Boyd on RJ's 30 April 07

[DiverDriver]

I love the puddle jumper comment when people get on. Yah, it's a puddle jumper. If you consider the Great Lakes (all of them) puddles.

 

[BoilerUP]

I love the puddle jumper comment when people get on. Yah, it's a puddle jumper. If you consider the Great Lakes (all of them) puddles.

Had a little girl screaming down the jetbridge the other day "I'M GONNA DIE, THAT AIRPLANE IS TOO SMALL, I DON'T WANNA DIE!!!" Her poor father looked so sheepishly at us, all we could do was laugh.

When an RJ is too small for a 6 year old girl of all people, you know there is a problem...

 

[RJAA]

and of course the majority of this country's people would have problems fitting into that forward lav on a CRJ700.

 

[acarpe3448]

Had a little girl screaming down the jetbridge the other day "I'M GONNA DIE, THAT AIRPLANE IS TOO SMALL, I DON'T WANNA DIE!!!" Her poor father looked so sheepishly at us, all we could do was laugh.

When an RJ is too small for a 6 year old girl of all people, you know there is a problem...

Was she getting on a Comair flight?

 

[crjdxr]

Oh that's bad form.

 

[JonnyKnoxville]

Was she getting on a Comair flight?

Very classy...I forgot that your airline has a perfect record doesn't it.

 

[Morning Wood]

A metaphor such as the F terminal at ORD being: The fall of Saigon re-enactment?

Yeah he has used that one a lot, but the first time I heard it I thought it was pretty funny.

 

[Bako Cap]

Actually, pay to play is not a new concept. Sorry Boyd, you're still lacking any insight by rehashing the obvious. The regional industry used to be all code-share not fee-for-departure. The regionals were only paid for the seats that were sold. Jerry Atkin was a pioneer in the fee-for-departure when he inked a deal with Delta to actually make a profit on the CRJ back in '95-'96. Delta wanted the CRJ to fly routes but didn't have the loads to allow SkyWest to break even. Fee-for-departure became an industry standard when every other airline wanted to dump their props for "All jet" service and still turn a profit back when there was not many 50 seat jets in service or being built. Ask anyone who knows about United being a "Black Widow", they used to control the profit margins of their partners on a daily basis to keep a regional in check or destroy them. Competition is going to get fierce in the next couple of years. However, I don't believe that will affect us too much as pilots. With the "qualified" pilot shortage, airlines will buyout competitors, not for physical assets, but for their pilots/mechanics and other trained labor

 

[~~~^~~~]

Good post!

Jerry Atkin was a pioneer in the fee-for-departure when he inked a deal with Delta to actually make a profit on the CRJ back in '95-'96. Delta wanted the CRJ to fly routes but didn't have the loads to allow SkyWest to break even.

Delta is very smart about using the RJ's to get the passengers in their 757's and 767's to make a profit. Delta looks at more than just the DCI part of the customer's trip - they analyze the margins.

Competition is going to get fierce in the next couple of years. However, I don't believe that will affect us too much as pilots. With the "qualified" pilot shortage, airlines will buyout competitors, not for physical assets, but for their pilots/mechanics and other trained labor

I hope you are right, but history tells a different story. In almost every previous buy out management has wanted to re-staff with new hires and usually the incumbant pilots are willing to even sign concessionary "B scales" on flying that they know they will never have to perform. The only reason pilots got integrated in the past was because of ALPA.

Without ALPA - jeesh - welcome to the street.

When the regional consolidation starts I don't think it will be good for anyone except for managers who are adept at making deals and moving on. These days regionals WANT employees to move on so they can operate with low cost new hires. The days where airlines wanted you for a career are over - apparently training expenses are not the consideration they once were.

 

[Bako Cap]

I've got my fingers crossed because I'm a glass half full kind of guy.

 

[SKYWRJGUY]

I bet Boyd called 19- & 30-seat turboprops a thing of the past back in the early 90s when the first RJ came online. He's a blowhard, but he must be a good marketer since he's always being quoted...

 

[VeeOne]

I've got my fingers crossed because I'm a glass half full kind of guy.

That's the problem-

Management is looking at your half full glass and figuring that it is twice the size it needs to be.:laugh:

 

[JoeMerchant]

That's the problem-

Management is looking at your half full glass and figuring that it is twice the size it needs to be.:laugh:

and ALPA is telling you your half full glass is really full twice.... now pay up.....

 

[JoeMerchant]

That day has already come and gone! Skywest paid $450 million for more franchise territory, and to prop up one of the hands that fed them. They had no choice, for at the the time, 40% of their revenues came from the carrier that was the endangered species. Now, with what amounts to Skywest giving the Widget CPR, the Widget lived on to get what amounts to the quad-druple, bypass that it so desparately needed! Without the Skywest cash infusion, there would be no Bankruptcy Exit; the victim would have been DOA! However the infusion was mutually beneficial, and it was a heck of a deal when all things are considered for both parties. Hopefully, all parties will live happily ever after!

Your right Speedtrape, but now the SJP are going to be played like fiddles.... without brand scope, it is going to be a bidding free for all, and we aren't looking good in that bidding war.....

 

[trip]

Dont think at-risk is will be the demon its being made out to be. The regional will have much more say in how they will run there operation. The strong will survive.

 

[Poahi]

Boyd is a amateur historian with an ego problem who helps small airports with CIP financing. 3 years from now, he will be bashing the 900's and the EMB jets.

 

[belchfire]

Couple of big iff's in there...

If the airlines ever get back to charging what their tickets are worth for the dismal service they are providing...

If fuel stays relatively stable.

I never thought that RJ's were cost effective. The majors have used them as a tool to keep market share, frequency up and losses down. For the vast majority of flights a turboprop is more efficient.

 

[ASARJMan]

and ALPA is telling you your half full glass is really full twice.... now pay up.....

Having a hard time paying your mortgages JB? In addition to your 1.95%? Too bad. Maybe you can sell those "lost" LEC 112 notes on EBay for some moola?

 

[Speedtape]

Your right Speedtrape, but now the SJP are going to be played like fiddles.... without brand scope, it is going to be a bidding free for all, and we aren't looking good in that bidding war.....

Their business plan is excellent and even brand scope would not save the day! Collective and pattern bargaining at the regional level have been eliminated! It is the best cost control plan that could have been achieved. Sears and Walmart have been doing it for years! Multiple suppliers, in some cases with limited revenue streams, competing for limited business opportunity, result in Wal-mart every day low, low prices!

Delta, now with 9 small jet lift operators, has the best plan which will always result in low costs! Delta will never concentrate their small jet lift with one or two companies. The Comair strike, at about .75 $billion loss, taught them a valuable lesson. Like Mr. Grinstein said in so many words, like a few other things in life, "it's sometimes better to rent than to own!" It's certainly better to have a competitive pool of suppliers when you are trying to "let out" your work--this allows Delta to achieve low and competitive costs--not necessarily the lowest costs in each instance! It is in Delta's best interest to balance and meter their outsourced work so that they can maintain a pool of multiple suppliers--as long as the supplier keeps his costs in "the box."

To put it in perspective, as a consumer, you can find significant cost savings when there are multiple supplier options competing for your dollars! How much money do you spend with Walmart, the internet, or on ebay? Limit your options by desiring only specialty products with limited and in some cases one supplier, and you will pay top dollar! Import and sports cars usually have limited suppliers and cost more money to buy and to maintain!

In summary, no regional carrier will ever again have an industry leading contract! Otherwise, they will be extinct in a short time! All small jet operators will have to operate with "costs in the box." Sorry to inform you, but his is only phase 1. Like Walmart and Sears, once Delta gets the system set up, they will continue to tweak and squeeze the margins on their suppliers. There will be downward pressure on the margins that Skywest, Republic, Mesa, Pinnacle, and the others enjoy today--it's just down the road a bit! This will result in downward pressure on labor costs. It has worked in the retail industry for years and it will work here!

Moral of the story for aspiring pilots: Spend your $70,000 on a good MBA degree or go to medical school! The return on your investment in this occupation will continue to evaporate!

 

[fam62c]

There's nothing magic about an "RJ." It's just another airliner. The key to the whole deal is matching the proper sized airplane to the market requirements. Some markets are for 777's, some are for 737's and some are for 50 seaters. While it may be true that many 50-seaters are being used in markets where they don't belong; I think we are a long way from the end of the 50-seater. Everybody talks about the ASM costs of the 50-seaters but the really important number is the total segment cost. Some markets simply don't have the passenger traffic to support 737's and A-320's. ASM is irrelevent unless the load factors to support the equipment exist. If there were no regional aircraft smaller than 50-seaters there would be a lot of cities that would have either no service at all or very low frequency of service.