Why Republic will continue to destroy industry

[Minimaniac]

I have a lot of respect foor RAH. They have taken a lot of heat in the past for not being good enough, and now they're coast to coast with jets and two major airline acquisitions. Guess who will be the big dog this time next year?

The big dog next year will be the same as this year...Southwest. Delta will be strong, as well. The real threats to the major players are Spirit and Allegient, just wait and see.

You, crashpad, will not be working at any major player, or at RAH, next year. But better luck after you graduate!

 

[tweeter125]

Actually a bit of a difference. A few years back, RAH flew "for" F9. They didn't have their own airline to directly compete against UAL on their hometurf.

There is the difference..."Tweeter" now why don't you go back on "Twitter" where you belong.

OK I'll give you that but I still disagree.

BTW my nic has NOTHING to do with Twitter. Tweeter was a home and car audio company that is now gone.
Nice try though.

 

[XPOO]

The big dog next year will be the same as this year...Southwest. Delta will be strong, as well. The real threats to the major players are Spirit and Allegient, just wait and see.

You, crashpad, will not be working at any major player, or at RAH, next year. But better luck after you graduate!

Unless Allegiant does a serious fleet upgrade, I doubt it.

 

[WalterSobchak]

Unless Allegiant does a serious fleet upgrade, I doubt it.

That's just it, though...Allegiant owns their fleet outright. No lease payments, etc. That's a big factor in how they are profitable. They keep the books simple and don't buy things they can't afford.

You can liken it all to this credit mess so many are in right now. The Legacies are kinda like the irresponsible 20 year olds with high limit credit cards...it eventually comes back to bite them and the creditors start beating down the door. Allegiant is like the extremely financially responsible old man on the block. He never buys anything without paying cash for it...

 

[XPOO]

That's just it, though...Allegiant owns their fleet outright. No lease payments, etc. That's a big factor in how they are profitable. They keep the books simple and don't buy things they can't afford.

You can liken it all to this credit mess so many are in right now. The Legacies are kinda like the irresponsible 20 year olds with high limit credit cards...it eventually comes back to bite them and the creditors start beating down the door. Allegiant is like the extremely financially responsible old man on the block. He never buys anything without paying cash for it...

Running a complete fleet of aircraft, that by today's standard is old and obsolete, is only going to get them so far. Soon, they'll own any of those MDs worth flying and where will they get spare parts to keep them running? How expensive will the upkeep be vs. leases on a fleet of more manageable aircraft? Allegiant is well equipped for the herenow, but how's their 10 year outlook? Not too rosey at this point.

 

[nerjdriver]

OK I'll give you that but I still disagree.

BTW my nic has NOTHING to do with Twitter. Tweeter was a home and car audio company that is now gone.
Nice try though.

Sounds like you are a little insecure about this. Did it hit a little close to home?

 

[nerjdriver]

Yeah I can see that RAH is the only one in the spotlight now. But Its all of them really. I think even if RAH wasn't in the position they're in now, pay rates would still be going in the same general direction......down, down, and further down as every carrier continues to bid for flying contracts. What else would there be to do? There is no unity anymore, even within the individual groups themselves. Its just gone. Sad to see really, but true, no? This leads me to a inquire, does stuff like this not happen in other countries with their pilots too? Or is all this drama exclusively stateside?

I disagree. When the rev kicks the f9 pilots to the street and replaces them with mighty riddle diddles it will only get worse. The best is yet to come boys.

 

[Minimaniac]

I disagree. When the rev kicks the f9 pilots to the street and replaces them with mighty riddle diddles it will only get worse. The best is yet to come boys.

If it makes you feel any better, RAH is an Indiana based company, and has hired a large amount of Purdue grads. RAH also has an internship program with Purdue. In terms of "local talent", OSU and Southern Illinois grads often find employment at RAH. Riddle grads are a minority at RAH.

Also, the Rev can't kick F9 pilots to the streets. F9 pilots and RAH pilots can kick F9 pilots to the streets based on the outcome of integration (or lack thereof, opening up F9 pilots to the whims of the Rev and any fleet changes he may have in store).

 

[Minimaniac]

Yeah yeah, everyone cries about "who gave up scope". If all regional carriers remained in-house at the majors, none of that should matter. Remember the good ol' days when there was such a thing as "flow-through"? Scope didn't seem to matter any, because opportunities were abundant. Can you explain how all this scope stuff atomically blew out of proportion? The actual root cause? I sure as H*ll don't know, so I'm being fair and asking. Anyone really know? And please try not to speculate. If anything, it would at least be a great history lesson for myself.



By the way, I truly do not ever intend to offend anyone. If I have done so thus far, please accept my apology, I'm sorry.

Everything began unraveling with Deregulation in 1978. When airlines were forced to truly compete, the downward pressures of unregulated capitalism tore apart the industry. Fares went down, leading to a spiral of cost savings measures. Also, excessive competition into markets (6 airlines flying the same city pair) led to changes in business practices that were geared at strictly gaining market share from a competitor. Flight frequency increased, reducing loads on a particular flight. Frequent fliers were given the world. More gas was burned, and more airframes purchased. In the mid 90's, the threshold of profitability was crossed. There were too many flights, too many planes, and too many competitors. Just about that time, the RJ was born, fulfilling the need of keeping up a frequent schedule, but burning less overall gas and carrying less passengers. Props were getting older at this time too, and passengers still expected the world. They wanted a jet everywhere they went. Gas was still cheap. Here come the RJ's. The mainline unions, for reasons I don't know, decided to let these 50 and fewer seat jets be flown under contract by the regional airlines. At the time, they were given to the "best" regionals of the day : ComAir, Eagle, etc. Once the major airlines were satisfied the smaller outfits could operate the RJ's in an acceptable manner, they began offering jets to a wider range of regional operators. Contracts began small, but the effects of deregulation were really beginning to catch up to the major airlines. The economic faults began to appear before 9/11/01, but the actual stoppage of flight for a few weeks showed how weak every airline was. In times of desperation, more RJ flying was created and farmed out, and major airlines tried to trim fat anyway they could.

But, it all goes back to deregulation. Airlines historically have not been highly profitable ventures. The profit margins have averaged around 1-2%. Most every other industry would consider that a failure. A little downward pressure on air fares was all it took to erode this industry. Unions were put on the defensive, and soon the in-fighting began. Strikes produced scabs, dissent fractured ALPA, and regional vs. mainline ate away at unity from both sides.

But that is just my opinion.

 

[Minimaniac]

This leads me to a inquire, does stuff like this not happen in other countries with their pilots too? Or is all this drama exclusively stateside?

Generally, this is an American problem. Most every other nation pays there pilots extremely well relative to the economic conditions of that nation. Most other nations do not have large GA segments in aviation, and the availability of trained pilots is very small. Pilots are often recruited based on aptitude, and are compensated based on the small size of the skilled labor pool. In more industrialized nations (western europe, for example), strong unions have upheld the standard of living for pilots. Most nations have only a handful of airlines, of which only one or two compete internationally. Those pilots can truly shut down the nation's air service if mistreated, hence their high wages. Only in America do we have a glut of pilots, and that is only because of the excessive wealth we enjoy. Thousands of families a year send their kids off to college to be a pilot, despite the high training costs. Even with reward dwindling, Americans can afford to send their kids anyway.