Regional consolidation is coming

[BeCareful!]

Are you delusional? Who exactly has been saying that? Please show a SINGLE statement which supports your claim.

I can support his claim with two words: Independence Airlines


RJ's started as an experiment with Bombardier and Comair in the early 1990's, which was not exactly a level playing field since Comair had new hires buying their jobs through the academy at the time. In other words, Comair had an economic advantage through PFT, and they were able to do the RJ thing when no one else was.

Then, the Eagle ATR crashed in 1994. USA Today, with its ever accurate and hard hitting reporting informed the traveling public of what it had long suspected: that flying in a propeller-driven aircraft was inherently unsafe, and that jet power was the only way to fly safely.

By 1995 we had Brazilian jets, Canadian jets, re-engined British jets.....every kind of small, un-economical jet you can imagine.......flying short, former turboprop routes and burning tons of fuel at 14,000 feet. Factor in the tremendous fun MANAGEMENT has had toying with LABOR, enticing us with illusions of grandeur, Shiny New Jets, flow throughs, etc., and in true American Capitalistic style: We've never looked back!

RJ's have done a great job of leveling wages in our profession. They've also burned up a gazillion gallons of fuel. Not much else.

Oh, except they've educated millions of passengers with this fact: Small airplanes are LOUD inside, even if they are pushed through the air with jet engines.

 

[~~~^~~~]

For starters.... the title of this thread is all wrong. There will not be consolidation of small jet providers because ALPA doesn't care about alter ego flying on our level. There will be turnover of small jet providers, as each airline ditches its seniority and renews its cost structure by simply operating on another certificate without so much as a squeek from "The Pilots' Union." Reference the fact that DCI is growing with the addition of CHQ and Mesa flying while Comair is shrinking.

Actually, Boyd has been predicting an RJ glut for sometime now.

So have I. Big deal. Back in the days when the Delta boys were convinced that RJ's were taking over the planet, I was telling you that a 737-200 burned the same, if not less, fuel per seat mile than an RJ. That was my arguement against the Delta MEC's apartied scope policy. The uses for RJ's were self limiting and as you can see, Delta now appears to have bought too many 50 seaters under the scope arrangement the Delta pilots voted on.

The 70 seat CRJ is not far behind the 50 seater.

Nope, you are wrong. The 70 seat jets provide 40% more revenue for around 10% higher costs.

One big difference, if it happens, is Delta's 100 seat rates ( $44.01 for a second year First Officer to $88.93 for a 12 year Captain). These are lower than any of the so called "regionals." If the Delta MEC buys back into small jet flying it proves my contentions that:
1) The Delta MEC sold regional flying and it does not currently belong to them
2) Predatory scope usually ends up biting the predator. In this case, the Delta pilots are now bidding against the regional guys in the "race for the bottom."
3) And before you start trumpeting that it is for the airline's survival you might want to consider the DP3 guys who all carried out between $750,000.00 and $2,000,000.00+ after earning well in excess of $250K yearly and who are now angry that their remaining 50% is getting cut from around $7,000 a month. Most of us "regional" guys never have made the $7,000 a month that your pilots are making for sitting around their Estates on retirement at age 54.
Of course the airline they left to the future "Delta" pilots will never pay $7,000 a month either - at least not on the 100 seater.

The turboprops that used to do this flying were good airplanes, but they were completely used up before being sent to the next tier of operators. There is a market for regional feed at cities that cannot support the level of service provided by RJ's. I wish some airline would promote turboprops for what they are - safe, fast, efficient and clean aircraft. The ATR burns 1/3 the gas of the RJ, it also spews 1/3 the pollutant and goes faster when the weather gets bad (money lines in ATL for one example). It is a shame Delta execs still think jets are sexy. This isn't 1963 anymore.

 

[FDJ2]

Are you delusional? Who exactly has been saying that? Please show a SINGLE statement which supports your claim.

fast.http://www.aviationplanning.com/images/sjppredict.JPG

Boyd has been ahead of the herd on the RJ Glut, and the fact that some don't want to hear it is irrelevant.

Here is a sample of some Boyd quotes from the past:

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.

More Shake-Outs To Come For Small Jet Providers. The hard economic fact is that small jet ("RJ") operations are going to face increasing economic pressures, both from higher fuel costs as well as from the continuing squeeze on revenues driven by competing small jet providers vying to sell services to major carriers. (Witness the recent shifts of aircraft by Air Wisconsin, and the Mesa/Delta deal - both left somebody else out in the cold.) Then consider the inevitable continuing efforts on the part of major carriers to pay their SJPs (and all of their other vendors) less for their services, and we have a picture that's a whole lot less rosy than some on Wall Street would have us believe about "regional airlines."

Delta paid a reported $700 million for ASA, and sold it for what will ultimately be just over $400 million.
Do the math. RJs and RJ-providers are not a growth industry.

"The Regional Carriers Are Profitable. They've Got A Better Model." Another statement that's in total conflict with reality. Some folks read about the traffic growth and the profits at "regional airlines" and conclude that these entities have their act together. The fact is that "regional airlines" are neither regional, nor are they airlines. They are merely vendors of lift, and their customers are legacy carriers. If the legacy goes down, the "regional airline" goes with it.
And, no, a carrier like ExpressJet, or Chautauqua, or Pinnacle can't just break away and operate as a stand-alone carrier. Establishing the necessary infrastructure - reservations, ticketing, marketing - would be very expensive. Establishing brand loyalty would be tough. Furthermore, "regional" jets are economic dogs in most stand-alone, non-feed market situations. It's a situation that's getting worse with higher fuel prices and increasingly inept FAA management of the ATC system.

By the way, it's already been tried. It's called Independence Air.
Get Ready. Some Major Airline System Adjustments May Be Coming. Tumble to it: there's a good chance that the price of airplane go-juice could continue to go up on a trajectory roughly akin to a moon launch, regardless of the eventual price of crude.
Here's some of the outcomes that need to be considered:
Regional Jets: Shrunken Mission Applications. In the event of much higher fuel prices - say, over $2 a gallon (on average) the CRJ and ERJ series of airliners will become very large sources or raw materials for Budweiser displays. In that event, look for as much as a third of the current RJ fleet quickly finding retirement in Arizona.

 

[FlyComAirJets]

FDJ2

So RJ pilots are worried about job security (as if they weren't before) and you stoop to pour gas on the fire? Makes you just giddy to cut and paste bad news. At least Gee Lee knows better than to pile on after the whistle.

Way to go.

 

[jehtplane]

Actually, Boyd has been predicting an RJ glut for sometime now. Many on this forum have been in denial with regards to the high costs of RJs, their poor economics and the urban myth that RJs are profitable.

The 70 seat CRJ is not far behind the 50 seater.

So if the 70seat is not far behind does that mean the 100 seat is not far behind that, or is it just because you will get to fly them they will be profitable.

 

[DrProc]

I am pretty sure trashmen earn a respectable living too. The same cannot be said for all of us.

They actually have found that garbage collectors have one of the highest satisfaction levels with their jobs, compared to all other professions.

 

[jetfo]

RJ's are here to stay. They will just get larger, i.e. the E170/190, the CRJ700/900 and the Bombardier C class. The only question is who will be flying them. I'll bet it will be Republic, Mesa, Skywest, etc..

Or, better jet, the likes of JetBlue that are clever enough to keep the short and intermediate flying in house.

The ERJ135/140/145 and the CRJ440/100/200 fleets will be phased out over time. Inefficient scope busters.

 

[dashtrash]

So if the 70seat is not far behind does that mean the 100 seat is not far behind that, or is it just because you will get to fly them they will be profitable.

From what I've read (Not just Boyd). The 70 seater was a break even aircraft when crude was below $40-$50. Now it is close to where the 50 seater was then. When you get into the 90 seat range it's a different ball game. It's a cyclical business and now is the time for us to make the right career moves. All I know is that it's a high risk game that will have more losers than winners in the short run. Baby boomers turn 60 please!

 

[Oakum_Boy]

So we have a glut of RJ's. So what else is new, and who cares. Only a Deltoid with nothing better to do. Mainline pilots must get over themselves. You're not that special. Did you see/hear RJ pilots posting things about furloughs and other 'bad' news on the Majors forum? Nope. Again, who cares, and let the RJ's die if thats the way it's gonna go. You and Boyd have been predicting this and that- and the General Lee and FDJ are so brilliant-and my goodness- were just so impressed. Not.

 

[indianboy7]

Can we be respectful of those who work for a living here? Airplane flying is the same kind of deal today....just press a button and throw a switch and like magic the airplane practically drives itself. We even have airconditioning and radios too. Or is there more to it?

I hope you were kidding, but just in case you weren't..scroll down to the last post......

http://forums.flightinfo.com/showthread.php?t=64018&highlight=Fearneyhough

:beer:

 

[atrdriver]

Are you delusional? Who exactly has been saying that? Please show a SINGLE statement which supports your claim.

Well, the statements are no longer available here as far as I know, but I sure remember the CMR guys saying how profitable they were before DAL bought them, and that they didn't even need DAL to make money. Remember some of those arguements?