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Old 11-27-2016 | 07:06 PM
  #45  
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higney85
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From: Bus driver
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Originally Posted by N1234
What does making money really mean? Regional feed is supporting the connecting flights. How much revenue you allocate to the regional feed is a pure accounting exercise.

Hence, majors really view it more as a cost factor that needs to be minimized.
When regional feed is roughly half of the domestic brand feed, chopping off the rj kills not only the half of domestic feed, but the majority of intl feed, on a macro level. Few truly fly from JFK-LHR as their trip, it's a layover involving an RJ to complete the journey. You get no pushback on mainline taking flying back, but regionals exist to supply feed at a discount. Thinking otherwise isn't following the money. If 2 mainline flights a day, same seats, cheaper overall costs, worked better than 5-6 RJ's a day, it would have been done in 2009 when things went sideways. Instead of 5-6 a day, the schedule was 4-5 in an effort to ensure profitability, or minimize loss. You can't put mainline (76+ everywhere) and make a profit without frequency and a network to meet demand of both time and cost. Once you kill a station from one carrier, the others simply grow the presence. The same existed with 19 seats, 34 seats, and 50 seats. The population grows and costs come down per seat to allow overall growth, but at the end of the day the frequency is still a need and empty seats are lost revenue. Years down the road a 50 seater 5x a day will likely be replaced with a 76 seater 6x a day. That's 250 seats vs 456 seats. The difference is population growth vs operating costs. More seats filled, lower cost, newer aircraft are cheaper per seat mile, if you fill them. Economics 101. If you can fill 400+ a day at X price, the margin of profit is higher than 250 @ Y.
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