Push has come to a sharp-elbowed shove as major airlines flex their muscles to wring costs out of their regional airline feeders.
As it is usually the majors that provide the aircraft and set the routes and schedules for their regional partners, they have all the leverage they need to make this cost move. The starkest example of the trend comes from the upper Midwest, where Northwest Airlines went so far as to threaten to ground the regional jets that bring in 40% of revenue to Mesaba Airlines, an independently owned Northwest Airlink feeder.
Northwest's threat came as Mesaba and its pilots were facing off with each other over a new contract. The weight of the Northwest threat played a major role in the dispute, says Mesaba. Pilots charged that Northwest was "whipsawing" them, and Mesaba came within hours of a pilot walk-out. The pilots, represented by the Air Line Pilots Association (ALPA), voted 66% in favour of the new contract, which includes pay raises of up to 26.7%.
Like the other majors, Northwest is playing tough as it re-evaluates its relationships with the regional airlines. Following the crippling pilot strike against Delta Connection's Comair in 2001, majors are no longer willing to rely on one regional airline at a hub. In moving to lessen its reliance on longtime partner Mesaba, for instance, Northwest assigned 34 new Bombardier regional jets to Pinnacle Airlines instead. Northwest has also assigned new routes to Pinnacle - including one between Duluth and Detroit, in the heart of Mesaba territory.
Similarly, Delta Air Lines has mixed Comair service with Atlantic Southeast Airlines service, also adding a number of independents, such as Chautauqua and Atlantic Coast, to the mix. A Delta order for 45 new regional jets for delivery between 2005 and 2007 will be assigned to one or the other depending on how much it cuts costs. Regional aviation consultant Doug Abbey of the Velocity Group says "it's leverage, and they use it. It's a cutthroat business."
But regional growth is so strong that the majors cannot avoid an increasing dependency on their feeders. Scheduled regional jet services have increased nationwide from 10% of all flights in 2000 to 25% at the end of 2003, according to data from Department of Transportation inspector general Kenneth Mead.
DAVID FIELD WASHINGTON
Source: Airline Business
