then--

1) Either wholly-owned or contract regionals bust the lid off scope airframe limitations, or

2) Independent "regionals" become the new LCC front to kill off the legacy carriers.


.....SWA did it with 737's, now others can do it with 70's or 90's.

You may disagree with me, but if you do, you're wrong! <--(Boy, don't I sound like an arrogant mainliner?!)

 

[General Lee]

Bvt1151,

With the lower fares floating around out there, it makes more sense to use larger aircraft with more seats to spread out the costs. Also, look at the ORD traffic situation. You can bet that both UAL and AA cut RJ flights instead of mainline flights when they both had to cut 7.5% of their scheduled departures at those peak times. Why? They could make more money with larger aircraft.

You also like to bash scope clauses. Without them, we would have many many more lower paying jobs, and no chance to eventually move up to a better working environment with better perks. But, if you want all of that to go away, just wish for Comair 100 seaters instead of Delta 100 seaters. Talk about lowering the bar-----you seem to want that too. Dalpa would have to come down on pay scales for future 100 seaters---but a lot of other things would remain in tact--leaving a chance for other pilots to eventually have those perks. But, you would rather bring the 100 seaters down to the regional level. Let's move people up.....

And, I believe Skyway has a seperate operating certificate compared to Midwest. Those pilots at Skyway probably won't be flying any 70 seaters or larger in the near future---but Dorniers are a distinct possibility...


Ganja,

Dalpa will do whatever they can to keep the 100 seaters, even $crewing the junior guys to get them---ie lower pay. It happened with Delta Express and the 737-200s. Sorry.


Bye Bye--General Lee