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50 seater unprofitable....HUEY!!!!!


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50 seater unprofitable....HUEY!!!!!

Old 04-04-2008 | 06:45 AM
  #11  
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Originally Posted by Past V1
But if anyone has any STAT's....not rumors...on how the RJ's are unprofitable...please share

50-seat RJ's burn far more fuel per available seat than larger aircraft...ANY larger aircaft including 70 seaters.


If you have 150 pax, you can either use 3 RJ's or one 737...the 73 will burn far less fuel and cost less to buy and maintain than 3 RJ's.

The only downside to the 73 is frequency...the pax have one flight schedule per day instead of three. This is a big deal, and it was one of the driving forces bheind the rise of the RJ...but with fuel prices where they are, the airlines are not as worried about frequency.

Rough numbers (cruise):

737-7: 5,000 lbs/hour
CRJ 200: 3,000 lbs/hour

Last edited by rickair7777; 04-04-2008 at 06:54 AM.
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Old 04-04-2008 | 06:48 AM
  #12  
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Agree with ExperimentalAB and JetJock. RJs are better for the longer haul if priced correctly. $x per seat mile means more money for the RJ over a longer distance where most of that longer distance will be in cruise where they really shine. That equals more profit.

Take that same $x per seat mile and use it on shorter trips and you have an aircraft that is burning a hole in the wallet trying to climb up to altitude at TO power before starting the decent. There is less distance to pull the power back to a more conservative setting as well. This is where T-props will shine.

While some T-props have longer distance they lack the speed of the jets. There's a reason why movies are around 2hrs in length. They miscalculated the initial Lord of the Rings movie by 20 minutes or something like that. Had they cut the film 20 min they could have shown it an additional time each day making substantially more money. Same goes for the RJ vs T-prop. While the T-prop might get from A to B more efficiently there is a point that once past an RJ, while less efficient, still becomes more practical since they can add an additional flight.

IAH-STL is a prime example. T-Props could make the flight but the RJ, due to speed, can make MORE flights in a day. Every flight is always overbooked so it's a money making leg.
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Old 04-04-2008 | 06:49 AM
  #13  
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Its all about the routes flown, fares charged, and passenger demand. Take a CRJ flying ATL-JFK with 50 pax paying 150 bucks each. Thats $7500. Take a CL-604 flying from TEB-MIA with 4 pax paying a total of $10000. Same airplane (pretty much) but people are willing to pay much more for great service taking them where they want to go.

How about if you chartered a Saab 340 in the middle of a snowstorm Christmas Eve in Chicago where there are 5000 Passengers stranded at the ORD airport. I guarantee youll be able to find a few who will pay thousands of bucks to get home to Peoria.
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Old 04-04-2008 | 09:35 AM
  #14  
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Originally Posted by rickair7777
50-seat RJ's burn far more fuel per available seat than larger aircraft...ANY larger aircaft including 70 seaters.


If you have 150 pax, you can either use 3 RJ's or one 737...the 73 will burn far less fuel and cost less to buy and maintain than 3 RJ's.

The only downside to the 73 is frequency...the pax have one flight schedule per day instead of three. This is a big deal, and it was one of the driving forces bheind the rise of the RJ...but with fuel prices where they are, the airlines are not as worried about frequency.

Rough numbers (cruise):

737-7: 5,000 lbs/hour
CRJ 200: 3,000 lbs/hour
another downside in the 737-7 for pax's is that it cannot serve some of the smaller airports that the RJ's currently fly to.
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Old 04-04-2008 | 10:35 AM
  #15  
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Originally Posted by rickair7777
50-seat RJ's burn far more fuel per available seat than larger aircraft...ANY larger aircaft including 70 seaters.


If you have 150 pax, you can either use 3 RJ's or one 737...the 73 will burn far less fuel and cost less to buy and maintain than 3 RJ's.

The only downside to the 73 is frequency...the pax have one flight schedule per day instead of three. This is a big deal, and it was one of the driving forces bheind the rise of the RJ...but with fuel prices where they are, the airlines are not as worried about frequency.

Rough numbers (cruise):

737-7: 5,000 lbs/hour
CRJ 200: 3,000 lbs/hour
3,000lbs cruise on a 200?! I had no idea they burned that much. At FL36/37 I'm sitting at 2k flat. Maybe 40lbs or so less. (ERJ-145)
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Old 04-04-2008 | 10:38 AM
  #16  
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Originally Posted by maveric311
another downside in the 737-7 for pax's is that it cannot serve some of the smaller airports that the RJ's currently fly to.
Pretty sure a 737-700 could do 80%+ of airports that a CRJ utilizes.

There will always be an niche for the "RJ"...the long, thin, profitable routes that one can charge a premium on for no connection, like the RDU-AUS paring that Eagle is or was doing. Flying 300-500 miles to medium-sized cities out of a hub where your average loads are only 30-70 folks are another good use of the RJ. Flying one from CVG to LEX/SDF/DAY 9 times a day doesn't make any sense.

Wikipedia - Cost per Available Seat Mile vs. Revenue per Available Seat Mile
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Old 04-04-2008 | 10:38 AM
  #17  
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Originally Posted by ToiletDuck
3,000lbs cruise on a 200?! I had no idea they burned that much. At FL36/37 I'm sitting at 2k flat. Maybe 40lbs or so less. (ERJ-145)
CRJ-200s don't get above FL350 that often...I've seen (IIRC) about 2400pph at FL360 and .78M before though.
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Old 04-04-2008 | 10:54 AM
  #18  
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There is a context that one must understand when saying RJ's are not profitable - and that's how they are deployed under fee per departure agreements.

Consider that most RJ's are operated in fee-per-departure arrangements with fuel being a pass-through expense. This means that RJ operators get paid a set fee to operate the flight and don't pay for the gas.

For the purchaser (the UAL, NWA, DAL's of the world) the fee-per-departure model is a money loser when oil is at $100/barrel. RJ's are on the cost side of the balance sheet to be certain. The question is; what is the feed worth to the network?

For a network operator, an RJ flight might cost $4000 to operate (fee+fuel) but only yield $3000 in revenue (hypothetical round numbers). From a network operator's perspective RJ's are "unprofitable" with fuel at current levels and pass-through agreements.
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Old 04-04-2008 | 12:14 PM
  #19  
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Originally Posted by HSLD
There is a context that one must understand when saying RJ's are not profitable - and that's how they are deployed under fee per departure agreements.

Consider that most RJ's are operated in fee-per-departure arrangements with fuel being a pass-through expense. This means that RJ operators get paid a set fee to operate the flight and don't pay for the gas.

For the purchaser (the UAL, NWA, DAL's of the world) the fee-per-departure model is a money loser when oil is at $100/barrel. RJ's are on the cost side of the balance sheet to be certain. The question is; what is the feed worth to the network?

For a network operator, an RJ flight might cost $4000 to operate (fee+fuel) but only yield $3000 in revenue (hypothetical round numbers). From a network operator's perspective RJ's are "unprofitable" with fuel at current levels and pass-through agreements.
Very true...a point not mentioned yet. The regionals are around for feed...What is the value of the feed? Those connecting pax's may bring an RJ, micro-speaking (operating in the red or at slim margin), into the black, in macro-terms.

Additionally, if United were to say that they no longer wanted to service ORD-DSM, for example...Those customers that were flying into ORD for international or other money-making routes may choose American and their Eagle feed instead.
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Old 04-04-2008 | 12:18 PM
  #20  
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If you take Delta for example, they take out the RJ feed not only because they are unprofitable, but because of the lack of revenue they bring to the table.

Delta wants their RJ with business class section, because they bring a higher revenue, and people are beginning to realize how small those RJs are. When you can get a used MD90 on the used market for about 10mil, it really doesn't make sense to invest in these shiny 200 where it burns more gas/pax, and bring in less revenue per flight.
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