DOT: US Regional Crew Cost Comparison
03-05-2014 | 06:08 PM
#11
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These numbers are apples and oranges comparisons. And yes, crew costs are a good chunk of regional carrier expenses because the carriers are nothing more than staffing companies-thus large payrolls compared to total costs
03-05-2014 | 06:17 PM
#13
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Here, NWA bought them. Compass may lease them from NWA/DAL but it would most likely be a token amount based upon those operating cost numbers. You'd have to go to BTS.gov and do some number pulling to find out.
Compare that to Republic, they purchased/leased the aircraft directly, and are fully reimbursed for that purchase/lease.
03-05-2014 | 06:19 PM
#14
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I think an actual cost figure in dollars and cents per block hour would make for a more discernible comparison.
03-05-2014 | 08:00 PM
#16
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It depends on the airline. For a large carrier with a marketing department, sales, etc yes that's correct.
For a labor staffing company, which is basically all some "airlines" are, the pay rate would be a significant portion of their operating cost.
Example, according to BTS data I was reviewing several years ago, the operating cost of an XYZ ERJ was significantly less than my companies CRJ. When I looked at the numbers, the XYZ ERJ company paid $0.50/gal for JetA, my company was paying $3. This inflated the overall operating cost of my company, reducing the labor cost. It would have the opposite effect on the XYZ ERJ company.
The majors these days are buying the aircraft and just using the regionals to staff them. The regional airline has no back end to sustain. The operating cost of those airplanes is incredibly low (and labor % incredibly high) because the only thing they are really paying out is labor. Everything else, for all intents and purposes, is a zero cost.
If you look at Republic and Compass, I would bet Republic owns their aircraft where as Compass does not. Anyone know if that is true?
For a labor staffing company, which is basically all some "airlines" are, the pay rate would be a significant portion of their operating cost.
Example, according to BTS data I was reviewing several years ago, the operating cost of an XYZ ERJ was significantly less than my companies CRJ. When I looked at the numbers, the XYZ ERJ company paid $0.50/gal for JetA, my company was paying $3. This inflated the overall operating cost of my company, reducing the labor cost. It would have the opposite effect on the XYZ ERJ company.
The majors these days are buying the aircraft and just using the regionals to staff them. The regional airline has no back end to sustain. The operating cost of those airplanes is incredibly low (and labor % incredibly high) because the only thing they are really paying out is labor. Everything else, for all intents and purposes, is a zero cost.
If you look at Republic and Compass, I would bet Republic owns their aircraft where as Compass does not. Anyone know if that is true?
03-05-2014 | 08:35 PM
#17
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Meaningless for the most part. Too many other variables and we don't even know what all was included in the cost...
Mgt, admin overhead, Mx, overhauls, dispatch, lease costs, parking spaces, etc, etc. Some airlines set aside money for overhauls, others just file BK when the airframes get too old.
Some of this may be variable based on geography. Also some of those airlines probably don't even own the airplanes in question.
But all this aside a high-longevity workforce is going to cost more than a low-longevity one. If your groups longevity is high plan on eventually losing either your flying to an RFP or your pay scale to the BK judge.
Mgt, admin overhead, Mx, overhauls, dispatch, lease costs, parking spaces, etc, etc. Some airlines set aside money for overhauls, others just file BK when the airframes get too old.
Some of this may be variable based on geography. Also some of those airlines probably don't even own the airplanes in question.
But all this aside a high-longevity workforce is going to cost more than a low-longevity one. If your groups longevity is high plan on eventually losing either your flying to an RFP or your pay scale to the BK judge.
03-05-2014 | 08:51 PM
#18
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No, I think he is seeing it correctly. Compass crews take up a higher percentage of the hourly operating costs for E170s than Republic crews according to this chart. I cannot however infer that to mean that Compass crews cost more than Republic crews. We simply don't know what the other operating costs and aircraft utilizations are and the longevity disparity between the two carriers would imply the opposite.
I think an actual cost figure in dollars and cents per block hour would make for a more discernible comparison.
I think an actual cost figure in dollars and cents per block hour would make for a more discernible comparison.
So, what you are saying is since we have incomplete info, therefore 42.2% of X (Compass) is less than 24.2% of X (Republic)?
My head hurts
BrewCity stated:
03-06-2014 | 03:06 AM
#19
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X*42.2%<Y*24.2%
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