A little historical perspective.
RAH didn't invent the move of giving cash to a major. AWAC and MESA did this years before. Mesa gave a chunk of change to AmWest years ago, and AWAC bought a bunch of US. Both airlines did that to put their assets to work. AWAC (Eastshore Aviation) also had a seat on the board. AWAC deal also put the squeeze on PSA's flying as US didn't really need 50 seaters at the time. I think AWAC sunk 125 mil in the deal.
In late 1999 or early 2000 CHQ (way before the whole RAH deal came about) signed a codeshare with TWA. I personally asked the VP of Ops why BB did that. He indicated to me that BB just wanted to place the planes as the market would absorb them should TWA go under, also if TWA was to go away, someone would have to provide the lift.
TWA got bought by AMR, the 50seaters (12) were a scope no-no. BB brokered a deal with AmWest, and placed those 12 jets in CMH. As AmWest came under the cash gun, and neglected to send us our money until the 12th hour, the planes would sit fueled up in CMH for a potential journey to IND, which never occured. AmWest pulled out of CMH, and gave BB the option to go to PHX. He said thanks, but no thanks, as there was no way to support the operation out there.
Some how he got the planes a 3rd coat of paint in DL colors, when DL didn't need the capacity.
Part II
Republic, like anyother public company, has the responsibility to make money for the stockholders. Sorry, and at times it sucks, but it's true. Well before most of us were in the industry, there was a company that would come in, and undercut the established carriers by having lower fares and pilots paid less than industry standard. Revenue, profit and thus pilot pay was eroded.
Today, Southwest airlines is hearlded as a "game-changer" and the airline most want to work for. You can argue for how great they treat their people, and I know that is true, but the business facts remain the same. Now they are some of the highest paid pilots. Partially because their pay has increased, but mainly because everyone else's pay has come down.
Part III CBAs and you
As you all know, I worked at RAH. I was there when the current CBA was negotiated and voted in. I voted YES on it. I'll tell you why.
When the CBA was written we had 50 ERJs and 500 pilots. The agreement presented was a far better deal than we had previously. Most importantly, was the SCOPE clause as there was a threat of a whipsaw carrier.
Why were the 70 seat rates not what most of you feel they "should have been"? We had ZERO on the property. I don't know about you, but why hedge bets on things that might happen? So our negotiators put the bulk of our money in the 50 seaters as those were our future at the time. I'm sure the people on the RAH MEC realize that the pay rates are undervalued, and will adjust them accordingly in the next negotiation. RAH is flying mainline aircraft now, and it's make-or-break time for a mainline contract.
In fact, no one in anywhere would have believed the explosion of growth that happened since the in-place CBA was signed at RAH. It's really unprecidented and was in no way predicatable at any level. Now it's time to catch up the CBA to the company. However, since I'm not there, I have no input.
No "mainline" just up and had great workrules and pay by the grace of God. Pilots, at one point, got fed up, went on strike for a major gain contract. Mostly it was done in the 50's under regulation. Today, we have an era where this is possible again, in my opinion. At no time since de-regulation has there been so little cash available for start-up low-priced capacity. Pilot groups, especially ones with a niche market like RAH and the EJet have, don't have the fear of Bob's startup airline.
Moving on to Midwest.
It's a shame that they are in such a tough spot. The company that started as Kimberly-Clark's flight department has filled a great niche for years. I know alot of guys that used it as their stepping stone to get on to legacies or cargo giants. The only question I have is about their scope clause to protect their work. One airline recently chased $$$ over scope. They were one of 2 in DHL's US network, and were 49% owned by DHL. Now the airline is shutting down as DHL transferred the work to UPS.
Scope, and it's importance can not be overstated. If you have a chance to vote on a CBA, and there is no scope clause, I'd vote no. Sure you might work 1 day a month and make 300,000/yr, but if there is nothing to ensure that you will still have a job, then the CBA is nothing but an expensive paperweight.
More about BB.
I remember back to June of '99 when I first saw him in the office. Through the next 8 years, I'd run across him occasionally. While I only really met him and his wife once, at a hog roast no less, he always remembered by name and would shake my hand. I'm not entirely sure he knew what I did, but he was always very coridal. Actually, except for 1 of them, all the upper level guys were very social.
BB is an opportunist, and one that is very successful at that. While he won't say publicly he wants his own show, and I have no empirical evidence to say as much, he wants his own show. He won't say as much publically because of the political impact on present business partners. Who in their right minds would renew an agreement with someone with publically stated intentions of using the money you give them to become a competitor. With his accomplishments and proven track record in the industry, why hasn't he been scooped up by some board to run an airline? He didn't build CHQ from the ground up, like Atkins (?) out in Utah. His specialty is taking near-bankrupt airlines and turning them into power houses. There's no glut of work for someone with that talent in this industry.
Anyway, that's my take on it....not that anyone asked.
This and $2 will buy you a cold beer.