The Next Threat to the Industry

[wheelsup]

Mainline carriers will renegotiate contracts in order to keep their feeders from going away. Both USAir and DAL have bankrupted their regional partners in the past, ripped up contracts and debt, and started over. Beautiful business model from a management perspective. Why people own the stock blows me away, that's just crazy.

There is basically a zero percent chance that the regionals will cease to exist due to funding IMO. Staffing, we can only hope.

With this rate reset with SkyWest however, it's going to get interesting over there.

 

[falconvalley]

No, I'm looking at 10 years of financials, actually.It just happens to get worse over time.



Clearly. But you should.



In fact, they do not have the ability to do that. At least not by much. You're assuming that staffing the airline is the top priority. It isn't. Generating value for shareholders is. If you reach a point where you can no longer turn a profit because labor and other costs exceed what you can get for your product, then the best value to shareholders is liquidating assets. Bedford either needs to come up with one hell of a good FFD deal in the next five years or so, or he'll need to find another regional carrier looking to make an acquisition. Delta seems to be putting their eggs in the Endeavor basket, since Endeavor is wholly owned. They won't throw massive amounts of cash at Republic for pilot retention bonuses, and neither will UAL. The reverend is going to have to save himself, and he doesn't seem to be doing a very good of it so far.

I think you misunderstand my point. For starters, you misquoted me, above. There's a big difference between not immersing in something at all and not immersing in an emotional way. I could agree about the airline priorities part. I think staffing is as much a priority as saving money at all costs will allow, for this airline. IMO, they're digging themselves in a hole, when all they have to do is raise pay. Of course, they are focusing on aircraft management, but out of one corner of their mouth, they say they purposely did not bid on flying because of staffing. Well, ok. Then, use that philosophy and don't funnel so much money into aircraft management if it drops the ability to up pay. This is just a very simple look at it. Oversimplified, perhaps, but they say one thing and then act in a different manner. Todd, you can stick with your statement that it is concrete "no money" and "doom and gloom" all you want after looking at what's been going on. The fact is that company's never look the same after 5 and 10 years anyway. Flexibility is important.

 

[SlumTodd_Millionaire]

I think you misunderstand my point. For starters, you misquoted me, above. There's a big difference between not immersing in something at all and not immersing in an emotional way. I could agree about the airline priorities part. I think staffing is as much a priority as saving money at all costs will allow, for this airline. IMO, they're digging themselves in a hole, when all they have to do is raise pay. Of course, they are focusing on aircraft management, but out of one corner of their mouth, they say they purposely did not bid on flying because of staffing. Well, ok. Then, use that philosophy and don't funnel so much money into aircraft management if it drops the ability to up pay. This is just a very simple look at it. Oversimplified, perhaps, but they say one thing and then act in a different manner. Todd, you can stick with your statement that it is concrete "no money" and "doom and gloom" all you want after looking at what's been going on. The fact is that company's never look the same after 5 and 10 years anyway. Flexibility is important.

This is like trying to have a rational conversation with a creationist. Never mind.