Call me special

B767

B767

Well-Known Member
I have no idea why it struck me tonight and I could be, and most likely am, way off on my thoughts. Here it is: are the legacies funding their opposition?

Regionals that do flying for multiple legacies are being paid accordingly by said legacies. Take, for example, Republic. They fly for UAL, DAL, F9, and maybe I'm missing one. In any case, each said airline is giving them money. Couldn't Republic save up money, from all their current contracts, and purchase bigger aircraft or more flying for just one airline? I.E. They save money from contracts with X,Y,Z and the spend money on X airline for more flying or bigger aircraft, thus making Y and Z financiers of X?

Dumb, I know.
 
That's correct, but it's also good business. For the regionals the benefit is a better security of funds. Their downside is limited routes as their contracts basically state that they can't compete with their respective major. So they can't start a business on their own while working for them that would compete. They could if they severed the ties, IE Independence Air.

For the majors, the benefit is smaller overhead on their end and shared risk. If something goes wrong they can pawn it off or move the losses around. It makes them harder to take down.
 
So unless my understanding is misconstrued, legacies DO fund the opposition but the cost/benefit is in their favor because its cheaper than directly competing, i.e. wholly owned?
 
B767 said:
So unless my understanding is misconstrued, legacies DO fund the opposition but the cost/benefit is in their favor because its cheaper than directly competing, i.e. wholly owned?
Click to expand...

Yes because they are allowed to whipsaw regionals that they don't own and they won't feel the consequences. Otherwise wholly owned regionals tend to get expensive, see what Delta did with Comair and Mesaba (Compass was too new and junior to be expensive...yet).
 
crazyjaydawg said:
Yes because they are allowed to whipsaw regionals that they don't own and they won't feel the consequences. Otherwise wholly owned regionals tend to get expensive, see what Delta did with Comair and Mesaba (Compass was too new and junior to be expensive...yet).
Click to expand...

I agree. I dont think the airlines dont care one bit about what the regionals do with their cash... what they really care about is how much the feed is going to cost them.
 
You must log in or register to reply here.
Back
Top