Do RJs make money?

[V1cutsrfun]

Just my .02 cents worth. Isn't the definition of insanity trying the same thing over and over again expecting a different result.

Lets see
Usair, Lots of RJ use
United, Lots of RJ use
Northwest, Avro and RJ use
American, RJ use
Delta, lots of RJ use and SOLD ASA
Flyi, nearly extinct
All but one in BK, lost pensions and bleeding Cash

Southwest, No RJ's
Airtran, No RJ's
Frontier, limited use of the RJ-700
Alaska, Limited use of the RJ (by camparison)

The RJ FAD is over

CAL is the exception, fuel prices dictate a diff biz strategy
Just my one share worth of Flyi stock's worth

 

[JohnDoe]

quote:
"The RJ's don't have to make a profit on a leg by leg basis. They provide feed to a mainline hub, where those passengers board other mainline flights all over the world. "


Trouble is, these days, that is not the only thing that they do. They are being operated point to point, etc., such that they are not "only" providing feed. Not all passengers are connecting. My wife has taken several trips lately where she had to connect, and BOTH legs were RJ's.

 

[DirkkDiggler]

That's a concern you'd have to take up with the accounting department!

 

[tuna pimp]

The $1400 block totals that you guys are looking at for OO do not include any sort of overhead burden. With this data you can analyze the profitability of the aircraft on a DOC basis, or assess comparable missions however it will not tell you whether the RJ flying is profitable or not overall. For this you need to take into account ALL expenses (fully allocated) involved in operating an airline.

 

[Ben Dover]

I think "Ben Dover" hit this one, but it probably went over most everybody's heads. The RJ's don't have to make a profit on a leg by leg basis. They provide feed to a mainline hub, where those passengers board other mainline flights all over the world. That's why US Air flies into Erie, PA 6-8 times a day with flights leaving an average of half full (on a good day). They are trying to lure everyone who flies out of Erie into Philly or Pitt so they can carry on to anywhere else US Airways flies. The RJ isn't required to make a profit from Erie to Pitt in order for it to be considered a success by mainline. It just has to snag those Erie passengers and funnel them into the US Airways system.

Dirk,
Thanks for validating my point.

The next two concept to grasp are those of fix costs vs. variable costs, and their relationship to breakeven point. Suffice it to say that airlines have high fix costs. The traditional carriers have invested zillilons of dollars in infrastructure centered at their hubs. Whether one passenger flies or a million passengers fly via that hub structure the cost is virtually the same. Hence the importance of "encatching" as many people as possible.