More Boyd-isms for Delta and RJs...

[On Your Six]

The RJ Glut

Based on initial (and aggressive) steps taken by both Northwest and
Delta over the last week, it's becoming clear that when the music stops,
a whole passel of "regional" jets won't have any place to sit. Except
maybe in the desert.

Delta is aggressively adjusting its schedule, and it appears it's using
the chapter 11 opportunity to pare down the number of RJs in the system.
Lots of point-to-point RJ flying to Florida is going away, and RJ
departures at SLC are being cut by 20%. More at this week's
Airports:USA™ Forecast Flash.

Four Engines Are Nice. Until You Get The Bill. Northwest intends to
cancel leases on all 35 of the four-engined Avro RJ-85s that are being
operated by Mesaba. While this airplane is eons different from the CRJs
and ERJs that are fixin' to get parked, the reason for the action is the
same as what's being done at Delta: these machines are getting too
expensive to operate.

In Danger: Comair - unless it can get its costs down, it's entirely
possible that Delta will shift flying to other small jet providers,
regardless of who owns them. There appears to be an iron-clad, chapter
11-proof agreement with Skywest/ASA, so if some RJ lift has to go, it
may well be at Comair.

Possible Winner: Mesa. This entity has not only low costs, but
management that can get deals done. Any SJP with higher costs, could be
replaced with Mesa.



SLC: Delta Re-Alignment
A Re-Structuring. Not A Pull-Down

Delta Air Lines announced plans to re-structure its SLC connecting
operation within days of its bankruptcy filing. Frequencies are cut by
14%, with capacity being brought down by 16%.

These reductions need to be kept in context, however. As at
Cincinnati/Northern Kentucky International, some of this reduction is
merely an adjustment for flight increases added in the past year as a
result of shifting resources from the now-closed DFW DL hub operation.

SLC is a critical part of Delta’s future. If SLC fails, Delta becomes
locked into being an East-of-The-Mississippi carrier, a.k.a. US Airways,
Phase II. An analysis of Delta’s program for the SLC hub would indicate
they fully understand this.

· Re-Sizing The Hubsite Operation. SLC is not a large O&D
market. The Delta changes appear to be ones to adjust the levels of
connectivity. Both mainline and CRJ frequencies have been reduced by
20%. Conversely, turboprop (Brasilia) departures will be increased by
almost 11%, as a result of higher frequencies in existing markets. Note
again that the reductions are off a recently-increased level of flight
frequency.

· More Spokes. The number of nonstop destinations served is
being increased, thereby strengthening the hub. Added: BDL, CLE, MEM, OGG.

· Tweaking. Not Major Surgery. Some of the adjustments are a
lot less dramatic than they appear on the surface. SLC-PHX is being
reduced from 13 daily departures to just four. Seat capacity, however,
is being reduced by only 90 seats, from 690 to 600, mainly due to the
fact that it’s 4 150-seat MD-90s replacing the 13 RJ flights. On the
whole, this will improve economics of operating this feed market,
especially when the main competition in the market is Southwest.

· No “Opportunities” For LCCs As A Result of SLC Restructuring.
Contrary to some media “reports,” none of the changes represent any
material opportunity for new competition, LCC or legacy, at SLC. There
is no wholesale slashing of service. Delta tended to generally cut just
one or two flights per day in many markets. Only two – MSY and ICT – are
being cut completely. MSY is for obvious reasons. The elimination of
SLC-ICT was announced several weeks ago, and is due mostly to the fact
that the market was a dog, with @ 25% load factors on 50-seat jets. No
“opportunity” for anybody here.

· Alliances. Not Mergers. Delta is clearly focused on building
SLC on the strength of its alliances with Northwest and Continental,
with additional or new service to MEM. CLE, and IAH. This gives enormous
new “barbell” markets – particularly small and mid-size – that will flow
new system traffic for all three carriers. These alliances are the
future, not mergers. The media babble about “mergers” is at this point
mostly musings by journalists and analysts who don’t look beyond a
glance at a route map.

· Fewer RJs In The Cards. But Maybe Not In The Desert. With
regard to fleet strategy, this schedule will need 9-10 fewer CRJ-200’s
and 5-6 fewer CRJ-700’s than the one it replaces. The announced Florida
cutbacks in combination with the SLC changes leave an excess of small
jets in the Delta system. Don’t be surprised if at least some of these
units make one last stop at the courthouse to cancel a lease or two on
their way to desert.

· E-Jets: More To Come? SLC is a perfect market for 70-110 seat
E-Jets. They have the range, comfort, and service transparency missing
in 50-70 seat RJs. As more EMB-170’s come on line, we expect that Delta
will enhance service patterns between SLC and mid-size cities in the
South and Midwest. Many of these markets represent sheltered traffic
flows that have significantly greater profit potential than in slugging
it out with Southwest in markets like SLC-RNO.

Given this schedule realignment and what we believe will be DL’s SLC
strategy going forward, our revised forecast indicates that enplanements
at SLC will be down slightly in 2006, coming off the 2005 capacity
bubble. It will return to a growth mode in 2007. The unknowns are the
number of E-Jets that DL will be able to add, and the net new revenue
fed to and through SLC from the CLE/IAH/MEM alliance hubs.



Another interesting commentary from Boyd... Didn't Delta just add new 50-seat RJ service from MCO to DFW, MCI and BTR?

 

[blzr]

I was in SLC last Wednesday and heard a Candler call sign. I thought I was hearing things and then I heard it again on twr freq. I didn't know you guys flew out there any more.?

 

[Plug]

I was in SLC last Wednesday and heard a Candler call sign. I thought I was hearing things and then I heard it again on twr freq. I didn't know you guys flew out there any more.?

Been out there for almost 3 years now, started a base there in Feb.

 

[blzr]

Ok. I thought I rememberd a thread on here about ASA pulling out of SLC.

 

[BID]

Did I read this correctly, added service to IAH from SLC? Was this already announced?

 

[fifty30retard]

RJ's have their place but it's gotten out of hand. I bought tickets for my wife and son to go from Texas to New England. I jumpseated and the crew could not have been nicer but over three hours on the first leg. Sorry but never again. They are fine for thin markets under two hours but anything over that is ridiculous.

 

[General Lee]

Did I read this correctly, added service to IAH from SLC? Was this already announced?

Travelnet says 4 daily flights between those cities. One 70 seat RJ, two MD90s, and one 733. You know, large planes between large cities, right? That is supposed to be how it works, right?


Bye Bye--General Lee

 

[PHXFLYR]

You know, large planes between large cities, right? That is supposed to be how it works, right?


Bye Bye--General Lee[/QUOTE]



Uhhh......no. Not all the time.


PHXFLYR

 

[General Lee]

You know, large planes between large cities, right? That is supposed to be how it works, right?


Bye Bye--General Lee

Uhhh......no. Not all the time.


PHXFLYR[/QUOTE]

I know, and that has been our problem. RJs should fly from hubs to small/medium sized cities, or point to point from large cities to small cities. When you throw them against AA on routes from MCO to DFW, you are asking for a loss. Especially with 50 seat RJs, which we are doing. Maybe the MCO to BTR route will be a good one for us, but the MCO to DFW and MCI are going to be money losers.

Bye Bye--General Lee

 

[Heavy Set]

You know, large planes between large cities, right? That is supposed to be how it works, right?


Bye Bye--General Lee

Uhhh......no. Not all the time.


PHXFLYR[/QUOTE]

Put an RJ against a 737, a 717, an E170 or an A319 and the RJ will lose every time in the mind of the business traveler. I've flown on those Mesa CR9s on trunk routes and they are just long tubes with little comfort. For business travelers, you just have no room to work in flight and most of the time your carry-on bags won't be within reach with the much smaller bins. Putting an RJ on a LCC-competing route is IDIOTIC given the poor economics alone, but the lack of comfort is a double whammy when passengers avoid the flights and choose alternatives...

 

[BID]

Could not agree with you more, I just sat next to a business customer enroute to IAH, and he told me he avoids the ERJ. It works for him on a 1.5 hour flight, but almost three hours is too long. Huh, just want the studies have shown at UAL.

The 70 seat is much better than the ERJ, but you still get that "tubular" feel.

Right now Delta has three 737's goin to IAH so it looks like they will add a 70 seat, better than nothing. Does the MD-90 hold more folks?

Regarding Boyd, I don't know what to think, but it does seem like the 50 seat RJ has its days numbered. The question is who will fly the 90-100 seat aircraft?Please be mainline, regardless of the pay rate, just get them on the property. Lets get this right this time!

 

[English]

Hey BID, get back to work!

 

[~~~^~~~]

For high revenue business travellers frequency is King. If the choice is a cramped seat or another night in the hotel away from the family, the cramped seat always wins. That is why an RJ goes ATL-JFK at the crack of dawn.

and, I think the CRJ200 equipped with 40 seats is the most comfortable narrow body ride Delta has short of first class in anything. Besides, the Connection stewardesses are better looking.

Of course a 40 seat RJ is just begging to be parked - 20% less revenue with the same fuel burn as the 50 seaters.

 

[Heavy Set]

For high revenue business travellers frequency is King. If the choice is a cramped seat or another night in the hotel away from the family, the cramped seat always wins. That is why an RJ goes ATL-JFK at the crack of dawn.

and, I think the CRJ200 equipped with 40 seats is the most comfortable narrow body ride Delta has short of first class in anything. Besides, the Connection stewardesses are better looking.

Of course a 40 seat RJ is just begging to be parked - 20% less revenue with the same fuel burn as the 50 seaters.

Fins,

I think that the "frequency is king" notion was the one that Fred Reid used to convince the Delta board to finance hundreds of RJs for ASA and Comair... That was the rationale used. However, now that you have low-cost carriers flying the same routes with larger aircraft, lower fares and pretty good frequency, the RJs just don't work on the popular trunk routes - that's a fact. All it takes is the LCC adding more flights on the same routes and it will become uneconomical to fly the RJs with competing low fares...

I remember when AWA used Mesa CRJs (primarily CR7s and CR9s) on the popular PHX-LAX and PHX-SNA routes and they competed against SWA 737s. Well, business travelers were very vocal about their dislike of the CRJ and its cramped quarters. If you look at the schedule now, you won't find many CRJs - only A319s, 733s and 757s. With lower fares making RJ economics difficult, you won't find many RJs on the trunk routes. Instead, they should be used on non-LCC routes where nonstop point-to-point service (like PHX-MRY or PHX-Santa Barbara) can charge a premium (business travelers would probably accept the cramped conditions if they can fly nonstop)... In this case, the RJs can be "somewhat" profitable because the airfares tend to be higher on thinner routes where LCC competition is non-existent. Frequency doesn't work on trunk routes with RJs in a low-fare environment anymore...

 

[FurloughedAgain]

"For high revenue business travellers frequency is King. If the choice is a cramped seat or another night in the hotel away from the family, the cramped seat always wins."

This is true. But at what expense? How many customers do you LOSE to an LCC or competitor that flies a larger aircraft? Maybe even one equipped with a laptop power port.

I live with a business traveler, so I hear all of her gripes.

• Boarding via airstairs vs. jetway in all weather conditions
• Inoperative APUs prior to boarding (she doesn't want to sweat when she is dressed for a business meeting)
• Tray-tables are not large enough to use the laptop
• CRJ has the air-conditioning conduit running under the windows at ankle-height. Limits underseat storage.
• No opportunity to upgrade to first-class
• Terminal "C" in Cincinnati was an afterthought. Riding a bus to get to a train to get to the street is time consuming.

Most of her gripes deal with a simple premise. Time is money.

It is difficult for us to sometimes understand because, as pilots, we dont view time dedheading or commuting as lost productivity. For us, its time to take a nap, or read a book.

But for the legions of road-warriors who fly the airlines every week, it is much more. It is time away from the office, from cell-phones, from co-workers, to get some actual WORK done without interuption.

Yes, frequency is king. However having the space to use a full-sized laptop, or extract documents from the carry-on under your seat in-flight without being a circus contortionist.... those are invaluable.

As a businesswoman, the ability to walk off of the airplane in a dry, heated or air-conditioned jetway is invaluable. It allows her to look presentable if she is going directly to a meeting with her client.

The RJ has had its day. It took the traveling public from the Saab and the Shorts to a more dignified method of air travel. Consumers are fickle though. Faced with the option of an RJ vs. an E-Jet, or a full sized LCC... they will likely choose the latter...

...unless its that last flight home and will keep them from having to spend one more night in a hotel.

Is that the kind of customer service we want the airlines to provide?

"I'll ride it if I have to to get home tonight."

Nobody is expecting PanAm Flying Boats. White glove service. Staterooms. Wine Stewards. Live entertainment.

But if given the option between a CRJ and an Airbus.... what would you choose?

 

[twobits]

I guess since we are so smart on this board then we should be in charge of revenue management...... or we could just fly them and constructively figure out how to stop the race to the bottom (it will not fix it self and ALPA has done little to help).


Why don't we start taking a portion of revenue just for pilots and use a 4 month moving average divided by the 4 month moving average of active pilots to determine pay rates. Why this works? there is motivation there for us and it fixes the amount of money management pays to pilots. This way in bad times the amount of money pilots make goes down, without having to renegotiate and in good times, pilot pay goes up. This leaves ALPA left to discuss work rules, scheduling, etc.... but it would be in the pilot groups best interest to be more productive, since everyone wants a bigger piece of the pie.

 

[Texx]

I know, and that has been our problem. RJs should fly from hubs to small/medium sized cities, or point to point from large cities to small cities. When you throw them against AA on routes from MCO to DFW, you are asking for a loss. Especially with 50 seat RJs, which we are doing. Maybe the MCO to BTR route will be a good one for us, but the MCO to DFW and MCI are going to be money losers.

Bye Bye--General Lee

I thought you were a smart guy and could figure this one out. It's called "FF" program. That is the only reason DAL did it for those FF that want to take the family to Disney, and not go through ATL, on their miles.

 

[On Your Six]

I thought you were a smart guy and could figure this one out. It's called "FF" program. That is the only reason DAL did it for those FF that want to take the family to Disney, and not go through ATL, on their miles.

Those routes will be money losers if only FF miles are used. Not everyone flying to MCO is going to Disneyworld....

 

[ASADFW7]

Okay I know this is a theme that comes up over and over again. I fly an CRJ however I do not make the business plan for the company I am employed by or fly under. I flew the Brasilia before the CRJ, and the industry shift to CRJ's or Erj was not the downfall of mainline. I am tired of people blaming the regionals for the downfall of mainline. It reads like the RJDC crap and save mainline crap misses the point, whatever end of the stick you are holding, right now there is a good chance the crap is going to rub off on you. Either mainline or the regionals, we all are trying to make a living and not at the expense of each other. However, in most cases we speak publicly out of one side of our mouth about solidarity, however the public forum that is anonymous like this we cut each other down to the bone. It is just sad to see. Attack me as you want to, most of these posts are not debate or sharing information any more, they are avenues to vent and be frustrated. Blame not responsibility, reaction not pro-action, we are all bleeding and the last time I look it is all the same color of red.

 

[Master Shake]

Okay I know this is a theme that comes up over and over again. I fly an CRJ however I do not make the business plan for the company I am employed by or fly under. I flew the Brasilia before the CRJ, and the industry shift to CRJ's or Erj was not the downfall of mainline. I am tired of people blaming the regionals for the downfall of mainline. It reads like the RJDC crap and save mainline crap misses the point, whatever end of the stick you are holding, right now there is a good chance the crap is going to rub off on you. Either mainline or the regionals, we all are trying to make a living and not at the expense of each other. However, in most cases we speak publicly out of one side of our mouth about solidarity, however the public forum that is anonymous like this we cut each other down to the bone. It is just sad to see. Attack me as you want to, most of these posts are not debate or sharing information any more, they are avenues to vent and be frustrated. Blame not responsibility, reaction not pro-action, we are all bleeding and the last time I look it is all the same color of red.

Well put!

 

[FlyBoeingJets]

Revenue management is very difficult and can fluctuate almost daily.

If a market can support 200 passengers a day it may be foolish to put 2 MD-80's or 737's on it. A mix of a CRJ and a narrowbody may be better. And, as pointed out earlier, the narrowbody during the day for the business traveler with the CRJ for a late flight sounds ideal.

Then there is the next leg or 2 after. If the plane is full on the next leg, is it o.k. to have it 60% on this leg? Even with 2 or 3 CRJ's full on both legs, you would lose revenue on the next leg with less capacity on it. Particularly if the next leg has high yields. It's a balancing act. When you can keep the average daily narrowbody loadfactor, and yield, up the less than 70 seaters lose money.

The ballgame will change with 70-110 seaters. Perhaps only slightly, but the balance of power will significantly shift. International routes with labor making 20% less will again subsidize operations on domestic routes to fend off LCCs and other legacy competitors. We will see some of the same strategies we saw in the mid 1990's. But it will be different with the bigger feed (or smaller mainline E-jets).

We, the LCC's, are seeing the calm before the storm. Hub operations appear to be under great pressure with proposed cuts. The next year will be good for LCC's. But the legacies are just preparing the battlespace before they get funding for, buy, and deploy the new E-jets.

 

[Groucho]

Return of the Turboprop?

It is true what has been said about large aircraft vs. Rj's vs. turboprops.

The customer wants the big airplane, and high frequency and low price. This formula only works in about 20% of the total city pairs in the US.

There are some routes that cannot be flown profitably by an RJ. Not with these fuel prices. Sometime in the near future, some operator is going to go back into an aircraft like the Q-400 big time and with high fuel prices this will be the airplane to beat.

Do customers really like turboprops, No, but they will ride on them if the price is right. If you put an Rj up against a Q-400 and sell the Q-400 ticket for $100.00 less you will fill the Q-400 up. The pax will grumble but they will get on. Price is key and with a very much lower fuel burn the Q-400 class of turboprop can do some jobs well that the Rj cannot.

Industry managment has over done the RJ, just like they have over-hubbed the nation. A quality turboprop, if there really is such a thing, is what the industry needs on many short routes.

 

[On Your Six]

Okay I know this is a theme that comes up over and over again. I fly an CRJ however I do not make the business plan for the company I am employed by or fly under. I flew the Brasilia before the CRJ, and the industry shift to CRJ's or Erj was not the downfall of mainline. I am tired of people blaming the regionals for the downfall of mainline. It reads like the RJDC crap and save mainline crap misses the point, whatever end of the stick you are holding, right now there is a good chance the crap is going to rub off on you. Either mainline or the regionals, we all are trying to make a living and not at the expense of each other. However, in most cases we speak publicly out of one side of our mouth about solidarity, however the public forum that is anonymous like this we cut each other down to the bone. It is just sad to see. Attack me as you want to, most of these posts are not debate or sharing information any more, they are avenues to vent and be frustrated. Blame not responsibility, reaction not pro-action, we are all bleeding and the last time I look it is all the same color of red.

Good post. I think a lot of the concern focuses on the inflated expectations of the RJ and the potential for profit. I agree that the "frequency" theme was way overused in the latter 90s to justify hundreds of orders. Indy Air figured out that high frequency doesn't mean profit in this environment. It's certainly not anyone's fault but management - but most of them are long gone with their golden parachutes (i.e., Fred Reid and Leo).

Times have changed - simple as that. With the advent of the LCC model, the old hub-and-spoke and RJ-frequency models don't work as well. From an international feed perspective, the hub-and-spoke does work, but the LCCs have changed a lot of the rules. With such low fares on LCC-competitive routes, you just can't spread the low revenue well over the 50 seats and still squeek out a profit - its very difficult. Midway, Indy Air and AirTran (using Air Wisconsin CRJs) figured this out pretty quickly....

 

[FDJ2]

I thought you were a smart guy and could figure this one out. It's called "FF" program. That is the only reason DAL did it for those FF that want to take the family to Disney, and not go through ATL, on their miles.

YGTBSM. Thanks for the good laugh.

 

[DrunkIrishman]

A few thoughts-

1. Delta bought too many RJ's. There you go, I concede that point. This is especially evident on routes were AirTran is operating five 717's against ASA's numerous RJ's. Five flights is enough choice for travelers to choose AT over DAL, especially with the possibility to upgrade to Buisiness class.

2. Business travelers b$tch about everything. There is a direct positive correlation between medallion status and b$tching. Furthermore, you will not convinve me that a seat on the 70 out west is better or worse compared to both SWA and FRNT. All three are one class configuration! The only difference is when UAL and AA get involved.

3. The same people that tell you they are loyal DAL patrons are the same people that will go to Priceline and buy the cheapest ticket - then they will b$tch about the service they got on that darned RJ!

4. (Follow-up to #2) A big reason why the general public thinks the RJ is a small tube is...BECAUSE IT IS! They all are! You want 747 service to Elko, NV? No problem, tickets start at $1700. Until they are willing to pay that, RJ service stays (or in Elko's case, the E-120).

5. (Follow-up to #4) The 737-800 coach seats are the most uncomfortable seats I have ever been in - even more so than a college lecture hall. People don't complain about these seats because they are distracted with a cheap form of IFE. Put an IFE system on the RJ's and I would be willing to bet my job that complaints would decrease some. Furthermore, put power adapters in the seats for laptops and even the loathsome business traveler may b$tch a little less - but I doubt it.

 

[FurloughedAgain]

"loathsome business traveler"

Nice way to talk about your bread and butter.

 

[General Lee]

A few thoughts-

1. Delta bought too many RJ's. There you go, I concede that point. This is especially evident on routes were AirTran is operating five 717's against ASA's numerous RJ's. Five flights is enough choice for travelers to choose AT over DAL, especially with the possibility to upgrade to Buisiness class.

2. Business travelers b$tch about everything. There is a direct positive correlation between medallion status and b$tching. Furthermore, you will not convinve me that a seat on the 70 out west is better or worse compared to both SWA and FRNT. All three are one class configuration! The only difference is when UAL and AA get involved.

3. The same people that tell you they are loyal DAL patrons are the same people that will go to Priceline and buy the cheapest ticket - then they will b$tch about the service they got on that darned RJ!

4. (Follow-up to #2) A big reason why the general public thinks the RJ is a small tube is...BECAUSE IT IS! They all are! You want 747 service to Elko, NV? No problem, tickets start at $1700. Until they are willing to pay that, RJ service stays (or in Elko's case, the E-120).

5. (Follow-up to #4) The 737-800 coach seats are the most uncomfortable seats I have ever been in - even more so than a college lecture hall. People don't complain about these seats because they are distracted with a cheap form of IFE. Put an IFE system on the RJ's and I would be willing to bet my job that complaints would decrease some. Furthermore, put power adapters in the seats for laptops and even the loathsome business traveler may b$tch a little less - but I doubt it.

I like your number 5. That sounds like a great idea, except you as a pilot will have to pay for it, just like we have at mainline. The Jetblue 100 seat rates (like the future 100 seat rates at Delta) are lower to pay for IFE on those birds (at this time no IFE on any mainline plane at DL except Song). If you want them on 50 or 70 seaters, you will have to take a huge pay cut. Is it worth it now?


Bye Bye--General Lee

 

[DrunkIrishman]

GL-

The IFE I was referring to are on the 737-800's, 767's, 777's, MD-90's. Of course the 777 is the best with one in every seat. As far as a pay cut, I negotiate rates of pay to fly 'em not to equip 'em. Hold your head in shame if you accept the E-190 pay rates that were offered. Those are bad, even for us lowly regional folks.

Fur.Again-

Lighten up Francis.

 

[General Lee]

GL-

The IFE I was referring to are on the 737-800's, 767's, 777's, MD-90's. Of course the 777 is the best with one in every seat. As far as a pay cut, I negotiate rates of pay to fly 'em not to equip 'em. Hold your head in shame if you accept the E-190 pay rates that were offered. Those are bad, even for us lowly regional folks.

Fur.Again-

Lighten up Francis.

I think DL will negotiate a bit for the 100 seater, from what I have heard from 4th floor people. I have also heard the 100 seater COULD be the 737-600. The rates would have to go up if that is the case.

Bye Bye--General Lee

 

[FR8mastr]

People might complain about the Q-400 as when they saw it from the terminal, but once they get on it they wont anymore. No comparison, tons more space in the Dash, and the kicker is up to 500nm stage length it can fly within 10 min. of an RJ