United Shuffles Its Express Carriers, Trans States Will Disappear

ExpressJet, Trans States, United

United has eight different airlines flying under the United Express banner owned by seven different companies. Does it really need all of those? Probably not; so it’s good to see that United will simplify a couple operations and remove one entirely. Trans States will go away toward the end of this year, and that’s a good thing. Apparently the airline has been having an awful time recruiting pilots, so this will sacrifice one arm to save its life.

There are really three regional airlines seeing changes here, but there’s a fourth that plays into this drama as well.

  • Trans States will stop flying its 42 ERJ-145s and go out of business
  • ExpressJet will pick up 36 ERJ-145s and stop flying its 25 Embraer 175s
  • SkyWest will pick up 25 Embraer 175s

This sounds a lot like shuffling for no good reason, but there is a method to the madness.

Trans States Goes Away, ExpressJet Gains ERJ-145s

Today, Trans States is flying 42 ERJ-145s for United. There will be 36 of those going back to ExpressJet with the rest presumably being sold off or returned to lessors.

Did I say going back? Well, yes.

Though I don’t know which of the 6 Trans States airframes won’t make it to ExpressJet, I think it’s safe to assume that the 30 ERJ-145XRs that Trans States took over from ExpressJet four to five years ago will end up going back home.

I would also assume that the three former American Eagle LRs — the only ones built prior to the year 2000 — won’t be making the trip. The other eight airplanes (all LRs) were delivered directly to Trans States in the early 2000s.

This is an orderly transition, so there won’t be any disruption. Here you can see the current Trans States route map via Diio by Cirium.

Trans States July 2020 Route Map via Diio by Cirium

All of the Trans States flying is centered on Chicago and Denver today. The airline has about 75 to 80 daily departures out of Denver during the summer. This will now be a new station for ExpressJet. SkyWest flies the bulk of that operation now for United with a few flights from Republic, so this will add diversity in Denver.

In Chicago, Trans States flies 25 to 30 departures per day, but there ExpressJet already operates 50 of its own, so this just gives it a larger operation. GoJet, SkyWest, Republic, and Air Wisconsin already have sizable operations there too, so this consolidation isn’t a concern.

With these moves, Trans States will disappear for good as an airline. This is a company that started flying nearly 40 years ago as Resort Air. Its first regional partnership was out of St Louis as Trans World Express. It has flown for just about every airline over the years. Its AX code — and Waterski call sign — will likely be retired, but the Trans States name will live on.

Trans States Holdings remains the parent of GoJet and Compass. It’s actually GoJet’s success that is probably leading to the death of Trans States.

GoJet Needs Pilots

GoJet had been operating CRJ-700/900s for both United Express and Delta Connection, but the Delta partnership is ending. United gave the airline its big break with the invention of the CRJ-550, a CRJ-700 with only 50 seats.

GoJet said it would convert its 15 CRJ-700s flying for United into CRJ-550s, and then it would get another 39 sourced from elsewhere. Less than a week ago, the airline won another 20 airplanes to make for a total of 74 in the fleet.

In a letter from Trans States President Rick Leach to the employees, he explained:

…we are facing a Captain shortage that will result in an inability to meet our increased productivity objectives and even our current contractual flying obligations. The imbalance between Captains and First Officers is so extreme that earlier this month, the company took the unprecedented action of canceling a First Officer class already in session, while delaying others.

Though he doesn’t mention GoJet, he does say that “it is our ardent hope that you will choose to apply for openings at one of our other Holdings carriers or the Holdings company.”

United spokesperson Charles Hobart was more pointed in a statement he sent to me Update: The United statement was retracted and has been removed from the post

It says something that other airlines are able to hire pilots while Trans States struggles despite having similar pay rates. But from what I’ve heard through the grapevine, I believe it. The end of Trans States means the company can focus on staffing those higher-paying GoJet airplanes instead.

ExpressJet Loses Embraer 175s, SkyWest Gains

A year ago it would have sounded funny to see this piece of the news since SkyWest owned ExpressJet. But ExpressJet is now effectively owned by United (via subsidiaries due to labor regulations) and it will now focus solely on the Embraer 145. In other words, it’s a return to where it was back in the Continental Express days.

The contract flying CRJ-900s for Delta is already gone, so that leaves just the 25 Embraer 175s operating for United in the fleet outside of the ERJ-145s. Those 25 will go over to SkyWest.

Here’s the current ExpressJet route map.

ExpressJet July 2020 Route Map via Diio by Cirium

As you can see, ExpressJet operates out of Chicago, Houston, and Newark. The green lines, however, are the Embraer 175 flying that is done solely from Chicago and Houston.

SkyWest already operates 35 daily flights from Chicago on the Embraer 175, and this will boost it up to 85. Republic also operates 13 on that fleet type there.

In Houston, SkyWest only flies 5 flights a day on this type, so this is going to give it a little more scale by adding another 4 per day. It’s still tiny compared to the Mesa behemoth and a few more on Republic.

In the end, this is a good deal for just about everyone. SkyWest gets more airplanes, ExpressJet wins some and loses some but has a net increase and can simplify its fleet, and while Trans States goes away, its brother GoJet will grow. Employees shouldn’t have trouble finding a job with all these shifts, though I can imagine those who are seniority-based having a harder time with the change unless there is an agreement for that to transfer.

As for United, it gets to cut down the number of Express operators by one while maintaining enough diversity in its hubs to avoid any airline-specific disruptions. This sounds like a win to me.

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28 comments on “United Shuffles Its Express Carriers, Trans States Will Disappear

  1. Cranky,

    Do you see any chance of further consolidation among the regionals? I mean seven is still quite a lot for UA alone. But to be fare, some regionals like SkyWest fly for more than one carrier & that bring scale to an operation.

    1. SEAN – Yeah, for sure. I’m not sure who it will involve, but I think people have been waiting for consolidation for years. The only bet I’d make is that SkyWest will remain on top. After the ExpressJet acquisition, it may shy away from dipping its toes in that pool again, but it can grow organically but just winning contracts and doing a great job as it always does.

      Outside of the legacy-owned regionals, you’d really think there would be opportunity to roll up Trans States (Compass and GoJet) with Republic, Air Wisconsin, and Mesa.

      1. I would mark compass as a dead man walking after Skywest got 20 more E175 to operate for AA out of LAX which is the exact same location and number compass is currently operating then TSH comes down to gojet and the crj-550 which is an experiment which may or may not be viable but you have to imagine TSH has no backup plan if it doesn’t work

  2. The United whipsaw strikes again.

    Your “good deal for just about everyone” comment is a bit insensitive. There are around 600 pilots, let alone flight attendants, dispatchers, mechanics and other employees that are going to lose their job. I’m sure they’ll give preferential hiring to TSA at GoJet, but in either case you get to go back to year 1 pay and give up whatever seniority you had. Maybe they’ll give them a break and let them carry some pay over, but the seniority hit is huge.

    For the seniority based positions, there’s a lot of people that are being forced to take massive pay cuts and probably have to relocate their families over this.

    1. Yeah pretty much. I cut my teeth in this business with a regional airline 20 years ago, and realized that lifestyle wasn’t for me. Whenever I see a “shuffle” like this (which includes moving Xjet’s 175’s to Skywest) my first thought is all the pay and seniority that gets lost by moving labor over to year zero pay. I don’t see any “winning” other than UA’s P&L statements.

      “Growth” today is just “bloated” labor costs tomorrow once the growth stops and average labor costs increase as average seniority increases. Then the cycle starts all over again.

    2. 1. Being a career RJ pilot is a tough lot, no doubt. If you’re with OO you’ve done OK, otherwise you’ve been through bankruptcy or been shut down.

      2. G7 is adding 40 net CR5s. Assuming TS Holdings wants to exist in a year, they’ll make sure AX pilots can keep some seniority transitioning over to the G7 CR5s. Ditto the FAs, mechanics and dispatchers. (Suppose the DEN base also gets shut down.) Looks like AX ERJ and G7 CR7/CR5 pay is actually pretty comparable.

    3. Disclaimer: never worked in the airline industry, don’t know enough/a lot about how it functions.

      That said, the seniority system has always seemed weird to me, and a great way to lock employees into a particular company. Do employees actually like it? Does that POV change when things like described in this blog post happen?

      1. In many other fields there is a way to measure employee productivity. The most straightforward is sales people (amount of sales). But pilots are supposed to be doing the same thing flying the same predictable trained checklisted standard procedures way. Everyone makes mistakes, but you want a culture of admitting them and preventing the root cause. That doesn’t really leave much other than “how long have you been flying and how big are the planes?” Seniority strongly correlates with that. Is there anything practical that is better?

        1. Well, it’s easy to measure pilot productivity. To your second point, there’s just no differentiating value because everybody is doing the exact same job to the exact same level of proficiency. And that’s what makes the pilot labor market very, very tricky. If we all do the same thing, what’s my competitive advantage that allows me to negotiate for more pay? I have none.

          1. Pilots are restricted to 1000 hours of flight time per year which means about 19 per week. This makes it difficult to differentiate between your pilots on productivity.

      2. Oliver,

        It’s great at the top if you can get there. If you can’t, it sucks, and things like this are a reminder. I won’t go so far as to say nobody at that the regionals likes it that way, as I’m sure a few do. The question, though is what’s the other choice? That aren’t many.

        The thing that makes this particularly bad at the regionals is that UAL/DAL/AAL etc can swap out their regional partners with moves like this, reduce costs, screw up peoples’ lives and the traveling public is none the wiser. Nobody but insiders and the biggest geeks are going to have a clue who Trans States was, or that there’s a different regional operator flying the UAX colors. This will happen multiple times over the career of a regional airline pilot who never broke into the majors.

        OTOH… if you make it to the top, you get your choice in flight schedules, which often means being the captain of a wide body make 7-8 trips to Europe a month and making $250k+ for the privilege. First choice in days off and vacation too. Would you give it up? It’s a pretty good life at the top, and people put up with a lot to try and get there. Many never do.

        The other problem is, people at the bottom have absolutely no clout. They can’t change the system.

    4. Mike – I’d love to see a seniority list at Trans States, because I imagine there weren’t a lot of senior folks there. In the regional world, and I assume Trans States in particular, it’s just a stop on the way to a better job with a bigger airline. I do expect that GoJet will come to some kind of seniority agreement, but I just don’t see this as a huge loss for most people. I’m sure some will be impacted, and that’s certainly unfortunate.
      But hopefully they’re able to get a happy landing.

      1. CF,

        Airline seniority is a relative thing for Quality of Life purposes, and an absolute thing for pay purposes. That is, Year 2 pay is Year 2 pay, but the guy who is #1 on the seniority list is #1 regardless of how many years of service he has. This allows him/her first choice in lines to bid, first dibs on vacation, and a few other things.

        So the hit is huge, regardless.

        Also, I understand things have changed a bit with the pilot shortage, but Year 1 pay is a joke. It used to be that a Year 1 FO was making $20k a year, and admonished to not redeem food stamps while in uniform. While Year 1 pay has increased a bit, a paycut is still a paycut.

        1. Vacation times are important, but for flying lines there can’t be huge variations in terms of what’s available for current Trans States pilots. Looking at the route map, everything would be out and back from DEN or ORD, or possibly jumping between two of them. It’s not like there’s a big network with long flights that require long rest periods or international flights or Hawaii layovers to choose from. And if they move to another regional carrier (whether ExpressJet or elsewhere) overall flying patterns will be more or less the same anyway.

          1. I’ll freely admit that regional airlines don’t have quite the *obvious* variation in trip rigs that an international long haul airline does, but one cannot say from the “outside” that there is no variation in a given regional airline’s trip rigs. For one thing, holding a line (known schedule) vs sitting reserve (being on call) is almost always a thing. Then there’s other things regionals can do that some people like and some don’t, such as lines that contain “continuous duty overnights” (which have a variety of airline-specific slang terms), which have a pilot flying the last flight in to an outstation and the first flight out in the morning. Also, different schedules may have different lengths of consecutive days on/days off that some people care more about than others. (E.g., dudes with kids might prefer to know they can bid the weekends off.) Then, some guys get picky about their overnights… as in some hotels give you free breakfast so you can pocket your per diem. Domicile choice comes in to play too, although I don’t know anything about TransState’s domiciles.

            I’d rather have top pick of “more or less the same” flying patterns (because some are “more or less the same” than other) than having to pick off the left overs. Regional flying schedules can get funky in ways that aren’t obvious.

    5. I agree with you. Very insensitive. While it is understood companies look at numbers, bottom line and share holders, they don’t think or are dismissive of the hundreds of families that will be affected. Very sad for Trans States. I wish them all the best.

  3. My incorrect prediction of last year, that the regional industry would see some consolidation, was a bit early. But it’s beginning to happen this year, sort of. This isn’t a pure consolidation but more of a reshuffling, but with the same net effect – the number of regional airlines is shrinking. I continue to think there’ll be further consolidation, acquisitions or attrition among regional carriers, with the likes of Mesa, Air Wisconsin, Compass, and a few others in danger of appearing on the “Airlines We Lost” list in the not-too-distant future. It seems to me (and, as I usually admit, I could be dead wrong) that the regional airline industry will ultimately consist of wholly-owned carriers plus SkyWest and Republic. Stay tuned.

  4. “As for United, it gets to cut down the number of Express operators by one while maintaining enough diversity in its hubs to avoid any airline-specific disruptions. This sounds like a win to me.”

    Eh. I worked for the fabled Atlantic Coast Airlines twenty years ago, and back then, UAL had just three regional affiliates, which gave them the size to think they had the leverage to pull off the Independence Air stunt. To this day, I don’t blame them for trying instead of just caving into UAL’s demands. IIRC, at the time, US Air had like nine regional affiliates.

    My point here isn’t the trip down memory lane per se, but a broader note to say that there’s always churn in the regional business. Labor always loses in moves like this, so to that extent, UAL wins with the spoils.

  5. What a mess! It’s sad and confusing to me. Sad in that I first flew with Trans States on a Jetstream 32 when they were TWExpress in St. Louis. Confusing in that, when I was flying through Grand Rapids several times last year, each time I would always spot at least one RJ with Trans States titles only. Those planes were silver, similar to American’s colors. I never did find out why those planes didn’t have the livery of a legacy carrier, as was the custom (or so I thought).

    The people I really feel bad for are the reservations clerks, travel agents, and for the ticket and gate agents that have to keep all of this straight! Dan is right, though, “There’s always churn in the regional business.”

    1. Many regionals have a handful of planes in their own corporate livery. This allows the aircraft to be used as spares and move between legacy networks as needed.

    2. There aren’t really any reservation or travel agents at a regional as that’s all handled by the marketing carriers, and most airport ground staff are either mainline employees of the marketing carrier or work for a contractor retained by the marketing carrier such as GAT, UGE, or DGS (RIP). The employees who will primarily be affected are pilots, flight attendants, and maintenance personnel, but they should all be able to transition to other companies within Trans States Holdings, and with pilots and flight attendants a regional is never their endgame anyway.

  6. It will be interesting to see what happens to the regional airlines when the existing fleet of 50-seaters reaches end-of-life.

    70- and 76-seat jets can be replaced with new MRJs, but there is no plausible jet in production or development to replace existing 50-seaters. The ERJ145 production line is nominally still open (due to commonality with the Legacy business jet), but I doubt airlines would choose to put in new orders for that aircraft. It’s plausible that some E170s and/or more CRJ7s could get a cabin overhaul and continue to fly as 50-seaters (a la the CRJ550), but that’s a temporary stop-gap and the economics of it just wouldn’t work on routes with less premium demand.

    Unless scope clause limits on 70- and 76-seat aircraft are reduced (seems very unlikely), it seems like a massive slice of traffic at regional airlines will eventually disappear without a replacement. Airlines flying 50-seaters at the time will be the losers in that game of musical chairs.
    replacement
    Regionals could theoretically replace 50-seat flights with scope-exempt turboprop flights (the ATR 72 and Q400 are both still in production), but the additional capacity of those aircraft would still require lower frequencies, and it’s not clear to me how much of a fare premium passengers are willing to pay for a jet aircraft. The fact that all the regionals have switched exclusively to jets seems to indicate that it’s a lot.

    1. There’s an ebb and flow with fleet types that I don’t think has sorted itself out yet. Yes, with the advent of the 50-seat RJ, many passengers shy away from turbo props. But to your precise point about the lack of an obvious replacement for the 50 seat RJ when it reaches end of life, the airlines are going to have to replace it with *something* or discontinue service from the smaller markets.

  7. How is this an orderly transition for anyone but United? How is this better than a merger between Trans States and GoJet? In theory, you get to reduce administrative costs. In practice, you’ve got a pile of startup costs, including staff rehiring, training and integration to accompany the shuffling aircraft. And, oh by the way, everyone has to apply for their job over again, wasteful and dehumanizing, justifying more combative industrial relations. What you seem to be really saying is the union at Trans States was out of control and needed to be eliminated, necessarily by Chapter 7 bankruptcy. Merger would have more smoothly accomplished any other goal. Why did Trans States have problems hiring, when their sister airlines apparently do not?

  8. The biggest takeaway is that United appears fully committed to the largest possible regional jet operation that it can operate, including as many aircraft below 50 seaters even as American and Delta aggressively move to remove 50 seat aircraft and get better economics in the process. More than 60% of United’s domestic flights are operated by a regional carrier which is by far the highest percentage among the 4 US airlines that have regional carriers. Delta’s addition of the B717 and A220, in contrast, has shifted hundreds of flights/day to mainline aircraft which has helped Delta get its unit costs lower than American and United while also providing more jobs for Delta employees.

    While so many including United itself argues that it has the best route system, it doesn’t seem to be interested in moving large portions of its route system to United employees and mainline aircraft. Continually moving operations between regional carriers might look good in a powerpoint presentation in Chicago but it has enormous real world costs which impact UA’s service levels.

    Given that United is in negotiations with its pilots (as are AA and DL), these moves can’t be seen as encouraging to UA pilots.

    1. Maybe I have misunderstood, but I thought that Kirby was up gauging routes that had been downgraded to regional jets before? Isn’t this feed from smaller cities to the hubs? So there has been more mainline activity at United (maybe impacted by the MAX problems)—or am I mistaken?

      1. Kirby has been talking about that but I don’t believe there has been much in the way of significant upgauging in the united network but Kirby has been pilling on the RJ’s like nobodies business 50 ZW (with an option for 15 more), another 54 at G7, and a few more E-175 to replace 20 CRJ-700 at G7 those are no moving to OO. So they have added 120 aircraft to the express fleet and nowhere near that number to the mainline fleet.

  9. United has failed with their regional strategy since their the merger and that 9 1/2 years ago. united gone thru at least 3-4 Senior VPs of UA Express and no cogent long term strategy. When you buy the lowest cost operator you get what you pay for and it continues to show. I have business colleagues throughout the US and utilize UA regionals to connect and the operating completion factor and ontime performance is abysmal. Missed connections and late flights seem to be the norm. You cannot get good operational updates and when you call UA reservations they basically throw their hands and and say “ it’s not UA so we don’t know”. UA should demand or help pay for integrated technology to track flight data but they skimp on this is well. No trust with the regional carriers at UA. Let’s hope this new new strategy works

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