AAG to Transfer Envoy CRJ-700s to PSA

Comair 100ER said:
Shutting down? Negative, ghost rider. Shrinking to ~118 erj-145s. Leases go til 2018.
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I sure hope not. They voted with the information that fit their situation (hey, have you seen that MEC / LEC blastmail that says the bigwigs took bonuses right before the concession talk?)... look, we had to vote the way we did, and Eagle/Envoy had to vote the way they did... @Cherokee_Cruiser conveniently forgets that right before standing their ground, Eagle/Envoy DID vote in a concessionary LOA. They're saying "no" to back to back concessions.

I also get that voting yes to Endeavor did affect the negotiating landscape. It's up to ALPA E&FA to figure out whether our ratified concessions or a judge imposed contract (if we were to be so lucky) would have been worse for the bargaining environment. @BobDDuck knows better than I do, as he has actually done ALPA negotiating. All I have to go on are road-shows and reading of contracts.
 
ZapBrannigan said:
If you don't have leverage when the company is making record profits and is on the cusp of a pilot shortage...when do you?
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I think the record profits thing has to be approached lightly in the regional sector. If they have the money and they want to accomplish something, even just to say I told you so to a certain extent, they will do it. IMO
 
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JustinS said:
I think he meant the mainlines that the regionals are feeding. It's really just one big pyramid scheme, and the regional airline pilots are toward the bottom of it...
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How is it a pyramid scheme exactly?

A pyramid scheme is defined as "an unsustainable business model that involves promising participants payment or services, primarily for enrolling other people into the scheme, rather than supplying any real investment or sale of or services to the public" (source: Wikipedia.)

The fact is, regional airlines exist as a legitimate business model, much in the same way a general contractor passes work down to subcontractors. Mainline will only continue to use regional subcontractors as long as it makes financial sense to do so.

Mainline carriers are bound to their customers, who vote for which airline will succeed using their wallets. Regional carriers are bound to their mainline partners, who vote for which airline will succeed with fee for departure contracts.

Given that most regional carriers have roughly similar fleets and pay the same for fuel, the only major cost variable which can be controlled is employee pay. This places regional carriers like Envoy at a serious disadvantage due to their very senior pilot group. Furthermore, most of the FFD carriers today are struggling with ever thinner margins, despite success at mainline. Finally, mainline carriers are consolidating their regional feeds by trading out smaller 50 seat jets for larger ones (but not one for one), so much of the shrinking we are seeing at the regional level is not really as worrisome to mainline as we may suppose. This is more true for AA/US because there will be even more consolidation due to the merger. When Envoy voted "no" they chose which airline mainline would be "rightsizing."
 
J Cole said:
How is it a pyramid scheme exactly?

A pyramid scheme is defined as "an unsustainable business model that involves promising participants payment or services, primarily for enrolling other people into the scheme, rather than supplying any real investment or sale of or services to the public" (source: Wikipedia.)

The fact is, regional airlines exist as a legitimate business model, much in the same way a general contractor passes work down to subcontractors. Mainline will only continue to use regional subcontractors as long as it makes financial sense to do so.

Mainline carriers are bound to their customers, who vote for which airline will succeed using their wallets. Regional carriers are bound to their mainline partners, who vote for which airline will succeed with fee for departure contracts.

Given that most regional carriers have roughly similar fleets and pay the same for fuel, the only major cost variable which can be controlled is employee pay. This places regional carriers like Envoy at a serious disadvantage due to their very senior pilot group. Furthermore, most of the FFD carriers today are struggling with ever thinner margins, despite success at mainline. Finally, mainline carriers are consolidating their regional feeds by trading out smaller 50 seat jets for larger ones (but not one for one), so much of the shrinking we are seeing at the regional level is not really as worrisome to mainline as we may suppose. This is more true for AA/US because there will be even more consolidation due to the merger. When Envoy voted "no" they chose which airline mainline would be "rightsizing."
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All good points. Of course FFD carriers are a legitimate business model. I think you took me too literally. It's not a scam by any means, but by pyramid scheme I simply meant those at the bottom are working for less to help the guys at the top make more. Really any business is a pyramid in a sense. People at the top make more convincing people working underneath them the person at the top should make as much as they do and convincing the people at the bottom they should make as much as they do. In this case you have a lot of regional airline crews working for peanuts to allow regional contracts to exist so cheaply. This allows the mainline airline corporations to turn over a larger revenue stream which further fattens the wallets of the ones higher up in the pyramid of jobs.
 
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JustinS said:
I think he meant the mainlines that the regionals are feeding. It's really just one big pyramid scheme, and the regional airline pilots are toward the bottom of it...
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Irrelevant. The vendors that I hire to work on the houses that I manage aren't entitled to my profits, only their own. If they can't do the work for a price I consider advantageous to my business, then I'll give the work to someone who can, or I'll bring the work in-house. They don't get a piece of my profit just because I have a lot of it and I'm such a swell guy.

The mainline carriers have decided that they aren't willing to pay any more for their feed. In fact, they think they're paying too much as it is. If you aren't willing to play ball with them, then they'll cast you aside and move on to someone who will. If no one will, then they'll have one Mad Dog replace three RJs.

Welcome to reality. Not quite what the Eagle Lounge and STW twits would have you believe.
 
ATN_Pilot said:
Irrelevant. The vendors that I hire to work on the houses that I manage aren't entitled to my profits, only their own. If they can't do the work for a price I consider advantageous to my business, then I'll give the work to someone who can, or I'll bring the work in-house. They don't get a piece of my profit just because I have a lot of it and I'm such a swell guy.
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True, but I'm sure all their rates are close to an industry standard. I think what regional pilots are seeking is a higher regional industry standard.

ATN_Pilot said:
The mainline carriers have decided that they aren't willing to pay any more for their feed. In fact, they think they're paying too much as it is. If you aren't willing to play ball with them, then they'll cast you aside and move on to someone who will. If no one will, then they'll have one Mad Dog replace three RJs.
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Absolutely. If all the regionals say "we can't do it that cheap," eventually there will be no more regionals if the mainlines think they're too pricey. As long as there are a few regionals willing to keep the aforementioned industry standard lowered then it will always be a low standard.

ATN_Pilot said:
Welcome to reality. Not quite what the Eagle Lounge and STW twits would have you believe.
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Unfortunately so, but again it's a low industry standard. STW has the world against them, but you know if no one says anything then certainly nothing will ever get changed. At least somebody is trying, as ill-fated as the attempt may be... Lets see how things transpire over the next 10 years.
 
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JustinS said:
True, but I'm sure all their rates are close to an industry standard.
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Irrelevant. If the standard is too high for the mainline carriers to be interested, then it either has to come down, or the regionals will cease to exist.

I think what regional pilots are seeking is a higher regional industry standard.
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Yes, and I'm seeking a billion dollars. How likely do you think I am to get it?
 
ATN_Pilot said:
Yes, and I'm seeking a billion dollars. How likely do you think I am to get it?
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Regional pilots are looking for a better QOL for the work they do. I don't think you can really categorize that the same as what you are saying about some ridiculous amount of money... I don't think pilots are looking for an unreasonable price for their services. Do you think it is really unreasonable for regional pilots to ask for a liveable wage to start?

I'm only a flight instructor now. I will be headed to the regionals soon, but isn't it bad when I make more instructing than first year pay at the top regionals in the U.S.? If you really think that they should live with borderline unlivable wages then we really have nothing to discuss because we're on two separate pages about that idea.

Other then that, I am in total agreement with you. If the regionals are too expensive, then let the mainline take their flying back and let the regional business model die. Or if the status quo stays the same and everybody goes about their business as usual, then so be it.
 
JustinS said:
Regional pilots are looking for a better QOL for the work they do. I don't think you can really categorize that the same as what you are saying about some ridiculous amount of money... I don't think pilots are looking for an unreasonable price for their services. Do you think it is really unreasonable for regional pilots to ask for a liveable wage to start?
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I'm a union rep! Of course I don't think it's unreasonable. The wages and working conditions are abhorrent. But it doesn't matter! Business doesn't care. Richard Anderson and Doug Parker don't care what is "reasonable." They care what makes sense for their businesses. And it doesn't make sense to pay an RJ driver what they've been paying. It just isn't profitable. So the pilots either agree to work for less in exchange for career advancement, or they look for another line of work. It may be heartless, but business frequently is.
 
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