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Exactly. The problem is that the large airlines used regionals to cut costs. If the regionals paid mainline wages and benefits then this problem would go away. Quality of life for pilots/other regional airline workers would be higher and flights that would truly make a profit on the routes they are flying would operate. Those that are not financially viable would go away. Airlines want to pay less than bus driver wages to employees at regionals to provide cheap feed. This may have worked in an era of very cheap oil and an oversupply of workers. The economics of this model no longer works.

AS is finding that they can not provide cheap feeder flights through QX and are trying to outsource to Skywest but this only bides them some time. They are not willing to radically change the model and they are not being honest with their customers by pretending this is a short term issue when it is not. The AS/VX pilot arbitration was supposed to be concluded this month according to the last earnings call. If the AS/VX pilots get a substantial raise, this only widens the gap with QX and makes it that much more undesirable to stay with QX for the long term. With full bonuses paid out in a year, the best case scenario is that people will take the training and the bonus and head to a better paying gig a year from now.

AS had a good thing going and now they are alienating some of their best customers and not serving their VX customers either. They also keep saying that everything is going smoothly and there is nothing to see here. I don't see this ending well for them--especially with their desire to expand from California at a time when they have no resources to do so without negatively impacting their core pre-acquision markets.