Dornier 335
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The 50-Seat Jet Non-Conundrum
When They're Gone, They'll Be Forgotten
Over a decade ago, Global Fleet Trend & Demand Forecasts accomplished by Boyd Group International were alone in predicting that the market role of the 50-seat (and misleadingly named) "regional jet" had reached its peak and the orders for these aircraft were in line for a major drop-off.
We advised our OEM clients that the demand for these small jets had essentially already been met, and there was an unattainable "order glut" that would not ever be fully produced. (For example, at one time, the combined Delta system had nearly 1,000 of these things on order and option.). We pointed out that the huge orders seen in the 1990 - 1995 period were due to airlines filling a fleet gap, and not due to long-term intrinsic demand.
Needless to say, that went counter to ambient thinking at the time. Needless to say, the rest of the consulting industry harrumphed loudly at this obvious nonsense. "Everybody knew" that RJs were the future of airline planning.
More Heresy: Loss of 50-Seaters Won't - Won't - Leave A Hole In Air Service. Now that it's about as obvious as water over Niagara Falls, the demise of these flying machines is being confidently 'forecast' by all the industry cognoscenti. For entertainment value, the usual suspects in the consulting field are predicting all sorts of outcomes of the demise of 50-seaters from the US airline industry...
What To Watch For. Sound & Fury Signifying A Non-Event. This November, at the 18th Annual Boyd Group International Aviation Forecast Summit, we're going to be covering the effects of a wide range of fleet changes on airports and communities.
As for 50-seat jets and their impending disappearing act, here are some of the dynamics we'll be discussing:
What this means is that there is no more "air service grab bag" - with the misleading assumption that there are lots of airlines for a community to go after. Just doing a blind study to "find the right airline," or trying to determine "where our people want to go" might thrill the C of C, but won't do diddly to attract airlines that no longer exist.
Bottom Line: The end of the 50-seat era is coming a lot faster than typically assumed, and with a lot less drama than it might appear.
There is air service life after 50-seaters.
The 50-Seat Jet Non-Conundrum
When They're Gone, They'll Be Forgotten
Over a decade ago, Global Fleet Trend & Demand Forecasts accomplished by Boyd Group International were alone in predicting that the market role of the 50-seat (and misleadingly named) "regional jet" had reached its peak and the orders for these aircraft were in line for a major drop-off.
We advised our OEM clients that the demand for these small jets had essentially already been met, and there was an unattainable "order glut" that would not ever be fully produced. (For example, at one time, the combined Delta system had nearly 1,000 of these things on order and option.). We pointed out that the huge orders seen in the 1990 - 1995 period were due to airlines filling a fleet gap, and not due to long-term intrinsic demand.
Needless to say, that went counter to ambient thinking at the time. Needless to say, the rest of the consulting industry harrumphed loudly at this obvious nonsense. "Everybody knew" that RJs were the future of airline planning.
More Heresy: Loss of 50-Seaters Won't - Won't - Leave A Hole In Air Service. Now that it's about as obvious as water over Niagara Falls, the demise of these flying machines is being confidently 'forecast' by all the industry cognoscenti. For entertainment value, the usual suspects in the consulting field are predicting all sorts of outcomes of the demise of 50-seaters from the US airline industry...
- On one hand, we've seen Chicken Little "studies" propounding that there needs to be immediate action by the industry and government to deal with the air service disaster that will befall small communities around the nation when these jets go out of service. (After all, these are "regional" jets, right?)
- At the other end, there are the enthusiastic prognostications that, because the glut of used RJs will cause lease costs to supposedly drop to somewhere just above annual payments for a used Toyota, there will be a resurgence in "regional" airlines and in rural air service. Little things like fuel costs, maintenance, and the less-than-stellar success of Independence Air and branded ExpressJet are not to be considered in this brilliant prognostication.
- Somewhere in the middle, there have been some patently-crackpot suggestions - like, communities could acquire control of their own RJs and enter Air Service Valhalla, flying them where they want and making money with them where professional airlines couldn't. Or, the great opportunities for converting these airframes to air cargo are mentioned from time to time.
What To Watch For. Sound & Fury Signifying A Non-Event. This November, at the 18th Annual Boyd Group International Aviation Forecast Summit, we're going to be covering the effects of a wide range of fleet changes on airports and communities.
As for 50-seat jets and their impending disappearing act, here are some of the dynamics we'll be discussing:
- Economic Impact of Small RJs Is Vastly Over-Assumed. These are small jets, with "small" capacity. Their removal from airline fleets is more of a hole in the ATC flows than in traffic and revenue flows. At one major airline mega-hub, a Boyd Group study indicated that the retirement of all 50-seaters would result in loss of nonstops to over 30 destinations. That looks dire.
- The Dire Effects On Communities Are Also Over-Assumed. In fact, the retirement of these airliners can't come too soon for a lot of markets. Analyses by Boyd Group International have shown that in many communities, the retirement of 50-seaters will not result in lower schedule frequencies, as the veneer analysts are predicting. Current traffic demand at a large number of hub-spoke cities exceeds the per-flight capacity of these airliners - the markets need and will immediately support larger units of capacity.
- No EAS Change. Certainly, there are some airports that will see negative outcomes with the end of this RJ era. Some EAS markets now served with poorly-filled RJs will find a surprise or two down the road, when there are no such aircraft left. But in most cases, these are communities that have alternative access at other regional airports. Muskegon traffic will completely shift to Grand Rapids. Grand Island traffic will shift to Lincoln, and so on. Finally, the retirement of 50-seat jets won't affect the rural communities that are already down to EAS service with single-seat airliners nobody wants to get on, anyway.
- The Mission Applications of RJs Are Inaccurately Assumed. The veneer analysts assume that these jets are only used in small market applications. Wrong. Tell that to the passengers on a United flight between Denver and Phoenix, where some of the segments are, surprise! flown with 50-seaters, depending on time of year. The fact is that a lot of 50-seat lift is in missions that won't be materially affected after these machines take up their rightful positions in the desert or as integral parts of Budweiser displays at the local supermarket.
- Retirement Decisions Will Likely Come Rapidly. Oil is again hovering over $100, and that will increase the imperative of getting more of these small jets out of the system. Delta has already moved to shift to larger units of capacity as they cull 50-seaters from their fleets. It's likely that subsequent to the consummation of the AA/US merger, there will be a round of fleet-rationalization that will see wholesale reductions in the number of 50-seaters over the next 3-5 years. There is no choice: the economics of these aircraft - regardless of lease costs - are going south fast.
What this means is that there is no more "air service grab bag" - with the misleading assumption that there are lots of airlines for a community to go after. Just doing a blind study to "find the right airline," or trying to determine "where our people want to go" might thrill the C of C, but won't do diddly to attract airlines that no longer exist.
Bottom Line: The end of the 50-seat era is coming a lot faster than typically assumed, and with a lot less drama than it might appear.
There is air service life after 50-seaters.
