The Boyd Group On Rj's

[BoeingBoy]

The Regional Jet - Economics Getting Dicey?

No, RJ's aren't going away. At least not for several more years. But as fuel, labor, and maintenance costs go up, combined with increasing downward pressure on fares, the mission envelope for these machines will start to contract.

We are talking about regional jets - the 50-seaters (and the stretched CRJs) - not the new Embraer E-Jets that media lightweights try to lump into the regional jet category. We've taken a look at the estimated costs mega-carriers are paying per ASM for RJ flights, and the picture isn't real pretty. To be sure, there will be a continuing role for RJs, but in a world of $35-a-barrel ole and low fare carriers cherry-picking big markets, that role may be smaller than a lot of earlier projections indicated.

An analysis of estimated ASM costs of RJs in various flight segments indicates that for long-haul (1,000 miles or more) about 12 cents is the best that can be expected, all-up. In mid-range missions, 500 to 700 miles, figure 15 cents to 17 cents. And in short missions - under 300 miles, the costs go bonkers. Yes, the total segment costs of flying an RJ are much less than a 737. But the tushies in the RJ seats still have to pay the freight.

------

This is the entire RJ bit, but it is found here

Jim

 

[Flying Titan]

Saw this on his website and found it pretty interesting.

I was kinda thinking the same thing. U is moving from Dash-8s to RJs on many routes and that means higher operating costs. Hopefully, it will also mean more people in the seats. It also makes me wonder if the new version of the Dash-8s (the Q series - supposedly quiester, faster, and more fuel efficient than older Dash models) would make more sense. Didn't Horizon swap out several CRJ orders for the Q400? I wonder how those are being received by passengers - if the new Q planes are still suffering from the turbo-prop stigma?

On the plus side for U, the higher costs of operating an RJ will certainly make it tougher for Independence Air to compete when it launches this year (this summer?). They may have to charge higher fares than they promoted in their announcement last fall.

 

[funguy2]

I am not sure if Horizon's order was a swap of CRJ-700 deliveries or in addition to... But Horizon/Alaska seems to use the 70 seat DH8 Q400 on routes with little or no competition (i.e SEA to BIL) and on the SEA-PDX/GEG "shuttle" (surprising to me), and use the 70 seat CRJ-700s on more competitive routes to California and places where Horizon supplents Alaska (PDX to California mainly).

Given US Airways system, I am not sure how many places are not under attack in one form or another (i.e. LCC's attacking major markets, other legacies attack smaller Express markets like Comair to BGM, etc).

US Airways needs some RJ's just to be at the same level as other competitors... Just look at the LGA-Upstate NY market... Quite a number of Dash-8 and Saab's in the mix while the competition (CO and JetBlue) run RJ's and A320's.

I don't think they are the silver bullet solution, but I do think LGA-BUF and ROC need to be on jet equipment, as an example.