40% Break even load factor?
You really need to start comparing apples to apples here. If I charge 5000 for a DAL-HOU R/T, then 1 seat will pay for the a/c.
If I charge 99 dollars for that same flight, then I break even only when its full.
RJ economics make sense up to time x, (about 1.5 hours based on a study I did for a Euro carrier-when fuel was 18/barrel) beyond that its not that efficient.
If the market only has 45 pax a day, then it makes no sense to put in a 737 to fly that segment. But by the same token, if I need 3 RJs in and out of the city pair, thats when it becomes questionable.
RJ's started life by supposedly taking a marginal market and allowing it to grow for bigger a/c. Now obviously with the RJ glut, they are trying to compete with larger a/c. A recent trip of mine had me fly from Texas to YYZ.The next day I am in Mexico, then in LAX. None of these city pairs are "marginal".
I think that there is a need for RJ's by all mainline carriers. The problem is not that we have too many RJ's(we do) the problem is we have too many airlines.
Also,the Low Cost Carriers can come in and -here is the kicker- not provide a much cheaper seat, but provide more capacity which in a supply and demand market keeps prices low. Try a search on one of the online travel sites and compare prices. They are not that far off between low cost and legacy.
I think limiting an airline to x seats per a/c doesn't help anyone. What we should hope for is for this sub-contracting of flying to stop. And (let me get my nomex on before everyone flames away) a shrinkage in capacity.
And if the shrinkage occurs, there will be hundreds if not thousands of un-employed and under-employed pilots out there. The fact that any airline has such huge amounts of apps on file pretty much means that they can dictate pay and benefits. Just like an RJ glut, we have a pilot glut.
-----Closes lid on bomb shelter. Fire away.