How much for an SJ?

canadflyau

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I am sure someone on this site has the info I am curious about..

How much much does it cost to purchase 1 CRJ or ERJ these days?

I am asking for two reasons.. (#1) I am trying to figure out exactly how many SJ's could be purchased/financed for $1billion. (#2) I heard the price has gone up on these aircraft dramatically b/c of their high demand, in fact I have been told you could pick up a used 727, 757, DC-10, MD-11, MD-80, or F-100 for dramatically LESS money. Just curious.. (and I am not asking about operating costs, that is a whole different discussion) i just want some purchase cost figures for crunching.

thanks, jason:)
 

canadflyau

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I found a little info

The list price for ERJ 145ER is $17.79mil
the ERJ 145 LR $18.49mil

It also said b/c CoEx was the launch customer it only paid a little over $13mil per aircraft b/c of the large size of the order. (By the way, my research turned up that Continental is doing ok and still plans serious growth which would bring the fleet size in excess of 611a/c with 99 more a/c for co-ex by 2003year end.)
here is the link for that info: http://www.continental.com/corporate/pdf/continental_8k_2002_04_16_01.pdf

So if pappa Dave was to go spend all the $1 billion loan guarantee money to purchase the ERJ 145 series at say $16mil each.. (and boost a foriegn economy with gov backed dollars) he would get 62.5 airplanes.. are the wo's fighting over the mere 62 a/c US air could initially get? or would he be able to use the $900million US backed loan guarantee in a different way to obtain more a/c? (I am trying to learn about the acquistion of these SJ's and figure out how many they will really be able to obtain)

Input PLEASE!
 

surplus1

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Remember that few airlines actually "buy" the aircraft. They are mostly leased. That makes the "order" numbers look great but changes completely the actual capital outlay required.
 

canadflyau

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Thats what I thought.. So, how could I figure out how many aircraft (using the ERJ 145 @$16mil) could they lease with the 1 billion dollar backed loan? Any ideas???
 

surplus1

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You'd have to know the lease rate, usually per hour, to get close.

Lease agreements can vary substantially. Some of the variables are: spares (parts) included, engines included or leased separately from the engine manufacturer, avionics package, term of the lease, penalties for early return, interiors (included or not), training included (how much, how much sim time), are they new off the production line or returned from other leases, cycle limitations or no, number being lease, delivery dates, can you sub lease or not, any maintenance guarantees, etc., etc.

Even though its the same airframe, airlines do not necessarily configure or equip their airplanes the same way. You really can't be accurate unless you can access the contract.

Its similar to a car lease, with many more options. It can be a very complex package or a relatively simple one. Tough nut to guess at.

airlines, aircraft and engine manufacturers tend to guard the numbers of a specific deal very closely.

U supposedly will have authority for 465 of the things. It takes a long time to phase in that many airframes of a new time. Just finding the simulator time to train the pilots is going to be a major problem. There's no surplus of simulators and building one costs more than the airplane and takes over a year.
 
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canadflyau

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Thanks

Ok... we are getting warmer, you seem to have a good hand on the subject. Here is another question or two.. From my understanding U will receive $900million of backing from the US Gov for a $1billion dollar, this money is actually not tangible, but just a gaurantee from the Gov that they will back it up like a co-signee. Correct?

I have been told, and I want to find out for myself, that the 1 billion wouldn't even come close to 465 a/c. Also, taking into account all the afformentioned issues by Surplus 1. If you stayed in the ratio they have with sims:aircraft, they would need 7 or more sims to accomodate training.

Take Continental for example.. they were in a similar situation as U, had about $1billion cash on hand and they were able to order 100 SJ's or something like, while probably putting everything they had asset wise up as collateral. Personally I think that U will be in the market for a little less than Continental was, because the list price is $4million more for each a/c in 2002... and if on top of all that, U is going to start a whole new operation, MDA, they are severly limiting that purchase with additional overhead (facilities, management, operating certificate, etc) by not using the three WO's that are already in place.. Continental did it right, Bethune was streamlining while bringing in his new SJ's, unlike U who wants to get more top heavy. Also, SJ's are so profitable b/c of the segment of the market they are under... MDA will need 40 of 50 seats filled every flight to BREAK EVEN, instead of the normal 25-30.. The cost structure will be the highest of ANY regional! The lowest paid pilot will make $50K/year, I believe even the FA's will be the furloughed ones from U making will above what the average Regional pays...

Any one else have any educated guesses at the number of SJ's we will see at U? Also, Continental purchased their SJ's in 1996, they had 137 at year end 2001, 5 years later. The WO's have time to keep a cool head about all this. Lets don't panic and do ANYTHING WE WILL REGRET!

Jason
 
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