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
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