Originally Posted by
neville_nobody
How sustainable is that kind of arrangement in the longer term? Just about every regional in the USA imploded under that model ultimately because they couldn't crew flights because they didn't pay enough. These weren't small operators either, some of them were bigger than Australian domestic carriers.
Big differences between QQ's arrangement and the US commuter carriers. Most of the regional guys in the US are effectively just labour hire and operations guys because in most cases the aircraft are owned by the contracting carrier. That makes their labour costs the only real defining factor against each other. The parallel here is when Cobham operated the 717s for Qantas.
By contrast, Alliance own their E190s, so they are providing an asset as well as the labour for Qantas. If Qantas were to walk away, QQ would just flip the E190s into their mining operations to replace the F100s, or send them across the road to do some flying for Virgin, or do whatever else they find for them. Sure, the Qantas deal will take up most of their E190 fleet's time, but it is not the only string to their bow. They are getting to a size where their marginal costs will come lower and will be hard for any other carrier in Australia to beat across the mining charter, wet lease or other operations.