Company witness Jerry Glass, recognized as an expert in labor relations, states that he has done extensive labor and HR consulting for various industries, with heavy emphasis on RLA airlines and railroads. Mr. Glass states he is Envoy’s principal labor advisor, and has represented it and other airline managements in over 200 collective bargaining relationships.
Supplementing the testimony of other Company witnesses, Mr. Glass testified that all regional air carriers win flying from mainline carriers through a cost-based bidding process. Carriers with the lowest costs are awarded the purchase agreements. In support, Mr. Glass cited anecdotally Air Wisconsin’s loss of Delta’s flying based upon that regional’s high cost structure. A similar fate befell Comair, a wholly owned subsidiary of Delta which ceased flying after losing all mainline carrier flying in late 2010. Sky West, on the other hand, is highly competitive because of its low costs. It has flown for American since 2012 and in 2016 was awarded additional flying. In sum, according to Glass, the fact that a regional is wholly-owned by a mainline in no way assures it will get it parent’s business, and history has shown it has absolutely no competitive advantages solely on that account. Glass says the regional airlines that are growing due to their low costs are Compass, CummutAir, Mesa Airlines, PSA, SkyWest and Trans States. Those which are stagnant or shrinking include Envoy and Piedmont, both owned by American. Thus, in 2011 Envoy had 304 aircraft; today it has 152, its fleet size reduced due to stiff competition from other regional carriers who fly for American, while SkyWest has grown from 294 to 358.
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