AMR wasn't the first and won't be the last corporation brought to its knees at the mindless pursuit of a flawed business model. (Hint-don't rely upon the guys who dug the hole you're in to be the ones to find a way out of what they've created.) They will keep worshipping at the altar of their failed idea as long as possible because (and this is important, so pay attention!) to do otherwise would be to admit they are failures as managers or leaders! The longer they can get the employees to buy off on subsidizing the business, the longer they will have to get their personal exit strategy in place...

RJ Pilot, Knowledge is Power in executing one's career plan, there are very little opportunities for a "do-over"..Plan wisely, Grasshopper.

http://www.aviationplanning.com/asrc...icially%20Over

The RJ Era: Officially Over
The Next Phase: RJ Fleet Reductions

The president of Embraer last week indicated that the company is considering pulling-down production of its regional jet line in 2006. This comes just weeks after Bombardier's decision to cease production of its own 50-seat model. Embraer in the meantime is up to its vertical stabilizer in orders for its E-170/190 platform of airliners.

This isn't what the aviation analyst cognoscenti predicted not too many months ago. But it was no surprise to clients of The Boyd Group...

"... after 2004, the demand for net new regional jet units may not be sufficient to support the current RJ manufacturers... "
- The Boyd Group Global Fleet Forecast, June, 2000

Questioning The Sacred "Consensus." We mention this simply because up until very recently, our fleet forecast for RJs has earned us some sneers from the all-knowing sectors of the aviation media, who were busy trying to out-do one another with sunshine stories on the glorious future of the "regional jet."

Not to mention the snickers from other analysts. This is because our forecasts ran counter to the ones being put out by the giant "Global Advisory, Strategic-Thought-Process, Analytical-Braintrust, MBA-Supported" consulting cabals. "Everybody knows," has been the accepted wisdom, "that regional jets are the wave of the future...It's the consensus..."

Now that it's happened, the same analysts and some in the aviation media who snickered at our forecasts are suddenly "predicting" and announcing the demise of 50-seaters. Safe timing, y'all.

But the fact remains that it's a trend that the staff at The Boyd Group identified for our forecast clients over five years ago.

What's Next: Can You Say, Mojave, Boys And Girls? As we outlined in the fleet forecast session at our Annual Conference in Savannah last month, the prognosis for RJ-series airliners in US service is not very good.

We forecast that as many as 200 of these airliners will be excess to market needs in the next 18-24 months. For the financial entities holding paper on these things, prepare for a haircut. There isn't much potential - anywhere in the world - for an RJ after-market, short of a Bud Light promotion.

The number of RJs in operation will continue to decline at some rate going forward. How much will be determined by a range of factors, including fuel prices, mega-carrier strategies, yield trends, and competitive issues. One thing is certain, however. The 1,500+ RJs in the US fleet is now at least 200 too many, and it's entirely possible that additional double-digit declines in the number in service could be seen in the next three years.

The Delta system in particular appears to be way over-invested in RJ deals. Tossing cost-plus RJs into off-hub, point-to-point missions to destinations in Florida where yields are lower than W's approval rating, looks like an expensive way of maintaining market share.

Finally, using RJs on routes competitive with carriers operating mainline-cabin equipment, such as 737s or even E-170s, makes passengers get real itchy to take another airline. This was one of the major problems with Delta's now-gone DFW hub - it became RJ-centric and non-competitive.

SJP Future: Expand Upward. There will also be a shake-out in the number of companies that operate RJs. Two Small Jet Providers - Mesa and Skywest - appear to be bullet-proof for the foreseeable future. Skywest, because it has the pole position for last-man standing in the Delta SJP network. Mesa, simply because it has its RJ eggs in a number of baskets, and has management that understands the future context of the airline industry. But after these two, it's a declining scale of who's going to survive and who might not.

Forecasting Is Risky. So's Life. To be sure, the firms for which we do forecasting - airports, OEMs, aircraft manufacturers, powerplant manufacturers, financial institutions, and suppliers - have learned that our data sometimes doesn't paint a rosy picture.

But we're a whole lot more accurate than "following the consensus."

Which pretty much describes what lemmings do when they run off a cliff.