Food for thought (LCC vs Legacy)

chrisreedrules

chrisreedrules

Master Blaster
I'd like to hear some opinions on a subject that I've heard brought up quite a bit regarding the future of our profession and the future of airlines in the US...

The DOT approving NAI to operate and compete directly against US carriers will have long-lasting repercussions. And I know some will debate that a lot of this is being overblown by ALPA and by pilots with little understanding of the situation, but I say that NAI is the first of many. And the real threat hasn't even began to be seen. I think it is safe to assume that US legacy carriers will be hit the hardest by this. The waves from this may not begin to be felt quite yet, but what about in 5 years? In 10+? I am beginning to wonder if the safest career bet for someone with only a couple years of experience in the 121 world might not be a career at an LCC. Is it possible that this will drastically affect hiring at the legacies? They are now facing a battle on 2 fronts as I see it. Dwindling pilot supply for their cheap regional feed over the next 5 years will likely mean capacity and route cuts for many cities, and now their wodebody international flying could simply cease to exist within the next decade by some accounts. Sure the legacies are the place to be right now, and they are hiring like gangbusters. But will they be the place to be if you aren't hired inside of the current wave we're experiencing? Legacy pilots would of laughed if you told them Southwest was going to be the place to be, and look what happened.
 
The legacies will be here. Probably another merger. Some shake-outs on the LCC end of the industry including merger/acquisition.

Some of the old names like Braniff, Eastern (already!) etc will be festooned in glowing headlines like "Braniff is BACK!" when it's just some charter operator who is leasing the name from some half-broke widow in The Hamptons.

Maybe another Skybus-style carrier.

I dunno.
 
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I don't think you can go wrong with AA since even if the poop slings into the fan you have lots of exiting silver hair guys that would hopefully absorb the need to furlough. After living the aftermath of my pops accepting an EAL job offer over a DAL offer, I've learned it's too hard to predict. I wouldn't be surprised if we have a few LCC's mergers in the next 5 years. Even if the legacy widebody flying gets crushed, they can still remain profitable but it would level the playing field in terms of a pilot's financial income with LCC vs Legacy. Personally I think you just have to go with whoever calls first and reevaluate from there. I have quite a few friends at the regional who turned down NKS and B6 and would be captains there now but instead they are still at RAH waiting for their legacy lotto ticket.
 
Of the LCC's the only one I personally would go to is Spirit. They are the lowest CASM operator in the US with excellent management. They have a fairly robust route structure and are slowly gaining. Frontier is a mess and if anything Spirit will buy them. Or just out compete them. Allegiant is a one-off doing point to point leisure travelers, that is their business model, their management knows to make money on a smaller scale but their model can't be scaled up realistically. SWA is no longer a LCC but goes have a good product, but growth will be slow and they are top heavy employee pay-wise. JetBlue actually is an interesting choice, I might actually go there over Spirit personally but Spirit would be a close second. Spirit would probably be a more secure job. But so is Wal-Mart greeter.

As far as international routes it's possible the smaller LCC's will start to hit the legacies. Keep in mind they mostly do point-to-point. AA/DL//UA pulls from their entire domestic network to fill their international routes. Worst case is the workers at the legacies take pay cuts to match the LCC's. Then everyone is on an even field again. Don't count out the US legacies, they have been competing against the ULCC's now for many years. AA block hours are still increasing yearly albeit at a much smaller pace. DAL is too, not sure about UAL.

Personally it's nothing that keeps me up at night. Worst case for me is I leave to go to one of these European LCC's with a base in the US. All things point to experienced, well trained English pilots to be in great demand over the coming years. I'm not spending my legacy pay check on a car or house, I'm investing. Use the legacy money to buy your financial freedom. If the worst happens retire early. If the best happens buy a Porsche or retire early. Whatever.

I personally wouldn't want to work at Spirit my entire 33 years. If that is the best the career will offer, I say quit now before you invest too much time in it. Seriously. Not worth it.
 
Yes, but what's good for business and the marketplace, isn't always good for pilots.
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Yepp, but that's only a minority problem... We are all overpaid scums and the AP is doing most of the work. At least that's what I've been told last week.
 
wheelsup said:
Of the LCC's the only one I personally would go to is Spirit. They are the lowest CASM operator in the US with excellent management. They have a fairly robust route structure and are slowly gaining. Frontier is a mess and if anything Spirit will buy them. Or just out compete them. Allegiant is a one-off doing point to point leisure travelers, that is their business model, their management knows to make money on a smaller scale but their model can't be scaled up realistically.
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I see what you are saying about scaling up but G4 is adapting their model by adding a lot of
mid size to mid size city routes (similar to Spirit) in addition to the cash cow model they built up. Also their CASM is very close to Spirit with less utilization of their aircraft. Once G4 increases utilization, which it is in the process of doing, CASM will be much lower due to lower aircraft cost. I don't think you can go wrong with either, both companies have very stong balance sheets and both would have more then tripled a stock investment over the last 5 years.
 
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