Too many RJ's?

Re: Too many RJ\'s?

I think if the 737 was better then that is what most the airlines would have and not have regionals flying RJ's. I am sure the mx cost is less also. Regional employee's in just about every job make less than the majors. So I am pretty sure the mx labor is cheaper there also
 
Re: Too many RJ\'s?

Per hour operating costs of the RJ are from what I understand higher than the 737 or 717. However, the crew costs are where the savings are found. That's the point I'm trying to make. The only reason for this "RJ evolution" is because of the massive amount of regional jobs that have been coming about. There will be plenty of regional retirements in the future, that's for sure.
 
Re: Too many RJ\'s?

[ QUOTE ]
Szuluka where did you see those numbers? I did some figuring and came up with ---

An RJ burns 1/3 of the fuel of a 737 (2800 lbs/hr vs. 7700) and carries more than 1/3 the people. But of course the biggest savings is in LABOR.

(numbers approximated)
average 737 crew makes:

capt $150 fo $85 fa 3x$35= $340/hr

average crj crew makes:

capt $60 fo $28 fa $22 = $110/hr

less than 1/3 the cost - 50 seats .vs. 128 (average seat load with 12 first class seats)

I don't have MX costs available but I can't see how it would cost more to maintain an RJ than a 737

[/ QUOTE ]

Ok John, now let's do math with apples v apples.

To fly the same number of passengers (roughly) you'll need 3 RJs to do the work of one 737 (your numbers). That means crew costs are now $110 x 3 ($330), but because it's three airframes we're dealing with now you need more pilots. What's the number I hea,r something like you need eight pilots for every one airframe (4 crews). Ok so we have four crews for the 737 but we now need twelve crews for the RJs. This doesn't mean all twelve are flying all the time but they have insurance and basic line guarantees and they cost the company money if they ae flying or not. Fuels costs we'll call even but, again, since you have three separate airframes to maintain you're probably going to need a few more wrench-heads to keep those 'frames airborne.

Now factor in the fact that you're trying to cram three aircraft into the same gate one aircraft used to occupy (for any given time slot) and you'll see that sooner or later the cost and efficiency of the RJ rapidly loses it's luster.

And yes RJs may mean more pilots but only if a) the airline survives and b) the pay for all those RJ pilots suck ass so is it really a good thing for pilots?

What drives me batty is as soon as someone starts questioning the RJ a lot of folks immidiately start defending it.

Look folks there is a role and a need for RJs – no one is saying there isn't. But when] demand goes back up – and to say the days of wide-body trans-con flights are over is way, way premature; the airline industry is cyclical thosedays will be back – airlines are going to need bigger jets again.

The problem here is airlines are putting too many of their eggs in one basket by loading up on RJs because when the time comes that more people start flying again these airlines will be strapped with tiny jets. That is the point; this isn't an argument about the validity or usefullness of the RJ it's about whether or not airlines have saddled themselves with low capacity.

[/sermon]
 
Re: Too many RJ\'s?

Amen!

Let me point this out as well: The CASM for our SF-340B is 20 cents per mile. For ATA's 737s/757s, it's around 6 to 7 cents per mile.
 
Re: Too many RJ\'s?

Enter the EMB170-190. Thatll be the new wave of the future. CASM mean little. Sure the 757 may have a lower CASM but try putting it from STL-MKL and you wont make any money. Someone meantioned aircraft per gate. Look around at airports like LGA and CVG and youll see how tight they can pack RJs. When demand goes up, hopefully we will see larger Mainline aircraft in the hubs and RJs doing some point to point hub bypassing.
 
Re: Too many RJ\'s?

Might be a bit naive, but here's my take... an airline's primary source of income on any particlar flight is variable and completely dependent on the number of seats they fill, while operating costs on any given route are usually well estimated and known before the flight. The more seats a plane has, the cheaper it is fly (per seat mile) ..... assuming all the seats are filled. As such, I would think that a 737 is cheaper to fly when all the seats are filled compared to a fully booked RJ flight. However, not all routes require the seat capacity of a 737 and are more suited for an RJ. As a result, I think it would also be safe to assume that a fully booked RJ is cheaper to operate than a 737 that is 1/3 filled.

I have absolutely no idea what the actual operating costs are for an RJ or 737 and am just making some really high-level assumptions. Does this make sense, or am I out in left field?
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Re: Too many RJ\'s?

pilot602 good post but a few competing arguments.

Most airlines have 5.5 crews per 737, where as most regionals are in the 4 - 4.5 range for CRJs. Not really sure why but I have an idea.

Also, capacity of 3 RJs is 150, which is higher than 128 in a 737.

The "no middle seats" advertising worked great for Comair, btw.
 
Re: Too many RJ\'s?

I would venture to say that you will sell more seats on the three RJs as opposed to the one 737 due to departure times. Three RJs will more have three different departure times thus catering to more travelers. I know if an airline has my time that I need, I'll go with that time regardless which plane it is. If that airline doesn't have it, I will choose some other airline (if I can).
 
Re: Too many RJ\'s?

So true!!! I was a ramp agent for ASA. Very interesting even a station like Tulsa we needed to be current on 3 airlines. Work in the same conditions as our friends at American. The difference is the pay scale was very different. We received "out station" ramp pay which had increases in cents not dollars. All regional airline employees earn a lot less no matter what position or time with company.

Being in Dallas there is no way the larger jets (MD88, 737) could even fly into many airports.

These two points are arguments for regionals and the need for more planes. The biggest concern with the CRJ 700 was mtc and not loads.
 
Re: Too many RJ\'s?

Well the -700 from buddy who is a FO on it says it has it new airplane model bugs.
 
Re: Too many RJ\'s?

[ QUOTE ]
Of course there are too many RJs. They need to get rid of some, and replace them with the higher paying decent mainline jobs. That's just my take on the subject.

[/ QUOTE ]

The 50 seat RJs are entierly a symptom of too many hubs established in the 80s. This left too many hub carriers chasing the same customers. So to keep frequencies up they had to have small jets.

The solution will be industry consolidation, half the hubs, and the e-jets (100 seaters) doing the flying to smallet markets.

Of course this means fewer "mainline" jobs but the ones left are flying for profitable companies.
 
Re: Too many RJ\'s?

Another article:

[ QUOTE ]
Are regional airlines headed for a tumble?
By Barbara De Lollis, USA TODAY
The launch of low-cost carrier Independence Air next week could signal the beginning of the end of what has been a golden era for regional airlines. For the past five years, small carriers like the owners of Independence Air have prospered as the industry's bigger players have flirted with collapse.


[/ QUOTE ]

USA Today article
 
Re: Too many RJ\'s?

I am waiting to see at Delta how they are going to "redesign" the system we use, hub and spoke.
 
Re: Too many RJ\'s?

[ QUOTE ]
I think the big 6 airlines will continue to lose ground to the smaller carriers that fly narrow bodies and the big six will eventually figure out that their bread and butter are the international flights which will for the most part be run with "heavy" aircraft. I think time will show that the 7E7 will be a huge winner in this market.

[/ QUOTE ]

Some good points but: There will be no "Big 6" sooner than you think. This will lead to fewer hubs which will mean bigger airplanes feeding the remaining hubs. Hub and spoke is a necessary and potentially profitable undertaking once the competition gets rationalized. So the "bread and butter" of the "big 2 or 3" remaining will continue to be small and mid size markets AND longer haul, including international.

Job outlook shaky short term during the transition as a lot of pilots will be put on the street. Then should pick up briskly again. How long this will take is probably a function of the economy.
tongue.gif
 
Re: Too many RJ\'s?

Our new CEO at Delta even said in a memo that he suspects in the near future there will be only 2 maybe 3 major airlines. He said American will be one and he hoped Delta would be one also. I know that some of that is to try to get the pilots to budge some and everyone else to kinda panic and find ways to cut cost. But I really think there will be just a few majors in less than 10 yrs
 
Re: Too many RJ\'s?

``The industry is migrating toward bigger planes and fewer hubs,'' Baker said.

With business travelers reluctant to pay higher fares, the higher unit cost of flying the 50-seat jets is a less profitable proposition, said Mike Boyd, a consultant with the Evergreen, Colorado-based Boyd Group.

The cost for flying each seat a mile is between 25 cents and 30 cents on routes 200 miles or less and falls to 12 cents on routes longer 900 miles, where comfort becomes an issue, Boyd said. By comparison, East Coast rival JetBlue's unit cost was 6 cents for the first quarter.

Delta's contract with the pilots has limited the use of small jets to prevent the airline from moving pilots from higher- paying jobs at the main airline to lower-paid work at the Delta Connection carriers. For example, Delta can only fly 57 of its 70- seat jets.

Bargaining Chip

Additional restrictions on regional jets at Delta Connection may become an issue with pilots as the airline seeks concessions of $800 million, Baker said.

In 1992, 20 small jets operated in the U.S. and most carriers used turboprop planes on shorter routes, according to the Regional Air Service Initiative. Now, U.S. airlines fly 1,368 regional jets, the manufacturers' group said.

Passengers initially welcomed the new small jets because they offered more comfort, speed and perceived safety than the turboprop planes they were replacing on shorter routes. After the Sept. 11 attacks reduced demand, airlines introduced the smaller jets on longer routes, replacing larger planes.

America West Holdings Corp., parent of America West Airlines, phased out 12 regional jets last year as it cut flights at its Columbus, Ohio, airport hub. US Airways Group Inc. said in May that it would reduce flights at Pittsburgh, the base for its MidAtlantic Airways regional-jet operation.



To contact the reporter on this story: Lynne Marek in Chicago at lmarek@bloomberg.net

To contact the editor responsible for this story: Steve Geimann
in Washington at sgeimann@bloomberg.net
 
Re: Too many RJ\'s?

Ladies and Gentlemen,

I certainly hope you have learned by now not to take on faith anything written in Pie Chart Today, er I mean USA Today!

The future is very bright for RJs, or SJs as they are now being called.
 
Not ENOUGH RJs

I dunno about this. It would seem to me to be a lot cheaper to get your personnel current in a sim as opposed to a revenue flight.

No, I think that the 777 was chosen, as were the RJs, for economic reasons. More butts in seats mean more money, once you get past the break even point of profitability. Sure, it's easier to make an RJ break even, but when comparing one full RJ to one full 777 or even one full Jumbo, the return on the investment of equipment, fuel, and payroll hours is much higher for the larger A/C. If you have to have two, or even three, RJ flights to match the revenue of one full 777, you have doubled, or even tripled, your operating costs. So, you might have the same revenue, but you would have significantly less profit.

Where the airlines have it wrong is with the concept of the business traveler. It seems that airline strategists feel that every business traveler is an upper management type who doesn't have to explain his expense reports to anyone else in the company. This just isn't true. The VAST majortiy of business travelers are lower level stiffs, I know because I am one of these lower level folks in my company, who get chewed out by their boss or department head if their flight wasn't the absolute cheapest one available. For the segment of the business traveler market that I represent, the RJ just makes the most sense. More flights, more times, less cost.

One additional pressure coming in the near future is the Air Taxi idea springing up with the new light jets. If, as the president of a reasonably profitable company, I can have one plane to take four or five of my top level people to wherever I want, whenever I want, for the price of four or five first class tickets on a mainline carrier, I have an easy decision to make.

Sorry guys, but until the market will support a significant increase in fares, which might not EVER happen, the main focus of the airline industry will be to reduce costs. This will produce a steep spiral on customer service, and as has been pointed out elsewhere, increasing efforts to 'squeeze blood out of a turnip' with regards to labor relations across the spectrum of airlines, low-fare or not. The days of a grossly compensated, only three trip a month, mainline captain are going to be memories only.

wink.gif



Just my semi-lucid thoughts.
 
Re: Too many RJ\'s?

[ QUOTE ]
Ladies and Gentlemen,

I certainly hope you have learned by now not to take on faith anything written in Pie Chart Today, er I mean USA Today!

The future is very bright for RJs, or SJs as they are now being called.

[/ QUOTE ]

Possibly, if you are flying the right SJ for the right company at the right time. The idea that all the "regionals" come through this consolidation unscathed is pretty "pie in the sky" IMO.

But, good luck to all.
smile.gif
 
Re: Too many RJ\'s?

Well one advantage might be more flights over the same route from a customer point of view, better selection of flight times say 10 -15 RJ flights a day vs 1 or 2 larger aircraft flights.

For some reason the answer that seems to be poping up about the question of 'Why are regionals getting rid of prop aircraft?' is that because customers don't like flying on them, and from a financial point of view that seems like a pretty stupid answer to be buying and operating more expensive aircraft to me. Although regionals seem to be having higher profit margins than the majors so who am I to talk?

But I do know larger aircraft offer lower costs per seat than smaller aircraft, however there is the problem of airport size and what not. There's no simple answers.
 
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