Why SWA Loves RJ's
06-15-2005, 11:59 AM
#21
Line Holder
Joined APC: Jun 2005
Posts: 89
RJ's have a higher CASM but as they get larger, the CASM comes down. RJ's have a lower plane cost per mile. It costs less money to send an empty RJ from Dallas to Wichita than say a Super 80.
If the prevailing market is 50 pax a route segment then the RJ makes money and the Super 80 doesn't. If the market average is 100 pax then the Super 80 makes money and the RJ leaves money on the table unless they run the route twice. At that point the RJ has the advantage of more frequency which is very appealing to the pax.
In my opinion what is hurting carriers like AA are the carriers who aren't paying their bills or dumping their employee benefits on the taxpayer but are still out competing for business. When AA mainline became too expensive to grow, AMR realized that they could make a higher return on their money with less risk and hassle by becoming an airline services company rather than just an airline. The inflight magazines in SWA jets are printed and produced by AMR. AMR threw SWA out of Sabre and then when they saw what SWA was doing on their own they came back with their tails between their legs and gave SWA what they wanted to get them back in.
The whole Eagle operation is just part of that broadened empire.
That varied revenue stream is great for AMR, but it doesn't do much for American Airlines. It will keep it around but it takes away the incentive to invest in growth of the airline when the return on the investment is lower than investing in ancillary services. AMR needs an airline to revolve around, but it doesn't need a very big one. I predict that AMR will continue expanding the myriad services that it provides to other airlines worldwide, and it makes pure business sense. The contract negotiations with the print shop employees or technical writers don't seem to be a duel to the death like it lately seems to be with the airline groups. You may place a high value on the services you provide to your airline, but many airline employee groups have shown that it is possible to demand so much that the investors start looking for other places to put their money. People think that airliners run on fuel. They don't. They run on capital, usually belonging to other people known as investors. When the capital drys up the airliners get parked.
If the prevailing market is 50 pax a route segment then the RJ makes money and the Super 80 doesn't. If the market average is 100 pax then the Super 80 makes money and the RJ leaves money on the table unless they run the route twice. At that point the RJ has the advantage of more frequency which is very appealing to the pax.
In my opinion what is hurting carriers like AA are the carriers who aren't paying their bills or dumping their employee benefits on the taxpayer but are still out competing for business. When AA mainline became too expensive to grow, AMR realized that they could make a higher return on their money with less risk and hassle by becoming an airline services company rather than just an airline. The inflight magazines in SWA jets are printed and produced by AMR. AMR threw SWA out of Sabre and then when they saw what SWA was doing on their own they came back with their tails between their legs and gave SWA what they wanted to get them back in.
The whole Eagle operation is just part of that broadened empire.
That varied revenue stream is great for AMR, but it doesn't do much for American Airlines. It will keep it around but it takes away the incentive to invest in growth of the airline when the return on the investment is lower than investing in ancillary services. AMR needs an airline to revolve around, but it doesn't need a very big one. I predict that AMR will continue expanding the myriad services that it provides to other airlines worldwide, and it makes pure business sense. The contract negotiations with the print shop employees or technical writers don't seem to be a duel to the death like it lately seems to be with the airline groups. You may place a high value on the services you provide to your airline, but many airline employee groups have shown that it is possible to demand so much that the investors start looking for other places to put their money. People think that airliners run on fuel. They don't. They run on capital, usually belonging to other people known as investors. When the capital drys up the airliners get parked.
Last edited by Widow's Son; 06-15-2005 at 12:03 PM.
06-18-2005, 09:48 PM
#22
Gets Weekends Off
Joined APC: May 2005
Position: B777/CA retired
Posts: 1,482
Great points on both sides, however, I'd like to throw some things into the discussion. At AWA management says we lose money on every 50 seat RJ that goes out, we break even on the 70 seaters and make money on the 90 (actually 86) seat barbie jets. They tolerate the 50 seat jets to keep market share and get the hub throughput.
I've been on vacation this month and had the chance to fly a RJ from PHX to SBA, a perfect route for an RJ. 1 + 10 enroute, 65 to 80 pax on board, high dollar market. The ride? A long, cramped tube with lavs you can hardly stand up in to pee (I am over 6 feet but my son, who is 5' 10 " says the same). My wife as usual grabs the window seat and gets claustophobia, hemmed in by me next to her and uncomfortable from the hot cabin due to the miniscule vents in the PSU. The F/As are young and barely able to speak coherntly to brief the pax. During the flight to SBA both F/As are in the back in the last row BSing while the cockpit door is left unattended save for the F/A jumpseat pulled out. Not a great move. The flightdeck crew were both young, and the flight was not the smoothest as far as control inputs could be felt quite readily. Hey, I have bad days, too but both flight were like that, as has almost every RJ I've ridden in. The kicker, when we got back to PHX (100 degree day) they pull up to the gate and shut both down before the jetway gets up and without waiting for ground power or starting the APU (a/c was thru top ABQ with less than a hour turn - APU worked in SBA). We sat there in the dark for 10 minutes before we could deplane. It got really uncomfortable on that RJ!
That's my RJ story, your milage may vary. The crews (gate to Flightdeck) are not up to mainline standards because they ARE inexperienced. I was a regional pilot once (and a freight dog before that) and I remember how much more I've learned in the last 18 years I've been at AWA than the 3 years I spent flying turboprops for a commuter as captain. Regional captains that come here have a lot to learn about flying even if they have had RJ time. It all comes with experience and the desire to improve yourself. To say they are equivalent to mainline is just not right. That 86 seat jet IS the same as NWAs DC 9 but the ride doesn't come close to being the same. Same mission but that old DC 9 is flown better and is a lot more comfortable.
I know some other regionals have crews that have been there a long time. There are still guys at my old airline flying Dash 8s for AAA that I know do a great job. Our feeder is not up to that standard because it is a sh## place to work and is the epitome of labor exploitation. That is becoming the standard in this business but we still pay better at the majors over the course of your career. A F/O at AA may make less than a 15 year Eagle guy or Comair Capt but that AA F/O will later have a career path to a 777 Capt seat. Where does the RJ guy go?
I've been on vacation this month and had the chance to fly a RJ from PHX to SBA, a perfect route for an RJ. 1 + 10 enroute, 65 to 80 pax on board, high dollar market. The ride? A long, cramped tube with lavs you can hardly stand up in to pee (I am over 6 feet but my son, who is 5' 10 " says the same). My wife as usual grabs the window seat and gets claustophobia, hemmed in by me next to her and uncomfortable from the hot cabin due to the miniscule vents in the PSU. The F/As are young and barely able to speak coherntly to brief the pax. During the flight to SBA both F/As are in the back in the last row BSing while the cockpit door is left unattended save for the F/A jumpseat pulled out. Not a great move. The flightdeck crew were both young, and the flight was not the smoothest as far as control inputs could be felt quite readily. Hey, I have bad days, too but both flight were like that, as has almost every RJ I've ridden in. The kicker, when we got back to PHX (100 degree day) they pull up to the gate and shut both down before the jetway gets up and without waiting for ground power or starting the APU (a/c was thru top ABQ with less than a hour turn - APU worked in SBA). We sat there in the dark for 10 minutes before we could deplane. It got really uncomfortable on that RJ!
That's my RJ story, your milage may vary. The crews (gate to Flightdeck) are not up to mainline standards because they ARE inexperienced. I was a regional pilot once (and a freight dog before that) and I remember how much more I've learned in the last 18 years I've been at AWA than the 3 years I spent flying turboprops for a commuter as captain. Regional captains that come here have a lot to learn about flying even if they have had RJ time. It all comes with experience and the desire to improve yourself. To say they are equivalent to mainline is just not right. That 86 seat jet IS the same as NWAs DC 9 but the ride doesn't come close to being the same. Same mission but that old DC 9 is flown better and is a lot more comfortable.
I know some other regionals have crews that have been there a long time. There are still guys at my old airline flying Dash 8s for AAA that I know do a great job. Our feeder is not up to that standard because it is a sh## place to work and is the epitome of labor exploitation. That is becoming the standard in this business but we still pay better at the majors over the course of your career. A F/O at AA may make less than a 15 year Eagle guy or Comair Capt but that AA F/O will later have a career path to a 777 Capt seat. Where does the RJ guy go?
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