The world according to Raymond James

[GogglesPisano]

Read it and weep ...

Change is the name of the game for Regional airline industry

Monday May 23, 2005
"It's a bit strange when Regionals start investing in bankrupt [legacy] airlines," said James Parker, MD of Raymond James & Associates.Air Wisconsin and Republic Airways agreed to invest more than $100 million apiece in US Airways, while Mesa Air Group agreed to invest $30 million in Delta Air Lines and assume its leases on some 30 328JETs previously operated by Atlantic Coast Airlines. Speaking at the RAA conference last week in Cincinnati, Parker said even more changes are in store for the industry.

As legacy carriers struggle financially, they will continue to outsource flying to Regional partners. At the same time, low-cost carriers will continue to force legacy airlines to move to larger regional aircraft such as the Embraer 170/190 family. The push toward such aircraft will increase after JetBlue introduces its first 190, Parker said.

There was talk among those attending the conference that Regionals may return to pro-rate agreements with their mainline partners. "You may see pro-rate again," Parker conceded, adding that declining ticket prices and revenues should be considered. "If I was a Regional airline, I wouldn't want to do any revenue-sharing today," he said.

He painted a gloomy picture for legacy carriers that he believes are controlled by labor. "Pilots get what they want and management is powerless," he said. "Pilots only make concessions in bankruptcy."

But as those airlines are pressed closer to the edge, more concessions will be made in scope clauses, he predicted. "You are going to see 90-seat aircraft and they will be operated by the Regionals."



by Sandra Arnoult

• View the May 23, 2005 issue of Daily News

 

[doh]

I don't think that is necessarily a boon. I think a lot of USAirways problems are that they had (have) too many structures in place. They can't get a handle on what their costs are because they have a bazillion different organizations all pulling in the direction they think will be good for them today. No one is looking long term and there is no common strategy. Adding more "partners too the mix only further clouds the picture and that seems to be the direction they all (legacy carriers) seem to want to move in.

 

[lowecur]

As legacy carriers struggle financially, they will continue to outsource flying to Regional partners. At the same time, low-cost carriers will continue to force legacy airlines to move to larger regional aircraft such as the Embraer 170/190 family. The push toward such aircraft will increase after JetBlue introduces its first 190, Parker said.

But as those airlines are pressed closer to the edge, more concessions will be made in scope clauses, he predicted. "You are going to see 90-seat aircraft and they will be operated by the Regionals."

Smart guy!

 

[Rogue5]

He painted a gloomy picture for legacy carriers that he believes are controlled by labor. "Pilots get what they want and management is powerless," he said. "Pilots only make concessions in bankruptcy."

I don't even know where to begin...

 

[FlyBoeingJets]

Read it and weep ...

Change is the name of the game for Regional airline industry

Monday May 23, 2005
"It's a bit strange when Regionals start investing in bankrupt [legacy] airlines," said James Parker, MD of Raymond James & Associates.Air Wisconsin and Republic Airways agreed to invest more than $100 million apiece in US Airways, while Mesa Air Group agreed to invest $30 million in Delta Air Lines and assume its leases on some 30 328JETs previously operated by Atlantic Coast Airlines. Speaking at the RAA conference last week in Cincinnati, Parker said even more changes are in store for the industry.

As legacy carriers struggle financially, they will continue to outsource flying to Regional partners. At the same time, low-cost carriers will continue to force legacy airlines to move to larger regional aircraft such as the Embraer 170/190 family. The push toward such aircraft will increase after JetBlue introduces its first 190, Parker said.

There was talk among those attending the conference that Regionals may return to pro-rate agreements with their mainline partners. "You may see pro-rate again," Parker conceded, adding that declining ticket prices and revenues should be considered. "If I was a Regional airline, I wouldn't want to do any revenue-sharing today," he said.

He painted a gloomy picture for legacy carriers that he believes are controlled by labor. "Pilots get what they want and management is powerless," he said. "Pilots only make concessions in bankruptcy."

But as those airlines are pressed closer to the edge, more concessions will be made in scope clauses, he predicted. "You are going to see 90-seat aircraft and they will be operated by the Regionals."



by Sandra Arnoult

• View the May 23, 2005 issue of Daily News

This guy is an idiot. Anyone could see a mile away how the regionals would be investing their money. They want to insure their revenue stream.

Labor controlling airlines?? He is just mad that this industry is skilled labor intensive. And, surprise, a company can get a labor cost advantage in BK court over another.

Anyone investing with this guy is really in trouble.

The only thought worth looking at is his assertion regionals may eventually fly 90 seaters. Good job Parker, you finally got the word that JetBlue is getting 190's.

 

[BFL370]

Mgt picks the Pilot that they want to hire to fly the aircraft. But Pilots dont pick the Mgt unless they nearly kill the company, so who is in control. Not us.

 

[JohnDoe]

quote:
"Pilots only make concessions in bankruptcy."



Really...?? Thats funny. If I'm not mistaken, Northwest, Delta, American, and Continental pilots all took concessions outside of bankruptcy over the last 4 years.

Yep, this guy sure knows his stuff..........