No, Losing Air Wisconsin Regional Jets Isn’t A Blunder By United

Air Wisconsin’s fleet of around 60 small metal tubes will shift from flying as United Express to American Eagle starting in March.

  • These “CR2” 50 seat regional jets are among passengers’ least favorite
  • But offering flights on these is better than not offering flights

    There’s nothing for American flyers to be excited about here. United has presented its plan as flying with bigger, more passenger-friendly planes. Which one is the better move is basically a bet on a different business, and we’ll have to see which proves out right.

    Cranky Flier sees the deal as a coup for American because pilots are in short supply and Air Wisconsin has pilots, which means flying American couldn’t otherwise do and now United can’t do.

    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.

    This seems to me wrong. Arch Capital, which held a big stake in Air Wisconsin, told investors in February that the airline had only five quarters left of revenue in the United deal before it expired, and that United no longer wanted these planes under the United Express banner.

    United has been talking up moving from smaller regional jets to larger ones for some time. The idea that United “can’t afford to lose” a big chunk of the Air Wisconsin fleet of CR2s simply doesn’t comport with what United thinks or else United wouldn’t have decided not to extend the deal for these planes.

    Would United have taken the pilots and had them fly bigger (CR7) planes as Cranky later suggests? Perhaps, though United is constrained in the number of larger regional jets it can fly. But that argument contradicts his claim that United can’t afford to lose the small jet operation.

    • United chose not to renew the Air Wisconsin contract. That’s why Air Wisconsin is doing this deal with American. In fact without anyone to fly for, but still with the costs of its fleet, it likely offered a very favorable deal to American.

    • American gets cheap regional feed, and that’s a plus when there aren’t enough pilots to operate planes especially at regional airlines. They’re basing these planes at Chicago O’Hare, where Air Wisconsin already operates. That’s fortuitous for another reason – Chicago hasn’t been a profitable hub for American, but it’s also an asset they cannot walk away from. Flying contracted small jets is cheaper than flying mainline aircraft.

    • On the other hand, downgauging O’Hare flights relegates American to continued unprofitability – these are high cost planes on a per seat basis, less total cost for the flight but higher cost per passenger. The product is also less appealing than what United will offer on most routes with overlap.

    This is a strategic play for American to maintain an operation in Chicago at lower cost, and it is a strategic play for United because dropping Air Wisconsin and smaller regional jet flying is exactly what they have wanted and planned. United has more opportunity in Chicago than American does, so flying bigger planes is attractive. United’s challenge here is an inability to operate more regional jets with more passengers until they grow the mainline fleet. Longer term there is more upside to United than to American, though it’s possible some United routes will not remain viable with larger aircraft.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. If I’m not mistaken, UAL is planning on taking on dozens of new 737MAX airplanes by March of 2023 (the end of the ZW contract). They aren’t losing lift by giving up the contract, they are just growing slightly less.

  2. Satan’s chariot! But they do serve a market. Delta was (is) notorious for charging $1000 or more for MSP to DAY (few hundred miles) and these were always pretty full.

    Funny, I recall flying to Dayton weekly for a few weeks one spring – the FA that was working these flights was 6’ 2” and had to duck in the cabin.

  3. CF covered the issues well but just to add on top of your comments…

    UA’s CEO told his pilots (purportedly) that UA’s RJ fleet (contracted) will be about 150 aircraft in not many years. He might be sweet talking the pilots to get them to sign a contract (he is also talking about a 100 plane widebody order both of which are music to any pilot’s ears) but the size of UA’s RJ fleet is going to shrink.

    DL has done a better job of transitioning many of these cities to either mainline or to large RJs – which is the only viable way to serve these markets.

    AA is betting that a ton of RJs connecting to multiple hubs will give it an advantage but WN decided years ago that it would only serve cities that could provide enough passengers and revenue for a handful of 737 flights/day.

    UA might transition some of these small cities to A319s – AA has done it from DFW – but neither AA or UA is interested in small RJs.
    UA doesn’t have hubs the size of AA at DFW or DL at ATL so using mainline aircraft doesn’t work as well for UA as it can for AA or DL.
    DL is resurrecting 717s in order to fly as many as possible probably for another 5 years plus (they are DC9s so will fly forever) DL can staff its 717s and they are more economical than 50 seat RJs and most likely even large RJs given the bonuses that regional carriers are having to pass out to attract pillots.

    AA will keep its ORD hub afloat – but perhaps at the cost of even more losses while UA might have a hard time serving alot of small cities given that it is ordering so many large narrowbodies and its A319s are pretty old already.

    In terms of small city economics, I am betting DL will get it the most right while WN will just steer clear.

  4. I will NEVER miss sitting on a CRJ-200 regional from IAH…. Though the ERJ-145’s are just a little better since I can book the 1 side of the 1-2 configuration… these planes (both) are severely under maintained form a cabin comfort point of view…. The airlines 100% know it…

    I know this is contrary to what the airlines felt in the past… But I would rather fewer(time slots) options flying into regional airports with something like an ERJ-170/175 or CRJ-500/700 or even a a319/B737-700 than more options with a CRJ-200 or an ERJ-145…. I will always book around comfort; at least for reacquiring travel.

    Currently… I’ll pick the ERJ-175 from IAH any time of the day over that other again crap… the plane is better…

    3A is golden 🙂

  5. Greg,
    maybe or maybe not.

    UA needs a whole bunch of pilots. Cranky addresses that AA might have retained pilots that UA thought they could pull over to help staff all of those MAXs.

    Kirby tried to push a dud of a contract over on the pilots and they didn’t buy it; Kirby is trying desperately to get the pilots to join UA because there is no way he can staff those MAXs at the present trajectory.

    Kirby also reportedly said that UA intends to gain all of the growth pilots in the industry while leaving the rest of the industry scrapping for what is needed just to offset retirements. THAT is a ballsy and likely unlikely scenario.

    So, you might want to sit tight on your predictions of UA’s grandeur.

  6. Airplanes that “are among passengers’ least favorite” is a complete brand fit for American Airlines.

    Good of United to weaken competitor American while improving its product offerings. Strategic masterstroke.

  7. What happened to the BLM movement? You don’t hear much about it anymore. Did anyone ever really care or was it just a marketing play that has now grown old?

  8. United is having no trouble recruiting pilots even with current uncertainty as to a new contract. They’ll be able to staff the incoming 737s/A321s.

    The real question is whether the remaining regionals can staff theirs.

    Also, I’ve said this elsewhere, but the notion that the ZW deal is part of some sort of expansion for AA is nonsense. They are transitioning the 145s out of Envoy to Piedmont, and Piedmont isn’t in Chicago. Envoy will eventually be all-170/175s. This CPA is all about replacing much of its 50-seat capacity (currently on Envoy 145s) out of ORD with a less-desirable, but likely cheaper platform in the same category.

    On the other hand, UA really wants to get out of 50-seat flying, so what it can’t cover with existing regionals or upgauge to mainline will be cut. Some markets will lose service but United has already cut its regionals so deeply (not just EAS exits… UAX contractor utilization of existing fleet is painfully low) that I don’t think it will lead to some kind of mass market exodus.

    Clearly this is something intentional/strategic on the part of United, and AA is opportunistically using the cheap lift offered by a distressed ZW coming down from the UAL CPA to restructure its own regional operation.

  9. ORD is absolutely not, unprofitable for AA .. not sure where you got that idea from … but again, this hack of a blogger has nothing positive to say about AA .. they make money there, and give UA a lot of domestic competition.

  10. If you’re traveling on a regional jet you are flying to a s**thole city. Get out ahead by not getting there in the first place. All desirable cities are connected by mainline fleet and the best city pairs have lie flat seats.

  11. I have a flight booked with united on air Wisconsin next April. What will happen with that flight? United is the only one who flies nonstop from Ord-CAE

  12. For an hour long or less flight CRJ2 or ERJ145 are about the same, it’s just getting me to the hub for the main flight and keeping small businesses and small and mid-size cities connected. UA’s strategy lately has been what AA did back when Kirby was over their. UA is still a mess. AA is finding it’s strategy and footing and DL has peaked and in on the decline. I keep AA/AK and DL as my go tos and SWA if I MUST. UA is never an option.

  13. To echo others, UA will be fine with its pilot numbers. They have hired record numbers this year and will be set up well for 2023 and beyond. All mainline carriers are in good shape. The issue will be with the regional carriers and what they can staff, but even those should stabilize by next year.

  14. 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.

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