Originally Posted by CitationJason
I think you'll see some folks stay with or go to turboprops on certain routes. The RJ's are affordable to operate, but with 35 to 50 seats the cost per available seat mile is very high. If you don't have a profitable load factor on a consistent basis, you would lose a bunch of money, even on a subsidised route. If you could get a fast and efficient turboprop like a Q400, then you can provide a sightly lower number of seats (which is fine if you weren't filling all 50 anyways), and lower your cost per available seat mile, therefore, load factor percentage increases and cost decreases, it's an ideal situation.
CJ
Not entirely correct CJ. I do agree with most on here, the props are by no means done and as gas prices continue to increase I think there will be a resurgence of orders for props and a lot more RJs in the desert. Now to clear up some misconceptions about airline economics (yes, I studied this stuff).
Load factor - more or less a meaningless number by itself. I could offer $1 coast to coast fares and fill 747s every day of the week and have a 100% load factor but I would lose my shirt! Load factor has to be looked at with
yield. Yield is what airline managers spend all their time trying to maximize. Basically means selling the right seat to the right person at the right price (read getting the most you can out of each customers pocket).
Reducing the number of seats on a route usually (there are exceptions) does very little for yield or profitability. Suppose I fly a route 4 times a day with 50-seat E145s but I am only filling 120 seats a day. That means my load factor is only 60%. If I decide to pull the 145s and put 37-seat 135s on it (an aircraft with only slightly lower costs per available seat mile, depending on the distance flown) what I've basically done is
raise my cost per available seat (CASM) mile because now that cost is spread over fewer seats. Yes, my load factor increased to 81% but so what? It still costs me about the same but I now have 52 fewer seats per day in that market to spread that cost around so my CASM has increased. Where the Q400 kicks the RJ's a$$ is that I can put 70 seats on an aircraft that goes about the same speed as that 50-seat RJ at significantly lower costs. So Ive reduced both my direct cost and my CASM which will increase my yield. Hope I cleared up some misconceptions.
