Future of the Regionals - I am Calling It Here

[Draginass]

Horton is going for the whole enchilada against the American pilots. There's no negotiating going on. They've backstepped on pensions because the PBGC has put up a huge stink about Horton using pension money from last year to fund his huge $4 billion manufactured bk war chest. THAT is the ONLY reason why Horton has backtracked on throwing pensions on the taxpayer, despite the lies his minister of propaganda has spun publicly. Horton wants to be the Frank Lorenzo that actually "got it done." He's Frank ok, but still isn't going to get the "get it done" part.

Now the AA unions have filed for binding arbitration with the NMB. If approved and Horton says no, everyone goes into a 30 day cooling off period, then possibly self-help.

Horton and his minion enablers were hoping for a quick bum's rush cram-down with the unions. They've fatally miscalculated and are now in a stall and entering into a proverbial spin.

Unless there is a radical change of corporate management and culture, things do not bode well for AA.

 

[Jetjockey]

Horton is going for the whole enchilada against the American pilots. There's no negotiating going on. They've backstepped on pensions because the PBGC has put up a huge stink about Horton using pension money from last year to fund his huge $4 billion manufactured bk war chest. THAT is the ONLY reason why Horton has backtracked on throwing pensions on the taxpayer, despite the lies his minister of propaganda has spun publicly. Horton wants to be the Frank Lorenzo that actually "got it done." He's Frank ok, but still isn't going to get the "get it done" part.

Now the AA unions have filed for binding arbitration with the NMB. If approved and Horton says no, everyone goes into a 30 day cooling off period, then possibly self-help.

Horton and his minion enablers were hoping for a quick bum's rush cram-down with the unions. They've fatally miscalculated and are now in a stall and entering into a proverbial spin.

Unless there is a radical change of corporate management and culture, things do not bode well for AA.

Sounds like a Mexican stand-off. Management, labor and the government. Everyone is tired of taking it in the shorts.

 

[Draginass]

Except management has been getting rich off AA while they've been underfunding pensions and running the airline into the ground.

 

[scoreboardII]

My bet is pilots will be pilots and vote to keep the higher pay by giving up on scope as it doesn't effect the seniority and expose the young to doom, furloughs and pestilence continuing the eat our young mentality.

 

[jynxyjericho]

My bet is pilots will be pilots and vote to keep the higher pay by giving up on scope as it doesn't effect the seniority and expose the young to doom, furloughs and pestilence continuing the eat our young mentality.

You are forgetting to add, "and blame the young for their own actions and incompetence".

 

[jayme]

I kind-of like how Obama's PBGC told AA mgmt to pound sand. Does anybody still really believe all politicians are all the same?

 

[skywdriver]

The Writing's In The Sky & At The Fuel Pump:
The Regional Airline Era Is Long GoneIt makes no real difference how much labor will give in concessions. It really makes little difference how much more - if any - a major airline can be cajoled in to paying more for lift. It makes almost no difference how much slack can be won from lenders. The facts are clear:The "regional airline industry" (a misnomer) is in massive, fundamental, and permanent decline. The reason is simple and cannot be danced around any longer: the services they generally provide - leasing small units of capacity to large airlines - have a declining market need, and deteriorating market economics.It has to do mainly with changing airline operating economics. Fifty-seat jets, once highly contributive to major airline revenue streams, have been relegated to a much smaller market need than five, and ten years ago.Back in 1999, Boyd Group International cautioned its supplier clients that there was a limit to the number of small jets the airline industry could absorb, and the number in operation, on order and on option at that time far exceeded what the US industry could really operate profitably. That was not received well, but our unit forecasts for these aircraft have proven far more accurate than any others at that time, particularly those done by big chop-shop consulting firms who, on an ethical level, are in the business of competing directly with the young ladies who hang out on the corner in front of a 'Vegas casino.In 2003, we forecast an immediate glut on the market of these smaller jets. Again, that was certainly not what some lightweights in the financial industry were babbling about. "Regionals" were making money, they told us, and they had a model that major carriers should emulate. Which is as stupid as telling General Motors that its radiator supplier was profitable, so it should go into the radiator business instead of building cars. Some of the last people to listen to regarding the airline industry are these financial-house garbage can gurus who think that because they buy airline tickets occasionally, they are experts on the industry.Going forward, the US airline industry simply cannot afford to support the number of 50-seaters still in operation - regardless. The costs are going up, both in fuel and in maintenance, and therefore the number of viable mission applications are disappearing rapidly.Wake Up & Smell The Reality. It's not like rocket science or magic - the trends are there, right in the open. We saw Mesa file Chapter 11. We've had Pinnacle file Chapter 11. We have American Eagle desperately trying to convince itself that it can spin off from AMR into to some wondrous world where lots of major carriers will be hankerin' to lease-in more 37-50 seat jets. ExpressJet was acquired by SkyWest. And even SkyWest - one of the best-managed companies in US industry - has now reported losses.The facts are clear: While there will continue to be a role for small lift providers ("regional airlines"), skyrocketing fuel costs and increasing maintenance on out-of-production RJs point to continued shrinking of this sector.Yes, it's not real pleasant. But it is reality. And avoiding reality can come with a very big bill later on.

 

[cynic]

I guess you forgot that very few people are starting piloting careers these days (too expensive for many), and that there will be a shortage eventually. People are still flying more per year, but huge retirements are just a few years away. That is called eventual leverage.

I agree completely that there is a looming shortage of pilots. What you guys fail to comprehend (and I don't understand why) is that there is not necessarily a realtionship between wages and demand.

In the future there will be a demand for pilots willing to work long hours for low pay and no job security or retirement.

Wages will continue to fall.

 

[outerlimits]

My bet is pilots will be pilots and vote to keep the higher pay by giving up on scope as it doesn't effect the seniority and expose the young to doom, furloughs and pestilence continuing the eat our young mentality.

A very accurate statement .

 

[scoreboardII]

And when the RJ companies fail, they will then be used as new "cheap labor/cheap/equity" through bankruptcy laws. RJ's will be back.