DESTINATION: POINT STUPID

Last Tuesday, June 14, we updated the Swelbar-Zhong U.S. Regional Market Watch to August 2022. The data points that jumped out at us were two: 1) departures flown by the Big 3 on large regional jets as a percent of the same month in 2019 continue to decline; and 2) the schedules filed by American were signaling reductions. American has been slow to make changes in its regional space. But...

As we finished, I was sent a letter that ALPA President Joe DePete sent to RAA President Faye Malarkey Black that in effect told her to stand down trying to make even common-sense changes to the 1500-hour rule. Instead, she and her members should strive to negotiate the types of agreements that ALPA had just won with two wholly owned regionals at American. I guess Faye and the RAA now have collective bargaining rights.

At 2Q fares and $20 oil, maybe those rates might be sustainable for a quarter or so. But those rates for small and large jet regional flying were not about ensuring the operation would be financially sustainable, rather the rates are there to retain and make AA more attractive than others seeking new pilots. I remember looking at the numbers of pilots leaving AAs wholly owneds a few months ago and even with a flow through, they were retaining 25%. That is not good.

Like the Delta dot I wrote about in the last post, these rates are POINT STUPID. Or is it something bigger? Not only do the rates at mainline levels make pilot labor happy -- a network without regional flying means less need for scope language. With the likelihood of a recession increasing in the eyes of many economists, maybe it is a mindset of to hell with costs - we will deal with it later when the economy turns down.

Something just does not feel right here. The industry has been here before.

#AviationWeekOpinion: asked me to write a column for them on the pilot issue. It appears online at #AviationWeek and I am attaching what will appear in the #AviationDaily on Monday. I approached the piece with a mindset that it had to be something more than small jets and small community air service.

It is bigger. Depending on where you sit, you will either enjoy the read or you will not. I know that my Christmas card list will be shorter this year.

It is one man's thoughts and do not represent those of any professional affiliation I might have.

June 20, 2022