Not necessarily.

70+ seaters are larger and newer, and thus more expensive to buy, own, and operate. They are also less likely to be paid off (most 50-seaters are paid off).

Market conditions could definitely preclude replacing 50's with 70's in some or many markets. A lot of 50-seat destinations are not THAT far from hubs or bigger towns. A fare increase will cause some folks to drive to a different airport... the bigger the increase, the more folks bail.

My parents live in a small town a couple hours from the hub. Whether they fly or drive depends on the going rate for tickets, and changes with the season.

In that case, airlines either use turboprops or drop the service... they won't do it at a loss. Turboprops might tilt the scales, or might not. They burn less gas, but new ones still cost a lot of money, and unless you get 50-seaters, many pilot groups will want 70-seat jet pay for 70 seat prop-jobs. In the old days, the obviously-inferior prop pilots got paid less, even for the same seats, but I doubt anybody would put up with that today.

 

50 seat jets are far more popular in the U.S. than many other countries. Is that because the geography and population distribution is unique? Is the 50 seat jet the perfect aircraft for these markets? What effect do scope clauses and CPAs have on the economics?

It is self evident that each market should be served by the lowest cost equipment that can be reliably filled to capacity. However there are many more pieces to the analysis than number of seats.

 

I would say close to 550,000 passengers when not even 3 months ago we were at 87,000 passengers a day is a pretty good indication that things aren’t going to stay down, considering most tourist attracts are opening up in July and NYC flights are still very low, as well as international travel.

 

We shall see what pilots will put up with. I expect to see some startups with some fairly poor compensation packages and QoL rules after a few thousand pilots are on the streets. Hopefully I will be pleasantly surprised but I doubt it. Rational actors will take the best job they can find rather than deplete savings unnecessarily. Some will choose jobs outside of aviation while they await recall, others may find even at reduced wages their ATP remains their best meal ticket.

Supply and demand have worked in our favor the past few years. Now it is going to turn against us. The question is how badly and for how long.

 

If the majors can shed regional contracts in BK, this might be a good time for start-up/alter-ego regionals. As you said, if you build it, they will come.

Although the jumbo regionals do have a vast economy of scale that would hard for a new, small entrant to beat, even with cheap pilots.

 

87,000 passengers was 3% of normal. We’re up to 20% now.

yes it’s coming up but how far and how fast. What if it comes back to 75% by end ‘21. That’s a big change, very good chance of more than marginal flight frequency adjustments in that scenario

 

The question is who is flying right now?
Travel Confidence Slides
I mean we clearly have an uptick, but I think we are seeing the small majority that are willing to put up with the risks, absolutely have to travel for work and the the youth that dont care. According to polls, 60% of the population won't get on a plane in the next months. If that holds true, yes I know polls can be wrong, we are in trouble across the board.

What percentage of flying has to come back to make this ship stay afloat without shedding half the workforce?

 

Probably 50%. My gut feel (from listening to everything managers are saying, and historical precedent) is airlines will probably staff mid-term for demand + 10%. Maybe +20% if they want to be prepared to grab market share if the recovery takes off.

That's front-line employees. Likely different for overhead employees, typically if they were running fat they can cut 30%-ish before they get to the meat-and-bone needed to run an airline. Unless they were running lean to begin with, but most majors probably weren't in the boom times.

They would probably cut fewer pilots, percentage-wise. Between retirements, and costs of furlough, recall, and associated bump-n-flush training, it's going to be cheaper to carry extra pilots for a while.

I'd guess other front-line employees are getting the weed-whacker on 01 Oct. They probably staff those for Nov/Dec, since they can bring them back quickly in 2021 as things pick up.

That's for majors. Regionals it all depends on your contract(s)... anything from growth to liquidation, depending.

 

Raw numbers will be huge, but what type (business, leisure, intl, domestic) will matter too.

I think there’s some chance of non big4 airlines liquidating. Obviously catastrophic for those there, but it will put a lot of traffic up for grabs. Hard to predict how that unfolds.