AIN Blog: As Comair Falls, Industry’s House of Cards Wobbles

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Comair tail
Once the dominant carrier at Cincinnati/Northern Kentucky International Airport, Comair will fly its last passenger on September 29.
August 10, 2012 - 7:10am

Cincinnati-based Comair will close its doors at the end September, and nearly 2,000 people will lose their jobs as a result. Granted, the reasons for the airline’s demise might not matter much to them, but perhaps an examination of the forces that led to Delta’s decision to shutter its subsidiary will prepare others for a similar fate.

After a decade of explosive growth, the regional airline industry has virtually stagnated over the past couple of years, while consolidation and bankruptcies have seen the Regional Airline Association’s airline member ranks shrink to around 30 from nearly double that number in 2003. Meanwhile, the 50-seat jets that drove the growth of the regional airline industry for so long have turned into liabilities. High fuel prices have seen to that. Unfortunately for the regionals, restrictions on the number and size of airplanes they may operate haven’t lifted to the point to allow for enough cost-efficient replacements to offset the loss in seating capacity. Mainline pilot unions have seen to that.

If the recent agreement reached by Delta and its pilots serves as any indication, convincing mainline pilot unions to allow for bigger RJs at the regional affiliates won’t come without a cost—and it won’t happen in a big enough way to save jobs. Although the resulting increase in mainline capacity at Delta created some positions there, the fact that mainline airplanes require proportionately fewer employees per seat than do regional jets translates into a bigger loss of positions at the regionals.

Still, almost unanimous agreement about a coming pilot shortage among industry leaders during May’s RAA Convention certainly gave the impression of an urgent need for fresh-faced recruits. But to all those industry leaders and talking heads who suggested incentives to “feed the pipeline,” raising salaries to a living wage didn’t appear to register as deserving of mere consideration. Indeed, to win the so-called race to the bottom that Pinnacle Airlines described in its bankruptcy filing, regional airlines need inexperienced, low-paid individuals to keep their costs in check.

In fact, in a letter to all employees, Pinnacle CEO John Spanjers cited “significant cost and pilot seniority advantages” enjoyed by other Delta Connection carriers as the main reason the Memphis-based regional couldn’t compete effectively for more of Delta’s business.

So where now do such seniority “disadvantaged” pilots find themselves? In Pinnacle’s case, they’ll either have to take significant pay cuts or face the prospect of looking for other jobs.

Unfortunately, the structure of the industry demands a flow of cheap labor—not the kind that comes saddled with families to feed. Perhaps, if a coming pilot shortage remains a topic of discussion at the next RAA Convention, someone will acknowledge the difference.  

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matt
on August 11, 2012 - 2:00pm

Last paragraph well said. That MIGHT be the only shortage, persons willing to work for nothing. Too bad all the politicians and others who worked to get the coming rule changes made have not noticed the major airlines farming out their regional flying to new companies that were formed to get around the seniority pay issue. Although the regionals may claim they are meeting the same safety regs as the majors, the experience level does not look like it will change any if the new contracts the majors are signing with the regionals are any indication.

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Don
on August 30, 2012 - 10:46pm

Well said. The elephant in the room no one wants to talk about.

It is unfortunate that regionals need to exist at all- I thought America West had the right idea, hiring into the Dash 8 I believe, with one seniority list (at least I think they did for a short time).

Perhaps the regionals could 'make it' even with 'highly paid' senior pilots and mechanics, but think of the poor people that would need to sacrifice...i.e., Wall Street and management. Can't have that, they're the 'job creators'... snark ...

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