Archive For The “Regional Airlines” Category
Less discussed, so far, in terms of follow on impact of Delta’s decision to select the CS100 is its impact on the US regional airline market. Any discussion on the US regional airline market brings up the scope clause issue. This week the RAA has its annual conference, and we are certain this issue will be discussed again.
Except, this time the discussions should be a lot more nervous. We think Delta’s decision is one that pilots should take careful notice of. The airline stated the selection of the CS100 impacts aircraft from 76 seats and up. With the CS100 starting at the regional aircraft level, what the airline is effectively saying is that its mainline pilots will now do the some of the flying that potentially could have been undertaken by regional partners. Delta mainline pilots must be very pleased. Scope clause has worked for them, bringing in more work that might have been done by regional pilots at lower pay scales.
But this could impact regional airlines in a negative way. Regional airlines are already under pressure as mainline carriers negotiate them down to bare bones. Which is why typical US regional air service is, to be charitable, unpleasant. The idea of being able to fly a larger aircraft, with the widest economy seats in all airline service, is a fantasy few dare to dream of. The CS100 offers an 18.5 inch wide seat! That compares to interrogation room standards one finds elsewhere.
Pilots at United and American must be watching the move at Delta with glee. Since the US airlines inevitably follow each other with respect to pilot contacts, Delta’s move is highly likely to be copied. No US airline wants to get into a labor fight now – there’s plenty of money to share, provided competition stays rational in terms of capacity growth and pricing. Which means, low capacity growth and keeping fares as high as the market will bear. In other words no big up gauging and price wars. Mainline pilots are seeing a more stable career with profit sharing and better pay. Happy days for mainline pilots.
We therefore see scope clauses staying exactly where they are. This means tougher times for the makers of certain regional aircraft of course. Take a look at the table.
For US regional airlines constrained by the scope clause the market is a choice of two – the CRJ900 and E-175. The other aircraft are too heavy to fit within current scope. Which is bad news for the MRJ90, which is getting even heavier. Embraer, wisely, has decided to develop it E-175E2 last in its E2 process. Time might see the scope move to allow the E2, meanwhile Embraer will keep building and selling the current E-175. Bombardier is under no critical pressure on the CRJ, but the aircraft might benefit from refresh in terms of engines. The CRJ900 had a cabin refresh announced at RRA yesterday.
Since Delta has moved their mainline pilots all the way down to 76 seats, has the entire regional discussion changed? Perhaps the big US network airlines will simply not need to worry about scope anymore. Which could mean the future could see the MRJ90 and E-175E2, unconstrained by scope, in the hands of mainline pilots. This is not good news for the CRJ program, but might be good news for CSeries. Delta’s decision really does carry weight and we have not yet seen how their decision will impact the industry. This is going to be interesting to watch.
People like to make jokes about air travel in the US. It the staple of every dinner party and also great value for any stand-up comic. Is service really that bad? After all, Americans are paying relatively low fares and they get to travel across a really big piece of real estate very safely, and perhaps even conveniently.
There is always some truth in humor, however. (more…)