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Oh NO! There could be an RJ surplus!

General Lee

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Airline bankruptcies could create regional jet surplus

The market for 50-seat regional jets could soon become saturated if Independence Air files for bankruptcy and liquidates its assets, an aviation analyst said. Northwest Airlines is expected to return some regional jets to lessors, and Delta Air Lines is expected to scale back operations of its Comair regional unit.

With Northwest Airlines set to return 15 CRJs to lessors and Delta Air Lines expected to downsize its wholly owned Regional subsidiary Comair, eyes are focused on Independence Air, which could saturate the market for 50-seat regional jets if it enters bankruptcy and liquidates as some analysts expect. The financially struggling carrier already has cut its fleet from more than 80 CRJ200s to 57, with more reductions likely to follow. "Once Independence files [for bankruptcy], there will probably be a very short time before they liquidate," said Gueric Dechavanne, an analyst with Back Aviation, who spoke at the Valuation Conference and Regional Airline Seminar sponsored by Commercial Aviation Media and Everest Events this week in Alexandria, Va. "Lease rates will depend on the quantity of aircraft hitting the market. RJ leases may be restructured." There currently are 2,000 50-seat RJs in service, he said, with only about 4% parked. Recently, Republic Airways signed sublease agreements with a Mexican carrier to take three of its ERJ-145s, said VP-Marketing Planning and Scheduling Jeffrey Jones. The aircraft have been removed from Republic's operating certificate and more could follow, said a company spokesperson. Republic operates 100 ERJ-135s/-145s and will have 45 Embraer 170s in service by year end. Earlier this month, wholly owned Air France subsidiary Regional converted an order for seven ERJ-145s to six Embraer 190s. Stacey Wilson, an analyst with CIT, argued, "There are places outside the US where 50-seaters can be profitable," adding, "We haven't established a distribution network for secondary markets." For now, manufacturers are handling those markets.

by Sandra Arnoult


http://www.atwonline.com/news/other.html?issueDate=9%2F30%2F2005


Maybe Fred Greed can use the surplus 50 seaters on a shuttle service every 5 minutes from MDW to EWR for Virgin America? Businessmen love frequency........


Bye Bye--General Lee
 

islandhopper

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say it isnt so!
 

Skaff

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I also hear Delta has a surplus of domestic flying. I know you enjoy the woes of regional pilots, but its not too fun when it hits to close to home, is it?
 

Heavy Set

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Skaff said:
I also hear Delta has a surplus of domestic flying. I know you enjoy the woes of regional pilots, but its not too fun when it hits to close to home, is it?
Skaff,

I don't think he was making fun of anyone. The General has been predicting the RJ glut for years it seems. This industry is going to heck quickly and everyone will be impacted.
 

FlyComAirJets

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All hail to the King of the Cheap Shot Artists

Not making fun of anyone? Perhaps, but the intent of the General's post is loud and clear. When he's not taking aim at regional pilots, he's attacking the aircraft we fly. No aircraft, no jobs. Pretty transparent, I'd say.

The little smiley face says it all.

.
 

737 Pylt

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FlyComAirJets said:
Not making fun of anyone? Perhaps, but the intent of the General's post is loud and clear. When he's not taking aim at regional pilots, he's attacking the aircraft we fly. No aircraft, no jobs. Pretty transparent, I'd say.

The little smiley face says it all.

.
Actually if you read the whole post.
Maybe Fred Greed can use the surplus 50 seaters on a shuttle service every 5 minutes from MDW to EWR for Virgin America? Businessmen love frequency........
I think you'll see that he was not poking fun at rj pilots, but at the surplus of these useless (50 seat) aircraft!
737
 

General Lee

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Skaff said:
I also hear Delta has a surplus of domestic flying. I know you enjoy the woes of regional pilots, but its not too fun when it hits to close to home, is it?
That's true. So, we are moving some domestic 767ERs and some 764s to fly international flights that don't compete with LCCs. 28 planes to be exact. We are cutting 16% domestic and adding 25% international. We are parking some older 737-200s and some 733s also. But, we are also using our operation clockwork stage 2 to increase turn times on domestic narrowbodies to try to make up for some of the loss. If you think they are going to downsize too much in ATL and allow the LCCs to get bigger there, you are wrong. A lot of the downsizing is in CVG.

Bye Bye--General Lee
 

General Lee

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FlyComAirJets said:
Not making fun of anyone? Perhaps, but the intent of the General's post is loud and clear. When he's not taking aim at regional pilots, he's attacking the aircraft we fly. No aircraft, no jobs. Pretty transparent, I'd say.

The little smiley face says it all.

.
That isn't a smiley face. I hardly ever use a smiley face anymore. That is a "miffed" face. Look at it again.

Hey, I don't think the 50 seaters being used against the LCCs is very smart. That's why more 70 seaters are being ordered, and maybe even some larger ones (let's hope for mainline above 70 seats...). Most of the 50s will probably be replaced by 70s. Lower fares from LCCs and higher fuel (that Delta pays for---SkyWest says they are "insulated" from high fuel costs----good for them...) makes the 50 seaters obsolete unless they fly to places not visited by those LCCs. Those places are dwindling.

And, I don't like any job losses, and I am certainly not overjoyed about possible Comair furloughs. Nope. Don't forget we had 1310 mainline furloughs.


Bye Bye--General Lee
 
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General Lee said:
Airline bankruptcies could create regional jet surplus


With Northwest Airlines set to return 15 CRJs to lessors and Delta Air Lines expected to downsize its wholly owned Regional subsidiary Comair, eyes are focused on Independence Air, which could saturate the market for 50-seat regional jets if it enters bankruptcy and liquidates as some analysts expect.

Bye Bye--General Lee
The last I heard northwest had not named ANY CRJs as excess or potential excess aircraft to the bankruptcy court. Also, last I heard pinnacle made a statement that they were putting these aircraft into long term storage. Maybe Sandra didn't do her homework (or maybe I am wrong) but I dont think any CRJs are being returned to lessors yet. Probably not smart to return RJs to the same lessors you potentialy want to get your 70-90 seaters from.

Excess and Potential aircraft named in the bankruptcy so far (respectively

http://bankrupt.com/misc/northwestexcessaircraft.pdf
http://bankrupt.com/misc/northwestaircraftleases.pdf
 
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FN FAL

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Heavy Set said:
This industry is going to heck quickly and everyone will be impacted.
Now we have to be impacted too? Great! Just when I thought they wouldn't go there...whoops, there it is.:smash:
 

spinproof

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General Lee said:
That's true. So, we are moving some domestic 767ERs and some 764s to fly international flights that don't compete with LCCs. 28 planes to be exact. We are cutting 16% domestic and adding 25% international.

Bye Bye--General Lee
...so the plan is to "Deadhead" to South America and fly back full? Since domestic will be cut 16% and International increased 25%, someone will have to supply the domestic feed for the International lift! Yet you feel the "RJ" in its present state is obsolete. Comair has to figure into this,somehow you seem to dismiss them in general. No inteindo muchaco!:pimp:
 
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mynameisjim

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spinproof said:
someone will have to supply the domestic feed for the International lift!
The customers will use the "Multiple Carriers" button on Orbitz.com. Use a LCC to get to the city they need to catch the international flight from.
 

FL000

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All I see in this is reduced RJ purchase/lease costs, making the CASM less, and the aircraft more attractive to other airlines.
 

FlyinScotsman

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FL000 said:
All I see in this is reduced RJ purchase/lease costs, making the CASM less, and the aircraft more attractive to other airlines.

If these RJ's are going to be returned to the lessor, then there will be somebody with dreams of having an airline and will get a sweet deal on them. They will start up a new regional airline with 50 seaters. The CRJ200's will become the new Metro, B1900, Jetstream, a cheap way to get into the airline biz. Which we all know is sooooo much fun.
 

CA1900

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A-ha! So this has been CommutAir's plan all this time! Forget Saabs and Dashes... we were just "holding out" for cheap jets! Yeah, that's it!
 

FlyChicaga

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General Lee said:
Maybe Fred Greed can use the surplus 50 seaters on a shuttle service every 5 minutes from MDW to EWR for Virgin America? Businessmen love frequency........
Man, that would make for such an easy commute. We can only hope.
 

Jimdandy

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The generals MO is always the same he has fun by thriving off others misfortunes it makes his crappy little life seem that much better.

Pathetic but predictable
 

On Your Six

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Jimdandy said:
The generals MO is always the same he has fun by thriving off others misfortunes it makes his crappy little life seem that much better.

Pathetic but predictable
I don't get that impression. Everyone knows the General's viewpoint on RJs - he's not a fan. I think he makes a great point. His point about operating RJs in a high-frequency model just outlines how wrong the original premise was. Clearly it doesn't work from an economic standpoint nowadays or from a comfort standpoint for the most likely high frequency passengers - high-margin business passengers who will do anything to avoid uncomfortable RJs.
 
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The day will soon come when I can have an RJ in my backyard, and I can put a sandbox inside, and build a fort on the back where the engines r. A piece of plywood across the engines, n then put up a frame, and more plywood, and a roof.

I can get my friend from the fire department to bring the Jaws of Life to cut a hole in the roof, so I can go in and out of my fort and use the bathroom.

Then maybe I could get MTV to pimp my RJ
 

General Lee

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Jimdandy said:
The generals MO is always the same he has fun by thriving off others misfortunes it makes his crappy little life seem that much better.

Pathetic but predictable
Come on Jimmy, you are wrong now. I don't thrive on anyone's misfortune, since our company has had more misfortune (1310 furloughs, $ billions in losses, base closures, etc) than most airlines out there. (Maybe not United or USAir) I do post articles that state problems with some airlines, but I usually just post the article. Regardless, I have an opinion and I often show it. At the same time, I know there will be future job losses at various airlines and I try not to make anyone feel any worse than they already feel. This is a crazy time in our profession, and I am fully aware of that. Re-read my comments after posting this article. They were about Fred Reed at Delta and his screw ups. I just posted the article and gave my opinion on my old boss. So, knowing that, you need to grow up. And, I don't have a crappy little life. I enjoy every minute of it. Life is what you make it. I have a life outside aviation and flightinfo believe it or not.

Bye Bye Jimmy-----General Lee
 
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