The Low Cost Carrier, LCC, and the demise of the Legacy Carriers. This week we will finish it up and hopefully you can see that the legacy carriers are making a comeback and it is my belief that the next wave of deregulation will turn the tide. So, let’s take a look at the Regional Jets and the part they will play in the future. As always I would like all aviators to connect with their roots and one of the ways they can do that is by using the “Third Dimension Blog” as a resource.
“Flying has always been to me this wonderful metaphor. In order to fly you have to trust what you can’t see. Up on the mountain ridges where very few people have been I have thought back to what every flyer knows. That there is this special world in which we dwell that’s not marked by boundaries, it’s not a map. We’re not hedged about with walls and desks. So often in an office the very worst thing that can happen is you could drop your pencil. Out there’s a reminder that there are a lot worse things, and a lot greater rewards.”—Richard Bach
The LCC is also a business model that the legacy carriers have adopted, except they are called regional airlines and are used to provide the minor to major market feed traffic, as well as point-to-point service to compete with the LCCs. Regional Airlines are certainly not new to the scene but let us consider the possibilities.
Embraer is now producing a very successful narrow body twin engine jet that can be ordered in a 75 to 125 seat configuration and have similar capacities to the original DC-9 and the B-737 which are of course main line equipment not regional. To date, Embraer has over 800 firm orders and options for another 800.
Bombardier is in the race as well as a couple of other manufacturers and these aircraft are not only being used by regional carriers but main line carriers as well. The only thing that is currently stopping the legacy carriers from moving more of their business to the regional carrier with the larger jets is the Scope Clause in the contracts with their pilots.
A Scope Clause essentially limits the size or number of seats that a regional operator can use for the main line carrier. The concept here is to encourage the airline management to grow the airline from within and limit the outsourcing of jobs to the regional carriers. The concept is valid and is needed more today than ever before because of airline economics and bad management. However, be prepared for some of the regional carriers to walk away from the main line support system and add to the LCC competition– or slugfest as it is called by some–and there will be some fierce negotiations during the upcoming contract negotiations between ALPA and the legacy carriers.
Next week we will start our series on the next wave of deregulation and the impact it will have on all of the carriers. So, until then take some time to look back, connect with your past and remember as an aviator you are a “Gatekeeper on the Third Dimension.”
Protect your profession, your future and the future of your fellow aviators.
September 25, 2009