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Small Communities will have to Drive or take Amtrak
Major airlines are phasing out small regional jets according to this recent article. Communities in the midwest will have to drive miles out of their way to Denver or Chicago, or other ares to major hubs. With this, there will be no more express flights serving South Dakota to Denver for example, so people from South Dakota will have to drive to Denver, in some cases the wrong direction to their destination. Ridiculous what is happening to the airline industry. (www.washingtonpost.com) More...
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St Cloud was doing just fine. It doesn't take long to fill up a 34 seat Saab. The issue is, Delta is cutting them saying they're unprofitable which I would disagree. They burn next to nothing for fuel, have an impeccable safety record, and can go places that a CRJ wouldn't dare. The problem is, the labor costs are still the same though - 1 F/A, 2 CREW...therein lies the issue. And then there's issue #2...the flying public throws a fit if they see props on the wings when they board.
Why would you suppose that an airline would cut a profitable operation ? Quitting because they are making too much money I suppose.
This strikes me as an opportunity for existing or new regional airlines to create or increase their operational area, provided that they can get aircraft which will create a profit...I forsee a ugly hike in ticket prices for these 'out of the way' airports if their service is to continue.
Interesting that Delta finds more profit in operating an MD-88 over a CRJ or similar aircraft. The article makes a reference to the glut of regional jet purchases in the late 90's being a major issue now that fuel prices are high. Is it part of the aircraft design to be so fuel inefficient? Was an emphasis placed on speed over economy?
Interesting that Delta finds more profit in operating an MD-88 over a CRJ or similar aircraft. The article makes a reference to the glut of regional jet purchases in the late 90's being a major issue now that fuel prices are high. Is it part of the aircraft design to be so fuel inefficient? Was an emphasis placed on speed over economy?
I'm guessing that most are not profitable or only marginally so. Probably where the headcount of pax is large enough they will run a larger jet going forward.
I still don't understand this seeing as regional airlines make up more than half of scheduled commercial flights. From what I understand, Regional airlines are profitable because the major airlines buy fuel and outsource to another company to operate the flight. If they dropped regional flights, and the majors such as Delta started using the MD-88 or MD-90 to service these smaller communities, isn't that more of an expense for the major airlines?
I do get the point that Regional Jets cost a lot to fuel, but wouldn't that mean more Q400's and similar props would start getting phased in?
I do get the point that Regional Jets cost a lot to fuel, but wouldn't that mean more Q400's and similar props would start getting phased in?
A lot of people seem to think that the Q400 is some sort of magical airplane that can cure any airline economics problem. It's not. Here are some of the problems:
1. The 50-seat RJ's are bought and paid for, or in a worst case scenario, a sunk cost. A Q400 is expensive and has a lead time for delivery. Buying a Q400 is a risk and not something that either the majors or the regionals want to pay for.
2. The Q400 has great economics on stage lengths below 400 miles. But between 400 and 600 miles the Q400 and 50-seat ERJ and CRJ have very similar operating CASM. Above 600 miles the RJ's have better operating CASM. The 70-seat RJs are even better on these stage lengths. The Q400 works in places like the northeast where stage lengths are short and there's plenty of pax. But out of hubs like MSP, DEN, or SLC there's very few places the Q400 could serve more economically than a 50 seat RJ.
3. Many of these markets struggle to fill 30-50 seat aircraft. Why on earth would you throw a 70 seat aircraft like the Q400 at the market just to have lower CASM? You'll only end up paying more to fly more empty seats around.
4. Lots of Americans still don't like props and refuse to fly on them. It doesn't make much sense, but it's true. At the airline I used to work for, customer satisfaction was about 10 pct higher on the CRJ vs. the E-120 when you hold all other things constant (ie same route) - and the CRJ is the worst customer satisfaction RJ.
5. The Q400 is a bit of a maintenance hog while the ERJ and especially the CRJ have proven to be very rugged and reliable.
1. The 50-seat RJ's are bought and paid for, or in a worst case scenario, a sunk cost. A Q400 is expensive and has a lead time for delivery. Buying a Q400 is a risk and not something that either the majors or the regionals want to pay for.
2. The Q400 has great economics on stage lengths below 400 miles. But between 400 and 600 miles the Q400 and 50-seat ERJ and CRJ have very similar operating CASM. Above 600 miles the RJ's have better operating CASM. The 70-seat RJs are even better on these stage lengths. The Q400 works in places like the northeast where stage lengths are short and there's plenty of pax. But out of hubs like MSP, DEN, or SLC there's very few places the Q400 could serve more economically than a 50 seat RJ.
3. Many of these markets struggle to fill 30-50 seat aircraft. Why on earth would you throw a 70 seat aircraft like the Q400 at the market just to have lower CASM? You'll only end up paying more to fly more empty seats around.
4. Lots of Americans still don't like props and refuse to fly on them. It doesn't make much sense, but it's true. At the airline I used to work for, customer satisfaction was about 10 pct higher on the CRJ vs. the E-120 when you hold all other things constant (ie same route) - and the CRJ is the worst customer satisfaction RJ.
5. The Q400 is a bit of a maintenance hog while the ERJ and especially the CRJ have proven to be very rugged and reliable.
Great analysis! I didn't know that the Q was inefficient at times. I am interested in seeing what happens to regionals in the next couple of years. Especially when you look at a plane such as an E170 or E175 that can handle longer hauls. Why would Delta decide to use an MD-88 especially when hiring in majors is find these days? One important question I have is what will happen to regionals as a result of this?
Also I don't understand this article seeing as SkyWest for example just signed a contract with US Airways as well as Alaska Airlines earlier this year.
