Do RJs make money?

[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"

 

[Flyer1015]

Your $69 might have been on Ifly, I'can't find a ticket that cheap in Delta!

Just searched JFK-TPA, one way, and the date that was already on by default... Dec. 19, on www.delta.com


$67.70

 

[MickeySlapnutz]

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!

Right on! They are cash cows. Plumbs to be picked. Cash registers...just ring the bell and take the money.

Now go buy some FLYi stock and just sit back and rake it in!

 

[Crash Pad]

If it costs $1500 an hour for an RJ then Comair should just become its own carrier. Even I can put 15 people on an airplane at $100 dollars a crack.
Doug Voss a little known industry insider once said "there is no market for the RJ"... another guy Chuck Howell "You just can't make money with an RJ unless someone else pays the bill"
You will note that there is only one carrier that doesn't have someone else foot the RJ bill. That would be FlyI.
The thread started out with a good theory. Airlines have tried to reinvent the wheel... Take an airplane that can't make money on its own but will supply connecting passengers. We lose on one leg but gain on the high volume leg.
Towns like, Macon, CHS, CHW, Hickory NC... Every city on the Skywest route map can most likely not support an RJ. Even if the towns could they certainly can't support 5. Which when I land and see a USAir, United, American, Delta, NWA, and CAL RJs on the ramp I think "Does XYZ city really need that much air service.
Gordon Bethune once had a meeting at CAL in which he said "we are going to stop doing everything that doesn't make money"... That is the wheel. That is how buisness works. You can get caught up in buzz words... Route structure, frequency, RPM, CASM, On time %, Completion factor, etc... At the end of the day an airline has one job in the world... Make Money.

 

[Cadillac]

This thread reminds me of college essay exam questions. The kind where the test asks a question, and someone gets the wrong idea and goes off for their hour and a half in the wrong direction. Then they don't understand why they failed the test when THEY FORGOT TO ANSWER THE QUESTION.

While you guys bicker about CASMs and RASMs, the answer to the question "Do RJ's Make Money," was correctly answered by Bender Gonzales. Yes, they do. But only because the people flying the planes and serving the pax do it for a third of the cost of what mainline pilots will do it for.

 

[DirkkDiggler]

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.