Do RJs make money?

[jehtplane]

Ok smart guy if RJ's are making so much money and break even with 18 pax then why are all the airlines Bankrupt? The fuel spike would have raised break even a passenger or two. FlyI had loads of at least 50%. How come they are going under?
There is my research.

Piss poor management, ridiculously low fares, high fuel costs, and the list goes on and on!

 

[Secret Squirrel]

Piss poor management, ridiculously low fares, high fuel costs, and the list goes on and on!

Now that is a statement I will agree with 100%.

 

[BigPappa]

ATL-ISO @ 392.50 round trip ($196.25 one way). flight time 1.4 hr. 2400*1.4/196

break even point = 18 pax.

 

[BenderGonzales]

Mike Boyd should quit now. You guys obviously have it all figured out.

 

[BigPappa]

Bender why don't you add something constructive!

 

[Secret Squirrel]

ATL-ISO @ 392.50 round trip ($196.25 one way). flight time 1.4 hr. 2400*1.4/196

break even point = 18 pax.

The problem is you do not know how many people on your flight are only going ATL-ISO. I would guess only about 10%. The rest of the people are CONNECTING from somewhere else.

What about the guy that is going from MKE-ISO and connecting through ATL. He payed $420 per the delta website. Are you still attributing $392 to your flight when Delta flew him from MKE-ATL? That is very flawed logic.

This is my last post on this subject. I am not saying that the RJ is a total goat and I think certain markets it can make money. But your theory is not correct.

SS

 

[BenderGonzales]

There is nothing constructive to add to this argument. "RJs" have been around for decades. Up until the mid-90's they were simply airplanes.

DC9-10s, Bac 1-11s, BAe146, F28, F100... all "RJs".

Then a Canadian company decided to start marketing THEIR 50 seat platform to commuters... where employee costs were a fraction of what they were at the mainline.

Management was thrilled. Lower costs, but with the same revenue stream. The customers didn't get an "I have to fly on an RJ" discount.

So yeah. These things may be profitable. But it has NOTHING to do with the vehicles economics. They are profitable on the backs of the poor shmucks who fly them for pennies.

Want to visit the real baseline economics for the RJ? Leverage the total cost for the flight over the number of seats.

More seats? Lower cost per seat mile.

How do the airlines correct for that? By going out to the "Comedy Air Academy's" of the world and finding kids who are willing to sell their soul to strap on a uniform (without the hat of course) and go fly a jet-plane.

Was this at all constructive? No. But I feel better.

 

[say again]

Quick answer- NO!!!! These airfares are ridiculous, and the airlines need to wake up and start charging the flying public whatever it takes to make a profit. ALL airlines must be in on this, but unfortunately I don't see it ever happening.

 

[bvt1151]

Back to basics! Too many financial analysts are trying to reinvent the wheel in the aviation industry. The fact remains that it’s still just a matter of simple arithmetic. Let’s compare a CRJ 200 in this example: The Total operating cost of this RJ is approx. $2400.00 per hour. You can figure that the average ticket costs approx. $350.00 per person (call it a round trip). At our company the average CRJ flight is approx. 1.3 hr. Load factor most of the time is 23 or better. In this case (3120/175=17.8) the load to required to break even is 18 pax. With this in mind you can say that we are making money most of time for our big Mother!

Wow, your numbers are way off. First off, a CRJ 200 costs closer to $1500 per hour, and most passengers on an RJ connect, which means you have to divide the fare by 4, not 2...less taxes.

CRJ Operating Costs (about 3/4 from the bottom):
http://www.airlineempires.net/mambo/index.php?aircraft=629&carrier=OO&year=2005&quarter=2&option=com_content&task=view&id=51&Itemid=31http://www.airlineempires.net////ma...&option=com_content&task=view&id=51&Itemid=31

 

[BigPappa]

bvt,

read the post before you post!

 

[Dash8301]

I think you are being a little bit SIMPLE. I pulled up a round trip ticket on Delta being operated by Comair from IAH to CHS. The ticket was for $332.00 Round trip. This is almost 4 hours of flying each way. Both are on a 50 seat RJ. So lets do your BASIC math again. That is about 8 hours of flying round trip. That means $2400 an hour JUST FOR THE OPERATING COSTS OF THE AIRPLANE. How about advertising, gates, Management, Maintenance, etc. Or does big mother take care of all that? So $2400times 8 hours is $19,200. Divide this by $330 per ticket would require you to have 58 people on your 50 seat airplane to make a profit. Now this is a very simple answer of why you are so wrong. It is logic like yours that made people think FLYI would work.

SS

I think this is why they don't let pilots do the accounting

 

[Tim47SIP]

I think you are being a little bit SIMPLE. I pulled up a round trip ticket on Delta being operated by Comair from IAH to CHS. The ticket was for $332.00 Round trip. This is almost 4 hours of flying each way. Both are on a 50 seat RJ. So lets do your BASIC math again. That is about 8 hours of flying round trip. That means $2400 an hour JUST FOR THE OPERATING COSTS OF THE AIRPLANE. How about advertising, gates, Management, Maintenance, etc. Or does big mother take care of all that? So $2400times 8 hours is $19,200. Divide this by $330 per ticket would require you to have 58 people on your 50 seat airplane to make a profit. Now this is a very simple answer of why you are so wrong. It is logic like yours that made people think FLYI would work.


The problem here is your $2400 estimate. ASA is around $1100 per hour and Skywest is about $1600 per hour. The question should be, does the mainline carrier (contracter) make money? The aircraft themselves can make money, but combined with the above, maybe, maybe not. :erm:

 

[bvt1151]

BigPappa,

Your figures are all wrong. $2400 is way out of line, even on the shortest of segments. You still haven't quoted your "sources" but both the DOT and the SEC say a CRJ is around $1500. Add an 8% profit margin for the regonals, and you're still around $1600. Heck, the CR7 is only $1900 per hour.

SecretSquirrel,

Those numbers include all expenses the airline incurrs, including all maintenance, advertising, gates, and management. Add 'em all up from the top rows, divide it out by the block hours, and you get the cost per block hour. Pretty nice chart.


Skywest Expenses

 

[h25b]

BigPappa,

Your figures are all wrong. $2400 is way out of line, even on the shortest of segments. You still haven't quoted your "sources" but both the DOT and the SEC say a CRJ is around $1500. Add an 8% profit margin for the regonals, and you're still around $1600. Heck, the CR7 is only $1900 per hour.

So you're saying that DOC for an RJ is roughly the same as a light to midsize business jet ???

Maybe true (I don't really care), but I find that hard to believe...

 

[bvt1151]

So you're saying that DOC for an RJ is roughly the same as a light to midsize business jet ???

Maybe true (I don't really care), but I find that hard to believe...

If you own 100 RJ's, and only 1 midsize bizjet, it's extremely similar.

 

[h25b]

If you own 100 RJ's, and only 1 midsize bizjet, it's extremely similar.

If you could tell me what the average fuel burn per hour is for a CRJ you might start in the right direction. I would guess it boils down to an average of around 340 Gal./Hr. So at $2.00/gal. you're looking at about $700/hr. just in fuel. We budget about $200/hr. for maint. on our aircraft. I figure even with economy of scale you'd still see about that for a CRJ/ERJ. So just between the 2 of these you've almost hit $1000/hr.

Figure in all of the huge overhead costs of an outfit like Comair.

 

[suupah]

nevermind

 

[WMUSIGPI]

yea but you forget that the corporate Captain alone is making as much as the Captain, FO, and FA on the CRJ combined.

 

[h25b]

yea but you forget that the corporate Captain alone is making as much as the Captain, FO, and FA on the CRJ combined.

Crew salary is not added in with D.O.C. in corporate (Direct Operating Cost). Everyone's a little different, but things typically included are...

1. Fuel
2. An hourly maintenance estimate
3. Engine coverage program (Power by the Hour, MSP, JSSI, etc...)

I guess since airline guys are paid by the hour they probably are figured in with his estimates. I'd say it's almost impossible to figure this one out due to all of the missing variables.

 

[Ben Dover]

Two words (and they are not mine); "Hub encatchment"