If ever an airline had nine lives, it’s Air Wisconsin. Somehow, this airline finds itself in the right place at the right time more often than not. Most people think it should have disappeared long ago. This week, it did it again by signing a new agreement to takes its talents up-to-60 airplanes and pilots from United Express over to American Eagle. This is very bad news for United, and it’s a great coup for American.
The basics of the deal are this. Air Wisconsin’s contract flying CRJ-200s as United Express is up in February of next year. According to ch-aviation, Air Wisconsin owns 64 CRJ aircraft, most of which were delivered in 2000 or later. Now, when that deal ends, American will make Air Wisconsin an American Eagle carrier once again with “up to 60” aircraft flying from March 2023.
This is a remarkable development for an airline that was cast off as dead many times. The transition should be remarkably smooth. The Air Wisconsin network is entirely focused on United’s Chicago/O’Hare hub along with a smaller presence at Washington/Dulles.
American says Air Wisconsin’s fleet will also focus on Chicago/O’Hare flying as American Eagle. This is easy since Air Wisconsin is already set up to run a Chicago-based operation. The airplanes just need to leave Terminal 1/2 one night, go get a paint job, and then park at Terminal 3 the next morning.
The question here is… just how many airplanes will be flying? The “up to 60” wording is confusing, but it also makes sense. Thanks to trouble getting pilots, Air Wisconsin has been flying far fewer than the 64 airplanes it owns. Again looking at ch-aviation, we see that there are 51 active aircraft, but even that is a stretch.
In August, Cirium schedule data shows that if 51 aircraft were operating, they’d only be flying a little under 6 hours per day. This is all because Air Wisconsin just has not been able to source enough pilots. But it has some pilots, and that is the beauty of this deal.
I tweeted about this when the news first came out, and I was surprised by not only the sheer volume of discussion but also the very negative response. Here’s just a sampling to give you a picture.
“AA getting saddled with up to (60!) old & busted CR2s in 2022 and it’s somehow a win?”
“I’m one of the ones who KNOWS you’re wrong Brett. Sorry you can’t accept it.”
“United announced this previously, it’s part of their plan, not a surprise. And the CR2 is straight up trash to fly in, this is a win for United.”
United is officially echoing these comments. A spokesperson gave me this:
This decision is consistent with our United Next growth strategy, where we plan to fly more larger narrowbody aircraft within our domestic network.
I don’t buy it one bit.
Anyone who is focusing on the aircraft itself is completely missing the point. This isn’t about airplanes. This is about pilots.
United has been struggling to maintain its domestic network. It is greatly hamstrung compared to its competitors. Delta has a large fleet of Boeing 717s and Airbus A220s that not only makes it easier to serve smaller markets with mainline airplanes, but that also unlocked an additional 40 aircraft with 76 seats at the regionals as per the pilot contract.
American has it even better. It has limits on the number of 70/76 seat aircraft, but it is effectively allowed unlimited flying up to 65 seats. That’s why we’ve seen such growth from SkyWest using 65-seat CRJ-700s. It’s a unique feature of American’s agreement.
United has the same deal as Delta, but it does not have those small narrowbodies that allow an additional 40 regional aircraft. It has its maximum of 153 aircraft with 76 seats and 102 with 70 seats already in the system — though if those regionals had more pilots, they could better utilize them. Any aircraft growth has to be in the 50-seat and under category or in mainline airplanes. It is taking delivery of large airplanes, but it has struggled to keep 50-seaters flying because there just aren’t enough pilots around right now.
Though United has expressed interest in retiring its smaller 50-seaters in the longer run, it can’t afford to lose a big chunk of them in just a few short months. It is not ready for that, and this is going to be painful. The airline has already ended service to a slew of cities since the pandemic began, some due to SkyWest being unable to support an Essential Air Service contract it had directly the feds and flew under the United Express banner, but others are simply an issue of needing to make hard decisions about where to deploy the limited resources that are available. Here are the cities that have fallen off the map.
And now, losing another at least two to three dozen airplane’s worth of flying means hard choices will again have to be made. No regionals have spare capacity right now to backfill to this extent.
American now inherits this airline as a new partner, and presumably it will continue to fly the CRJ-200s until they can fly no more. But then, if Air Wisconsin still has pilots, there is always the ability to go up to flying 65-seat CRJ-700s. That’s far more economical than the 50-seat CRJ-550s that United would have to operate for growth. I have to imagine United was already talking to Air Wisconsin about that.
Now the question is… just how many pilots can Air Wisconsin secure? Under United Express, Air Wisconsin had been participating in the Aviate program where United was getting pilots to come up through the ranks to eventually fly mainline. That clearly wasn’t getting enough for Air Wisconsin to fully utilize its fleet. You have to wonder if American has struck a deal that will provide massive increases in pay along the lines of what it has put together for its wholly-owned regionals. That could help move the needle.
Even if Air Wisconsin can only maintain the same output as it has today, that is a big swing of capacity away from United and toward American. According to American, it offers 30 percent more origin/destination city pairs than its nearest competitor. This move could help widen the gap. At the very least, it will help add more buffer to keep serving the routes it serves today without disruption.
As for United, well, its regional CommutAir just happened to give massive raises to its pilots the day after this announcement came out. I’m sure that’s no coincidence. I know United wants to grow into bigger airplanes, but it is not ready to replace its 50 seaters yet. This is happening too early, and United is going to suffer.
55 comments on “American Snatches Pilots Away From United With Air Wisconsin Deal”
If this is such a big loss (of pilots) for United why did they not renew their agreement with Air Whiskey? Is it that UA wants to fly bigger planes and it couldn’t get the Air Wisconsin pilots trained to fly the bigger planes quick enough so better to ditch them and put their money into hiring pilots already certified for the bigger RJs?
It’s a common type rating for the CRJ-200 & CRJ-700. They would need very little in the way of training.
Gothca. Thanks. But additional training would be required to fly the 170s and 175s.
Ben – Who says they didn’t want to renew it? United may claim this was the plan all along, but I know there were discussions on renewal. It’s possible American just swooped in with a better deal and United didn’t take the threat seriously.
Ooooh well that’s a different story and a bigger deal. Why not stick that juicy nugget in the lede? It makes your argument much stronger!
Ben – They said that publicly in their financial statements that they were both talking to United about a renewal and engaging with a potential other suitor.
it is true Air Wisconsin continued to try and engage with United on renewal talks on multiple occasions. However United’s position on the partnership never changed ever since United advised Air Wisconsin of their intentions to not renew the agreement. Both publicly and internally multiple times to employees in town halls United has repeatedly stated we are not renewing the contract with Air Wisconsin.
It is no different than a marriage where one person files for divorce and the other person now wants to talk and try to fix it. United filed for divorce, Air Wisconsin wanted to talk because without United their survival would have been very much in question. United never changed their mind so here comes American Airlines. It wouldn’t surprise me if American Airlines came in with a low ball offer and Air Wisconsin took it to survive because they don’t want to be the next ExpressJet another regional carrier that couldn’t survive without United Airlines.
One last thing Air Wisconsin has been cutting routes from United’s network ever since 2021 do to their pilot shortage. Although the contract United has with Air Wisconsin is for 55 CRJ200s, Air Wisconsin is actually operating far few than that number. What I’m hearing internally is the number is closer to 35 CRJ200s and Air Wisconsin is having trouble keeping pilots like all the regional carriers.
Also in 2020 United ordered an additional 20 CRJ550 for GoJet deliveries should be finished by the end of this year which will bring that fleet up to 74 total aircraft. Also in 2020 United expanded its agreement with SkyWest as a result of that agreement 25 additional E170/175s are going to SkyWest for exclusive with United Airlines only. United has the airplanes in place (45 new regional jets) to replace Air Wisconsin. The only thing that could set United back in 2023 is the pilots shortage at the regional but again there is a reason why the contract with American says up to 60 planes and that reason is Air Wisconsin doesn’t have the pilots either. If Air Wisconsin can hold on to the pilots they have American get 35 planes not 60. However if Air Wisconsin continues to loose pilots to the majors the number of planes actually flying will be a lot less. Judging by the number of Air Wisconsin aircraft currently not flying for United Express I think United’s decision to walk away was a good one.
Love to Fly – Just a couple points. The American contract is for 40 airplanes with an option to go to 60. Presumably they will go to 60 if Air Wisconsin can find enough pilots and that’s the one issue holding them back. But either way, it seems like the plan will be for 40.
For United, those CRJ550s are going to be really tough. GoJet is having huge problems finding enough pilots and that fleet is extremely underutilized as well. They are in the same boat as Air Wisconsin, so growth for them will be very tough.
Lastly, any new E170/175s from SkyWest cannot be used for growth. United is maxed out on its 70/76 seat airplanes, so these can only be replacements.
You’re probably right about ZW not even flying the fleet they have now.
They aren’t flying some of the routes shown on their website out of IAD at all and some are clearly leftover from Covid and won’t last: a CRJ going IAD/YUL/YYZ/YOW.
Really?
Their IAD operation must be a skeleton, placeholding until Commutair and Gojet can ramp up.
In any case, it won’t affect UA for pilots one way or another because ZW is still going to be in Aviate, something AA does not have an equivalent.
UA has maxed out on larger aircraft as part of their scope clause, so ZW couldn’t fly bigger planes.
I really don’t agree that this is a disaster for UA. Regional pilots aren’t obligated to join the mainline carrier their regional airline contracts with. UA mainline clearly has a substantially more exciting future than AA, and presumably a competitive contract once the new agreement is finalized; there isn’t any evidence that UA won’t be competitive in hiring AW pilots. Yes, this is a little unfortunate for Aviate, but there are three regionals that can likely flex up in how many pilots they hire from Aviate, and I would be shocked if the capacity of regionals to hire was the limiting factor for Aviate. Remember that AA doesn’t have anything like Aviate.
The bigger hit is to UA’s ability to serve 50-seat markets with a robust schedule, but remember, these are probably the highest CASM routes UA has, and UA has much more hub-originating traffic than AA to fill those mainline jets. AA is a lame duck in Chicago, anyways, so between CASM and a likely ridiculously lucrative payscale, the financial hit for this will not be small.
Lame duck in ORD is right.
I don’t agree with this analysis. UA announced last year that they were not going to renew the Air Wisconsin contract, so they had to anticipate that AW was going to partner with someone else. The pilot issue didn’t just spring up this year, so again, I don’t think United was taken by surprise at all. If you’re a pilot at a regional and there is an opportunity at any of the mainline carriers, you’re going to consider the jump, so I think the pilot availability issue is overblown as well.
I had no idea UA dropped AZO.
This deal is also fueling a fair amount of speculation about Mesa’s future with American. If I read Mesa’s most recent quarterly report correctly, Mesa is essentially in breach of its agreement with American. That means the Mesa contract could be canceled at any time. Some of the speculation has also been fueled by American adding seats to some of its PSA CRJ-900 fleet. I’m wondering if Air Wisconsin could possibly work out a deal to buy some of Mesa’s CRJ-900s and fly them for American Eagle. That could be a win-win for everyone. United would have access to more of Mesa’s pilots to staff its E-175 flying with that carrier, and Air Wisconsin could get its hands on some larger aircraft, some of which are relatively new. All of this calls into question the future of regional flying, but that’s a whole topic unto itself.
Ghost – It could possibly be a longer term plan, but it would likely be a stretch. Air Wisconsin would have to stand up a western operation since Mesa is only in PHX and DFW right now for American. That doesn’t mean it can’t happen, but it’s a lot easier to stay in Chicago. I think more likely would be for Air Wisconsin to move into CR7s and operate those in Chicago. Then Envoy could relocate its E70/75s possibly to Phoenix and DFW. PSA could pick up more CR9s and probably put those in DFW. Lots of options with so many carriers, of course.
I should have been clearer. I was merely pointing out the possibility that Air Wisconsin could buy the CRJ-900s from Mesa. I wasn’t suggesting that Air Wisconsin start flying in Phoenix or Dallas. Between the 10 new CRJ-700s in 2023, the 20 E-175s from Sky West that have been delivered in 202–2022, and the added 15 E-170s and 3 E-175s from Envoy, Mesa’s current reduced level of flying could be covered. I think LOL!!
Ghost – Fair enough! They definitely want those Mesa airplanes or their direct replacements because they are grandfathered in with 79 or 80 seats.
Sorry Brett, but for once I disagree with your opinion on this. As a UA frequent flier I’d have to call it a win for United. Air Wisconsin’s regional a/c is trash. That may not sound kind, but it’s the truth. Good riddance. And most of the destinations that UA may lose are really small and not that important to the overall operation. And, I say “may” lose because there may still be ways to backfill them. As for aircraft, don’t forget that UA had so little concern about lacking regional jets that they converted a bunch of CRJ-700’s into more spacious CRJ-500’s in order to offer greater product consistency to premium fliers. They’re pretty nice, btw.
So, yeah I’m going with AA lost on this one by buying a shoestring airline and a bunch of cramped clunker aircraft.
If the Air Wisconsin planes are trash as you described, then it fits right in with AA’s regional ops strategy. They tend to bottom feed for their regional ops…see Mesa Airlines as an example.
Let’s be fair: I’ve flown them quite a few times. They’re small RJs which are, by definition, uncomfortable. But theirs old and worn, every one I’ve flown on has been that way. That’s why I used the word “trash” – these flights are not a great experience. No loss for UA here.
As an aside, I know that the CRJ-500 came to be in part for product consistency and also in (large) part because of scope clause issues with pilots. Just for the record. But they’re still about as nice as a CRJ can get.
Kind of an ignorant comment since AA has the largest fleet of new E175 and CR9s among the US3. But… why let facts ruin a stereotype?
This is not about newness but upkeep. Of course something that comes directly out of the factory is going to be in mint condition. No need to state the obvious. It is the upkeep of the airplanes where everyone is well aware where Mesa fails. I think the only ignorant thing is your lack of being able to comprehend this.
While I agree that Air Wisconsin’s CRJ-200s are cramped, I’m not sure these markets would be easily backfilled by United. The costs of operating a CRJ-550 are going to be higher than that of the CRJ-200, and I imagine mamy of these markets didn’t have much premium cabin demand (otherwise UA would’ve already flown an aircraft that had first).
I doubt the CRJ-550s are United’s first choice for most regional markets. If United had the ability, I imagine they would prefer to fly CRJ-700s with 76 seats to most regional markets. The CRJ-550s probably work well enough that they don’t have to give up clauses on pilot work rules to get the scope relief needed for more 76-seaters though.
Anyways – for UA flyers, this is probably a win unless you live in a community that may lose service as a result. For UA as a company, I expect some short-term pain but not too concerned long-term, though I’m curious if UA would ever consider flying an A220 or something mainline and enable some scope relief.
The other thing I’m curious about: ExpressJet just declared bankruptcy, and presumably there are regional jets and pilots there… (I haven’t followed the details for ExpressJet so maybe they fly aircraft that are too large)
No, the CRJ-550 wouldn’t be a good choice for those small markets. I merely brought that model up as an example of where UA has prioritized action regarding their regional service program. Frankly, some of the tiny markets may go away. Is that a bad thing? For bragging rights, yes; financially, no. But Air Wisconsin covered a lot of service for them that went well beyond the small EAS markets. I’ve flown then fairly recently ORD-FNT and ORD-BHM. Each flight was as I characterized above. And these routes can be backfilled.
Where UA comes up short is having a small mainline jet that could handle the likes of ORD-BHM. This could solve some of these issues. Just dreaming here, but A220s would sure be nice.
ExpressJet had five E140 (or E145). So not that many pilots and AA already has a huge number of them around.
Now I’m not sure if UA would want them… it’s probably too little too late for XJ to be saved by United, tho that’d be a homecoming of sorts…
XJET had 145s, so they’d fit the 50-seat category
Aha! was only operating 6 planes with low utilization so there aren’t many pilots involved
There are two parts to this discussion.
As for the pilot part, it is possible that AA might have scored a win in keeping pilots away from UA if for no other reason than by keeping RJs flying that otherwise would have been retired. Scott Kirby – UA’s CEO – purportedly said (yeah I read it on the internet…) at UA’s pilot training facility that UA wanted to take all of the “growth” pilot capacity in the industry and leave all of the rest of the industry to fight over just gaining new pilots to replace pilot retirements. Whether true or not, UA NEXT requires lots of pilots in order to work and UA does not have them. AA appears willing to throw lots of money at RJ pilots to maintain its RJ network, probably is paying high prices to Air Wisconsin to fly for AA’s network, and, at the minimum, keeping Air Wisconsin pilots off the market hurts UA.
The second part of the equation is about the economics of the flights AA will operate via Air Wisconsin. 50 seat RJ flights have had the highest cost per seat mile of any US carrier fleet type other than the A321T for years according to DOT data. Delta realized years ago that 50 seat RJs were no longer economically viable as a group which is why they went after the 717s which led to dumping hundreds of CRJs. The A220s serve a different function – longer flights than 50 seaters flew making A220s large RJ replacements – and while the 717s have high CASMs relative to other mainline aircraft, DL can staff them and is un-retiring dozens of 717s that it previously planned to park. United also recognizes that it will have a very small RJ fleet flying for it long term; DL uses many of its large RJs in the NE where the economics of largely point to point routes are different than when feeding domestic hubs. AA is betting that RJs of all sizes will work to maintain its domestic network – but they are increasingly unique in that approach – and I am betting they will be wrong. Add in that ORD is on track to have the highest cost per enplaned passenger of any US domestic hub airport and the economics of AA’s move are highly unlikely to work profitably. The real question is why AA and UA are so resistant to buying a small mainline aircraft such as the A220 or Ejet families. And let’s not forget that Southwest has managed to become the world’s most consistently profitable airline by only serving cities that can fill at least a handful of 737 flights/day.
The CRJ200 is called the “Devil’s Chariot” for a reason. UA made the right decision to create the CRJ550’s as it offers a legit “mainline” feel on a small region aircraft. It’s definitely all about the pilots but I can’t imagine UA didn’t have some sort of contingency plan in place, knowing the risk that they may lose the AW contract.
The 550 is a much more comfortable aircraft than a standard CRJ but the economics are not better; they are worse. Specific to pilot costs and availability, it is not likely that UA will succeed in staffing the 550 to any better degree than for their 76 seaters.
Given UA’s non-public statement (to their pilots) that they expect to eventually have fewer RJs than their current number of true large RJs, the 550s won’t be around for many more years.
btw, my gut guess is that DL and UA will either reduce their regional operators to either one or two RJ operators (one Canadair and one Embraer operator) at most and be willing top pay a labor premium to keep them staffed OR will bring their remaining large RJs in-house. that will be much harder for AA to do.
Echoing a few of the other comments here – if this is a blow for United, why would they have publicly announced that they intended to get rid of this relationship?
I have only flown United once in the past 20 years, and it had to be on one of the aforementioned CRJ tubes. Not with Air Wisc., but another RJ carrier. Not sure why United thought is was appropriate to put one of these tubes on a busy route like PDX – DIA. I will never do that again! So, I tend to agree with some of the other comments that perhaps United comes out ahead on this one, particularly if they get rid of some older cramped CRJs in the process that are definitely not helping with the flying experience on their brand.
Yeah, a few years ago, UA was flying a lot of RJs on what I’d refer to as inappropriate routes such as ORD-BWI, ORD-CLE and ORD-ATL. They’ve really made an effort to upgauge those sorts of routes and now even ORD-CLE has more mainline aircraft than regionals. I’d say that they started doing this around 2018 or so, the pandemic froze everything, and now they’re back at it. If it’s a business heavy route that doesn’t make the cut for a mainline a/c (like ORD-STL, IND, BDL, etc) they’ll put a CRJ-550 on the route. Tells you something about the mindset at UA right now.
Disagree as well. UA has stated it’s disdain for the -200 and for AW. Both are terrible and UA was glad to get rid of them.
Lol…. do your research prior to publishing.
Pretty sure Cranky’s more knowledgable than all of us combined.
Why would that be hard for aa to do? They’ve already brought embraer and cRJ in house and control their own costs, paying their wholly owned carriers too in the regional industry, by far.
It’s like you decided to attack AA in your normal fashion but forgot that AA has already done what you suggest will happen. Typical Tim.
That map is a little deceptive. I know for a fact that RST and MLU were dropped last year due to my disappointment of having to fly American to both of those destinations this year, so they’re not part of the AirWis departure.
Frankly, as a United 1K who flies a lot of regional, I’m joining in the chorus of “Don’t let the door hit your butt on the way out” when it comes to AirWis moving to AA. It just reinforces my feelings to avoid AA at all costs. Anyone who thinks this is a loss for United has never looked out of a window at Terminal 2 at ORD and glanced at those 200s run by AirWis. It would be sad if you didn’t have to fly on one of them; it becomes terrifying the moment you enter one and are confronted with something that could double as a prison transport with the FA as chief warden, with an attitude to match.
I’m with StogieGuy in saying that some of UA’s routes could use a small mainline aircraft. I flew ORD – BHM back in January on a regional, and there was a need for an A220. If it must be a regional, then put an E190 on it.
Using unit costs (CASM) as a definitive measure of profitability is flawed. That’s why it’s not considered a GAAP measurement. The big variable is seat miles, and there is more than one way to maximize or minimize that metric. The higher unit costs (i.e., CASM) most airlines are reporting now is because of lower aircraft utilization (fewer seat miles), which skews the number up. A 50-seat aircraft is probably more cost effective over short distances. But what’s often forgotten (sometimes deliberately?) is that shorter trips also take less time, so the aircraft can operate more flights with more opportunities to generate revenue. It’s easy to predict potential unit costs. It’s not quite as easy to predict potential unit revenue, which is at least as important. I’m guessing (and only guessing) that this contract is a short term expedient. In fact, it wouldn’t surprise me to see regional airlines like Mesa and Air Wisconsin consolidate (with each other, or be bought out) at some point in the future.
Another quick point regarding this transaction is that Air Wisconsin’s focus on Chicago will allow Sky West to move some of its current Chicago-focused CRJ-700s to places like DFW and/or Phoenix, where they can supplant or replace Mesa. Sky West is supposed to add 11 more CRJ-700s to its American portfolio next year (for a total of 101). The regional space is changing rapidly. My consistent prediction of consolidation is happening – but via liquidation (See aha!), not mergers.
The DOT is out with its latest air travel consumer report and it shows that AA’s ORD operation is more regional jet than mainline. Same is true for CLT and PHL. UA at IAH and IAD are majority RJs while all ATL, DTW, MSP and SLC are all predominantly mainline.
AA is all-in on the use of regional jets and it is the byproduct of them being unwilling to close hubs as DL and UA did post merger.
All of the reasons you use to argue that CASM is a flawed metric also apply to mainline flights. And yet other carriers do operate mainline flights on segments that are similar if not shorter than AA uses regional jets.
The smaller the aircraft, the higher CASM is; that is just as true for the A319 vs. A321 as it is for the CRJ vs. the CRJ-900. Even the advantage of large RJs is lost when you have to pay six digit bonuses to keep pilots from bailing. It becomes cheaper to have a relatively small large RJ fleet where pilots can prove themselves and then allow the best to move up as quickly as need arises to mainline carriers.
AA is clamoring to hold onto as many RJs as it can to feed hubs that other airlines – mostly DL but UA is hot on DL’s heels – believe they can serve with mainline aircraft which are lower CASM aircraft and can generate far more revenue.
AA is betting on a strategy that no other airline is willing to pursue and which other airlines believe has passed. The chances of AA being right on the bottom line given its financial track record is low.
Way to selectively ignore Delta’s hubs with lots of RJs. AA isn’t all in on regional due to not closing hubs post merger lol. You have some weird bitterness that aa didn’t close hubs even though they said they had no plans to prior and post merger.
AA’s use one of regional is due to the best regional scope clause in the industry.
Sometimes I wish you’d think before you type. Assuming pilots are available, delta and united would love AA’s regional scope but they gave up trying to get it in pilot negotiations and had no other choice.
DL also said the same thing about not closing hubs and, well, MEM and CVG would like a word.
Every airline merger in history has said that same thing about not closing any hubs in order to get the merger approved. Then they close hubs a few years later because there are no repercussions. Tim is probably just annoyed that AA/US actually pulled that off. Of course, the benefit of that achievement is certainly debatable but they actually managed to do it.
first, AA/US was required to keep all of its hubs open to get the merger approved. While they could probably have closed some of them pre-covid, they couldn’t walk away from the local markets. RJs are a good way to serve the local market plus a limited amount of flow traffic esp. when hubs like DCA/PHL/LGA heavily overlap on flow traffic.
second, AA uses over 40% RJs in both DFW and CLT which is high for hubs that are supposedly great for traffic and profits. The reality is neither hub can physically handle many more mainline aircraft without major facility expension. Part of AA’s need for RJs is related to the space it has in its hubs which is particularly astounding given how sprawling DFW is. AA would need 20 more DFW gates to get to the same mainline/RJ percentages DL has in ATL.
third, the difference in the size of AA and DL’s large RJ fleets is roughly equal to the size of AA’s CRJ700 fleet. Delta decided 10 years ago that the economics of the 717 were better than the 50 seater and they drew down the 50 seat RJs. During covid they planned to get rid of the 717s within a couple years indicating that the large RJs were cheaper per seat than the 717s. Now, those economics have changed as DL has been less generous in RJ pilot bonuses and are reactivating as many of the 717s as they can, likely retaining them for 5+ years. AA doesn’t have a small mainline aircraft option so it is very likely that they will pay more for large RJ/small mainline services per passenger than DL.
fourth, AA execs have just acknowledged again what we knew which was that large portions of AA’s network haven’t worked. They specifically indicated AA will be much smaller internationally with a widebody fleet that will be about 60% of DL’s and half of UA’ with far fewer destinations on AA metal. They also repeated that some hubs are not profitable – which is clear by the fact that AA”s net income margin has been in the low single digits even when its best performing hubs were its largest, meaning some hubs are big financial drains. The economics of RJs and the slow withdrawal of many of them and AA’s need for higher profits will lead AA to shrink some of its hubs in time.
We’ve all said our piece – now let’s see how it plays out.
Chicago, Philadelphia, and Charlotte have long been RJ heavy. In fact, I’ve read that CLT has the largest regional operation on the planet.
Question: When did that become a crime?
Please reread what I wrote about CASM. I wrote that it’s a flawed measure of PROFITABILITY. You commonly use CASM as an indicator of profitability. CASM is only a measure of relative unit costs. Obviously, the same fixed costs will result in lower unit costs when spread out over more seats or more miles. Those variables make CASM a poor measure of PROFITABILITY. Stating the obvious, CASM doesn’t take revenue into consideration, which is an extremely important component of PROFITABILITY. Fewer seats also reduce supply which can drive higher revenue (supply and demand is one of the first things one learns about in Econ 101). But obviously, that’s not a guarantee of profitable flights. The airline business is a risky one. No carrier can guarantee unending profits. Even the perfect airline filed for Chapter 11 protection at one time.
American has its problems. News flash: So does Delta. Contrary to your constant assertions, it’s not the world’s only perfect airline. Hubs depend on feed. Feed requires aircraft and pilots. I’m pretty sure all of this is a temporary expedient. Things may be very different at the expiration of this contract. In the real world (as opposed to the world according to armchair CEOs on airline blogs) a company can’t snap its corporate fingers and instantly acquire 40 E-175s, 60 B737MAX8s, or 100 A220s. One can only acquire what’s available. I saw where Mesa has upped its pilot compensation. And Piedmont and Envoy have offered conditional jobs to now jobless ExpressJet pilots without an interview. I hope all of that helps the situation, because, unlike some people, I don’t like to see airlines liquidated.
Julie and Ghost,
It is not a surprise that all of DL’s hubs – ATL, BOS, DTW, LAX, MSP, SEA and SLC – are all now majority mainline flights, something which AA and UA simply cannot say – because Delta recognized more than a decade ago that regional jet economics do not work well in hub operations. Given that fuel prices are higher and labor costs, esp. for pilots is MUCH, MUCH higher and still growing – the chances that regional jets work economically in hub operations now, esp. 50 seaters, is very, very low.
Note that what is missing from DL’s hub list is LGA and JFK – both of which are majority RJs. Part of that is because of the slot controls and perimeter restrictions which make carriers inefficiently add RJ flights just as is true for AA at DCA. UA at EWR is just about half and half but DL now has about 20% more flights at LGA and JFK combined than UA has at EWR. The operational challenges at EWR including of Republic and their staffing has resulted in significant cuts in the number of UA coded flights at EWR. Still, the economics of operating RJs in point to point operations – such as from NYC – are far different than feeding domestic connecting hubs because NYC flights have a much higher rate of local traffic.
The number of regional jets that a carrier uses is directly related to the number of hubs they have because overlapping hubs do compete for some of the same flow traffic; AA has a number of overlapping hubs esp. on the east coast.
And, yes, AA at CLT is the largest regional jet operation in the world at over 300 flights/day. AA at DFW is not much smaller which is why AA has not overtaken DL at ATL as the largest hub because AA uses 3X more RJs at DFW than DL does at ATL, leaving DL at ATL with over 150 more mainline flights/day than AA at DFW.
It isn’t a question of which is perfect or even more perfect. The issue is simply that AA has many more regional jets than DL – which is consistently more profitable – and UA, which has decided that it has to aggressively move away from regional jets to mainline aircraft but will not be able to support many routes and frequencies in the transition. Even AS is increasing the percentage of its mainline flights.
The regional jet transition has already taken years and has not reached a stable endpoint. AA thinks it will gain a competitive advantage by holding onto more regional jets longer and whether that ends up being successful esp. in economic terms is far from clear.
United has a long history of telling regional carriers to take it or leave it.
Anybody remember the Atlantic Coast Airlines debacle at IAD? Their CEO, Kerry Skeen, tried to play hardball with United which told him to pound sand. He then decided to execute his ridiculous plan to convert ACA and its horde of 50 seat CRJs into standalone carrier Independence Air. 16 months after starting, independence filed for Chapter 11 then closed the doors entirely 2 months later. Great plan.
I’m sure there were some temporary hiccups for the United small town operation at IAD but they seemed to backfill everything before too long.
I’m still bitter because IAD was going to be JetBlue’s Boston before Boston. Then they saw the bloodbath that was about to occur (United matched all of Independence’s ridiculously low fares and also ran very significant frequent flyer mileage promos) and significantly backed off at IAD. Too bad, a major operation at IAD might have made BY a more diverse carrier.
One glance at the cities flown to by Air Wisc and my first thought was that most of those should never have been on a 50 seat RJ to begin with.
I think United will be fine with upgauging to mainline. As far as AA flyers are concerned, you can see what value the company places on passenger satisfaction with this arrangement.
Your last paragraph where you state United is looking to grow into bigger airplanes and this is happening way to fast is not correct at all.
Of the US3, United Airlines is the only carrier that has actually grown its narrowbody fleet during the pandemic. The only narrowbodies United retired during the pandemic was the Pratt&Whitney engined 757-200s. I think there was only 13-15 remaining in the fleet. United has taken delivery of more than 15 737-9, and 737-8s. Also beginning in either April or May of 2023 United’s first A321NEO arrives remember United order 70 A321NEOs, That order isn’t to be confused with United’s separate order for the A321XLR.
The assertion that this is happening way to fast isn’t correct at all, we have more narrowbodies in our fleet 2022 than we had in 2019, and we will have even more narrowbodies in the fleet come 2023 when the contract with Air Wisconsin ends.
I get it is more salacious to say American Snatches Pilots Away from United with Air Wisconsin Deal but nothing could be further from the truth. United has been working towards reducing the number of CRJ200s in our fleet for years. American didn’t snatch Air Wisconsin away from United. It was United who decided to terminate the agreement with Air Wisconsin.
CF IS right. The number of mainline aircraft is not the point. The point is the total number of aircraft an airline has to schedule its network NOW – not 2 years from now.
Alot of these small and medium sized cities cannot support large mainline aircraft; at best UA can use A319s but those airplanes are old and won’t last long.
DL committed to using 717s to serve small cities and many of the cities on Air Wisconsin’s route map are served by DL mainline aircraft. AA has some mainline aircraft in some of these markets to other hubs besides ORD – which does help the economics of using RJs in small cities. UA will have fewer regional jet aircraft available to it AND have fewer viable small mainline aircraft.
Add in that ORD is less than an hour’s flight from many of these cities and the economics of even large aircraft are challenging unless you have a very large hub- which is what DL has at ATL. DL can fill a 717 with 100 connections because of the number of flights through the hub.
ORD’s challenges are compouned by the fact that AA and UA are both operating hubs at the airport which diminishes the abililty to put alot of capacity into the market without pushing down fares.
UA Next already runs the high risk of depressing fares because of the increase in capacity across UA’s network – and when you factor the US is either in a recession or likely heading into one, that is not a great position for UA.
UA very likely will be refocusing away from smaller cities but that just means it will lose one of the features of being a large network carrier, something that differentiates the big 3 from low cost carriers. Given that UA”s network is already more competitive than WN, DL, or AA’s due to more competitive hubs, it is far from certain that UA’s shift to a more mainline operation will increase profits.
It seems like the regional carrier pilot shortage will be the most intense this year, as mainline airlines are hiring record numbers of pilots in 2022, partly to make up for years of not hiring.
Hiring will continue for years to come, but not at 2022’s rate. This will allow the regionals to build their pilot numbers while not losing record numbers to mainline counterparts. Even SkyWest said, in one of their earnings calls, that their pilot situation will stabilize next year.
Also, I haven’t heard much about the SkyWest plan to start an operation with 30 seat CRJs, allowing them to be operated by an FO with less than 1,500 hours otherwise needed (flown with a more experienced captain). This should allow some markets with low seat factors to be operated by these planes, helping to alleviate the impact of pilot shortages.
People don’t get there is going to be a 50-seat market bloodletting in 2023 or 2024.
OO is going to be done with all their CRJ’s except a handful for EAS service.
There are no CR7’s in production to make into new CR550’s.
All 3 mainline carriers are essentially at their 76-seat plane scope clause maximums. Any new EMB-175’s are going to replace CR7/CR9’s, not CRJ’s.
UA has a bit of a hint here. They bought a pile of used 737-700’s and A319’s and standardized configuration of both of them at 126 seats. But they are old, old, old.
So either UA and AA are going to let anything below 150-ish seats, the 737-800, wither and die, or there is going to be something big happening. As it stands now, 5 years from now, all three mainline carriers would have a bunch of EMB-170/175/175SC, a maybe a handful of CRJ’s and EMB-145’s for EAS, and UA will have its funky CR550’s. That’s it.
The TRI’s, ERI’s, and DHN’s of rhe US are in deep kerosense. There simply aren’t going to be enough EMB175’s to go around. The 125-ish segment aircraft are aging out with no expressed interest in replacements. Some current 125 seat markets will upgauge, freeing up some 125-seaters to upgauge 76 seat markets, but that’s a huge jump in seats as is going from 50 to 76 seats. And as the now-available 125 seaters are old, it’s only a stopgap measure.
AA has a fair number of A319s and they added more from Frontier just before the pandemic…
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