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Some Regional Predictions from Michael Boyd and the Boyd Group

General Lee

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Boyd Group International Aviation Predictions - 2011


[FONT=Tahoma,Tahoma][FONT=Tahoma,Tahoma]Over the next 36 months, over 300 50 seat RJs will be retired. [/FONT][/FONT]
[FONT=Tahoma,Tahoma][FONT=Tahoma,Tahoma]If fuel goes over $3 a gallon, all bets are off. [/FONT][/FONT]


[FONT=Tahoma,Tahoma][FONT=Tahoma,Tahoma]Fleet Trends: Renewa[/FONT][/FONT][FONT=Tahoma,Tahoma][FONT=Tahoma,Tahoma]l, Not Expansion [/FONT][/FONT]
[FONT=Tahoma,Tahoma][FONT=Tahoma,Tahoma]Key 2011 Fleet Trends: [/FONT][/FONT]
[FONT=Tahoma,Tahoma][FONT=Tahoma,Tahoma] Increased Pace of Fleet Renewal At Some US Carriers [/FONT]
[FONT=Tahoma,Tahoma] Faster Retirement of 50-Seat RJs [/FONT]
[FONT=Tahoma,Tahoma] CRJ-700/900s will see challenges with higher fuel cost [/FONT]
[FONT=Tahoma,Tahoma] C-Series Pressure On Airbus, Boeing & Embraer [/FONT]

[FONT=Tahoma,Tahoma]Fuel Prices: The Wild Card. And It Will Be Wild [/FONT]
[/FONT]
It’s no longer a question of whether jet fuel will cost more in 2011. It’s just an issue of how much more airlines will be paying, and how they will react in regard to adjusting fleets and flying. The key point to keep in mind is that the current management of the US airline industry has a pulse. They clearly see the coming and near-certain spike in fuel prices.
As witnessed by the fare increase implemented in the last week of December 2010, they are not asleep at the switch. Oil might go over $100 and higher, like in 2008. This time, they will be better prepared. Not immune from damage, but at least we won’t have CEOs in the fetal position under their desks, waiting for the financial grim reaper.

[FONT=Tahoma,Tahoma][FONT=Tahoma,Tahoma]Fuel-Driven Fleet Trends [/FONT][/FONT]
This will lead to several trends that are likely to manifest by the beginning of 3Q 2011:

[FONT=Tahoma,Tahoma][FONT=Tahoma,Tahoma]Acceleration of New Aircraft Deliveries[/FONT][/FONT]. The US airline industry is sitting on some significant cash, which can give it more market horsepower to replace older aircraft faster. Main airline to watch: American, whose fleet plan involves significant flexibility. It can keep or replace MD-80s as new 737-800s are delivered. At this point, it appears that as a new -800 comes on the property, a "Super-80" gets sent to the desert. That will continue.

[FONT=Tahoma,Tahoma][FONT=Tahoma,Tahoma]Litters of Stray Cats: More Market Value Than 50-Seat RJs[/FONT][/FONT]. There have been a number of short-of-real-grey-matter "studies" from some consultants that 50-seat jets are here to stay, or as a variation on the theme, the marketplace will generate a next-generation replacement as older units end up in the desert.

Sure, a next-generation replacement. Like the ones that came along to fill in for the Metro-IIIs, B-1900s, J-31/32s, Brasilias and Saab-340s that have largely disappeared from the US skies. The 50-seat jet is in the same situation. There is no 50-seat replacement. Period.

Boyd Group International Aviation Predictions - 2011

[FONT=Tahoma,Tahoma][FONT=Tahoma,Tahoma]Most of the retired RJ lift will come from flying in large markets. [/FONT][/FONT]
[FONT=Tahoma,Tahoma][FONT=Tahoma,Tahoma]Small communities have other problems that aren’t directly related to RJ retirement. [/FONT]

[/FONT]
It’s not just a matter of higher fuel costs making smaller jets uneconomic. It’s also maintenance costs. As these machines age, the cost of heavy checks start to rise roughly to the level of the German War Debt. One operator has noted that when these airplanes get to around 40,000 hours, the cost puts them on the ground. Take a look at ERJ/CRJ-100/200 deliveries in the early to mid-90s, factor in annual hours of utilization, and the result is a land rush for Arizona desert property for storage.

[FONT=Tahoma,Tahoma][FONT=Tahoma,Tahoma]Outcome: Less RJ Flying. Not Necessarily Less Small City Flying. [/FONT][/FONT]
Today, after the fact, there’s all sorts of hand-wringing and gnashing of teeth in regard to "whatever are we going to do as 50-seaters go to Happy Hacksaw Land… Small communities will be devastated…
More veneer thinking. Small community air service is indeed under pressure, but that’s due to a range of dynamics much wider than retirement of 50-seaters. First, these machines were never designed nor intended for small community service, despite pronouncements by professors in aviation colleges who wouldn’t recognize ATC from an ATM machine. RJs were envisioned as expansion airplanes for the now-gone independent regional airline industry that existed in the late 1980s.
The main hit – as it were – will be reduced flying in capacity fill-in missions, and not necessarily in smaller communities.

As an example, we can use Delta’s CRJ flying reductions at CVG:
Without belaboring the point, the majority of CRJ-200 flying that has been cut out at CVG involved large markets such as BOS, IAH, DSM, and did not entail wholesale loss of service at smaller airports.

This will be the trend in 2011 as the culling of 50-seat fleets accelerates across the US airline industry along with the price of jet fuel. Less flying, but whatever issues small airports will face, they won’t be materially hit by less 50-seaters. In fact, there has been some limited interest on the part of operators such as American Eagle and SkyWest in shifting 50-seaters to sure-revenue EAS flying.

Boyd Group International Aviation Predictions - 2011
[FONT=Tahoma,Tahoma][FONT=Tahoma,Tahoma]Fuel Prices: Will Begin To Affect 70-Seat RJs In 2011 [/FONT][/FONT]
The shift toward use of larger CRJ equipment – which offered more seats with only incrementally more costs than 50-seat versions, not to mention having lower maintenance expense due to a younger age – may well get zapped in the coming year, too. It will depend on just how high jet-A prices go.

Another point to keep in mind: the 70-seat units at American, Delta and at United have been shifted to dual-class configuration. While this has some secondary product-related benefit, it still removes between four and six seats that will result in some reduction in revenue generation as system load factors hit 80% and above. Typically, those first class seats do not directly bring in additional fare revenue. At United and Continental, they are awarded on a first-come basis to high-level frequent flyers.



Just waiting for eP to ask Boyd for SOURCES........Hey eP, go enjoy your eD and vD.

Bye Bye--General Lee
 
Last edited:

Freebrd

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What a loser, you enjoy stiring it up don't ya, Boyd has been saying this crap abour RJs for years and it hasn't happened has it. And you've been saying it too but it hasn't happened now has it. Wait til the 100 seaters come onboard, not at your place but at the Regionals.
 

General Lee

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What a loser, you enjoy stiring it up don't ya, Boyd has been saying this crap abour RJs for years and it hasn't happened has it. And you've been saying it too but it hasn't happened now has it. Wait til the 100 seaters come onboard, not at your place but at the Regionals.

Loser? Calling yourself a loser? Why? First of all, I just posted his predictions. All I stated at the end was that eP has eD and vD. Try to re-read the whole post. I justed posted the Regional predictions from a noted analyst. If you don't believe him, then don't. Don't read it, I don't care.......

And, 50 seaters ARE BEING PARKED. He was right. RA at DL said 50 more will go this year. High oil prices makes them uneconomical. And, Regional airlines are not getting fee for departure anymore (guaranteed profits), rather they are doing more at risk flying, and paying for their own gas. And when will the 100 seaters come to the Regionals? Thanks to recent profits at the Majors, they can't cry poor anymore, and have a lot less leverage. You know it's true. Sorry, YOU ARE THE LOSER. LOOOOSSSERRRRRR.


Bye Bye---General Lee
 

General Lee

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Boyd only has one record-as does Gen...

-They should get a room.

Do you dream about that? I thought so. Sad, really. Not gonna happen, except in your dreams.


Bye Bye--General Lee
 

10nCLR

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Hey Jenny,
Can you post Boyd's predictions from 2009 & 2010, I'm kind of curious of what was said back then. Much appreciated
Thanks Jennilee
 

Jar Jar

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RA at DL said 50 more will go this year. High oil prices makes them uneconomical. And, Regional airlines are not getting fee for departure anymore (guaranteed profits), rather they are doing more at risk flying, and paying for their own gas.

And what of the recent Mesaba / Compass fire sale? I believe both of those are FFD contracts with DL footing the fuel.
 

TCAS

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You know it's true. Sorry, YOU ARE THE LOSER. LOOOOSSSERRRRRR.

Geez... you sound like a six-year old child. I would expect you, as a major airline pilot, to express a bit more maturity then that.
 

xjgearbtch

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I thought this guy was told to grow up by the mods?? What happened now he's back to his childish antics again? This place was almost getting respectable again, guess it's back to the general lee ranting page. Better he just troll this website then the others I guess.
 

Data

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Do you dream about that? I thought so. Sad, really. Not gonna happen, except in your dreams.


Bye Bye--General Lee

So General, how are you going to vote when DAL management offers additional pay for scope relief?
 

BOX OFFICE

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I have to say, that General Lee continuously coming on the regional board and posting articles where he gleefully brags how regional pilots will lose their jobs is sickening. Seek mental help, General. Moderators, please do something about his constant flamebaiting and pot stirring. It serves no purpose. It's not even entertaining.
 

Baronman

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I have to say, that General Lee continuously coming on the regional board and posting articles where he gleefully brags how regional pilots will lose their jobs is sickening. Seek mental help, General. Moderators, please do something about his constant flamebaiting and pot stirring. It serves no purpose. It's not even entertaining.

I think it's funny frankly. Obviously he's very impressed with himself, considering himself a cut above the rest (or at least regional pilots). In reality he probably has a delicate ego....

Hey Lee, I should have some of my friends who work for large banks, hedge funds, accounting firms come on and run you down for your stupid career choice. They're making your pay 5 years and don't have to deal with goof-ball airline management antics. (And I'm not talking one of your ACME Atlanta banks that's on the FDIC watch list).
 

crj567

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I think it's funny frankly. Obviously he's very impressed with himself, considering himself a cut above the rest (or at least regional pilots). In reality he probably has a delicate ego....

Hey Lee, I should have some of my friends who work for large banks, hedge funds, accounting firms come on and run you down for your stupid career choice. They're making your pay 5 years and don't have to deal with goof-ball airline management antics. (And I'm not talking one of your ACME Atlanta banks that's on the FDIC watch list).

I don't berate Gen for his career choice. I mean, where else is some mirco-peckered jackwagon gonna find such a great way to massage his ego and over-compensate for his rather obvious shortcomings?

-He flies a big-ass plane, and that obviously helps him feel more sufficient.
-Whatever floats your boat, Champ!
 

flyboyike

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Seems to me trying to predict anything in this industry is about as futile as trying to herd some of the very feral kittens Mr. Boyd so illustratively mentions in his analysis.
 

General Lee

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I thought this guy was told to grow up by the mods?? What happened now he's back to his childish antics again? This place was almost getting respectable again, guess it's back to the general lee ranting page. Better he just troll this website then the others I guess.

I stay within the rules. I posted predictions made by an airline analyst, and then I get slammed for doing so. Why don't you read Frebird's original post and then think about what you just typed. Have a great day.

Bye Bye--General Lee
 

General Lee

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So General, how are you going to vote when DAL management offers additional pay for scope relief?

That has already happened supposedly. The story I heard was they approached Dalpa with an offer, and it was rejected, and at that point they sold Compass and Mesaba. But if it were up to me, I would vote a big NO for any scope relief. I actually think Dalpa is watching the CAL/UAL deal, and may go after some of the current 76 seaters. The sale of Compass and Mesaba was management's decision, not ours. The pay raise will come anyway thanks to recent profits. Southwest's 737 pay will become the baseline for our 737 payrates, and anything larger will pay more. Delta knows this, and AT pilots getting that pay too will help with that. They just can't cry "we can't pay you that much, look at Airtran, they only make this much......." Well, yes, yes they will NOW.


Bye Bye---General Lee
 

General Lee

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I have to say, that General Lee continuously coming on the regional board and posting articles where he gleefully brags how regional pilots will lose their jobs is sickening. Seek mental help, General. Moderators, please do something about his constant flamebaiting and pot stirring. It serves no purpose. It's not even entertaining.

Sickening? How about just posting information? I posted what a noted analyst stated about his own predictions of 2011. You can believe them or not. I didn't highlight any points, rather I just posted the whole regional section of the predictions.

Bye Bye---General Lee
 
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