It's been said before that with the price of oil on the rise, CRJ-200's are NOT profitable with oil above $100/barrel.

Does anyone have any specific information that is credible? I would like to know at what point will the majors have to cutback on the use of 50 seaters in order to stop the bleeding.

Passing along the cost to the consumer only goes so far, when people just can't afford 800 dollar tickets for a family of 4, it then becomes a bleeding war between the airlines of who can bleed longer.

Any predictions on the price of Oil? If it gets up to $150 dollars a barrel this summer, will the desert turn into a parking lot for CRJ-200's?

 

I guess it depends on the airline. If your airline contracts with a major that requires a certain amount of flying to be done then you probably won't see much of a difference. (Air Wisconsin for US Airways) The major airline might try to make it more cost effective. For example, Air Wisconsin operates PHL-ABE with a CRJ-200....12 minutes in a Dash 8....pretty much the same time in a CRJ burning HALF the fuel. The RJ's need to stay on 250+ miles routes where fuel burn is a little more effective.

 

Here's a prediction - the price will drop as soon as the Middle East settles down, because despite a 60% drop in Libya's output there is still PLENTY OF SUPPLY to meet global demand.

Oil might hit $150 this summer, but that'd be up another 40% beyond where it closed at today. When it comes down - and it will - the drop will be as precipitous as the rise was.

No, the desert won't be a parking lot for CRJ-200s. This is a TEMPORARY GEOPOLITICAL SPIKE, not a long-term rise due to chronic decreasing supply and/or rising demand.

Yes, high oil hurts your wallet and airlines' margins but the sky is NOT falling...

 

Are you predicting Peace in the Middle East?

There was PLENTY OF SUPPLY when oil skyrocketed in 2008. There's speculators, uncertainty in the middle east and RISING DEMAND OF OIL. I'm not saying the "sky is falling" like you put it, but it is concerning that the typical CASM for a CRJ-200 is currently at or above RASM. With oil going up, which way will RASM go? Obviously continue to go up.

The skin has been cut, how long will the bleeding go before big daddy Delta says, "enough is enough!" ?


President Obama: It's time to drill Alaska. With oil being the biggest expense at an airline, it's going to be a tough, long road, ahead of us this year. Say goodbye to profits this year. I predict it will cause the airlines to grow the turbo prop fleets and reduce the 50 seat jets.

 

Oil will come down by 2012 for a number of reasons (election year being one of them, [Mod edit: delete politics].

Would not be very concerned about it if I were you.

 

Not remotely...just that the commodities (fear) traders will start shorting crude once the democratic unrest/revolution abates and/or they realize its not actually going to hurt global supply.

Long-term, oil prices will continue to rise along with demand, pressuring the cost effectiveness of 50 seat RJs...but I don't think today we are remotely close to the point where ROW becomes a CRJ boneyard.

While I support opening ANWR to oil exploration, it would only provide long-term results and wouldn't do jack to lower current energy prices because as you stipulate, oil supply currently exceeds oil demand.

This country is in desperate need of an energy policy, one that equally ****es off the DRILL BABY DRILL and the Green/Eco-Freaks. We've got to use all available resources, including untapped domestic oil fields, nuclear and coal in addition to natural gas, solar & wind to help reduce our overall use of oil.

None of that will have any bearing, however, on the cost of Jet-A or Regular Unleaded TODAY, this month, or even this summer - only the idiots that trade in Light Sweet, Texas Intermediate & Brent and their less-than-peak-capacity refining buddies can influence that.

 

There is an absurd amount of Oil in Canada and production is poised to be in the 5 million barrel a day in the next 10-15 years. Problem is many environmentalists are crying foul over it here is the US. Pipelines are being held up as is the transportation of equipment through the US for those oil projects.

Once the tentions ease in Libya you'll see a steep decline in crude prices, as long as another large oil producing country isn't on the brink of revolution. Unfortunately the power vacuum that is left in these countries doesn't bode well for increased political stability.

 

Another prediction - oil companies will report record profits a la Katrina. Some one explain that to me.

 

I've been hearing about how unprofitable the 200 is for years. For some reason though, SkyWest hasn't been parking them and has nearly a billion$ in the bank. -- They even just went out and bought another airline that operates hundreds of 50 seaters. Apparently, they're satisfied with the profit potential of the 50 seater.

Some of these "aviation experts" have been wrong for years, and they keep getting it wrong.

 

Amen to that. With how much of the current price run-up has been due to perceived threats to Middle Eastern oil supplies, I think the best way to beat price speculation is with.....speculation.

Once oil companies get the OK to drill in the Gulf again and start taking steps to do so (even if it's just research), or begin announcing plans to drill in ANWR (eventually, maybe), etc, prices will have to come down. Perceived threat to supply countered with perceived future increases in supply, or substitutes that reduce demand.

IMO, I'm definitely putting too much faith in the people who brought you such financial masterpieces as the subprime crisis, and the California power crises (thanks Enron)......

But back on track, RE: CRJ-200.
Utah, I don't have a copy of any of SkyWest's operating agreements with its partners. However, other than the AirTran flying in MKE, a few of the UAX ORD markets, and the Brasilia's, the rest of SkyWest's fee-per-departure ops pass along the fuel costs directly to the major partner (DL, UA). Therefore, to OO for most of the flying, it really doesn't matter what the fuel cost is. If the major has your 50-seaters locked up on contract for a length of time, they're taking the fuel cost bath, not OO. I don't necessarily disagree with your conclusion, just the way we all get there.