What will be ACA's new LCC narrowbody?

[g159av8tor]

In your humble opinions, what will be the narrowbody airframe ACA chooses to launch its LCC?

Tailwinds...

 

[Tooslow]

Richard Branson and Kerry Skeen know! They both were seen in a 737-800 at the same time!

 

[acaTerry]

Might be worth looking into the EMB170. I saw on at DVT today and it has that "big airplane" look, but the RJ operating cost. It looks far more like an airbus than a regional jet.

 

[Carl_Everett]

Ah yes, the RJ operating cost, which is higher per hour as compared to the B-737. Nearly twice as much.

I think you mean CASM is twice as much. I don't think the operating cost is. Do you really think it costs an RJ twice as much to operate per hour over a 737?

 

[mckpickle]

EMB 190. Christ you just can't compete with third world labor.

 

[DoinTime]

I think you mean CASM is twice as much. I don't think the operating cost is. Do you really think it costs an RJ twice as much to operate per hour over a 737?

no....but the RJ only has a fraction of the revenue potential. CASM is really the only important cost when operating in your choice of markets.

 

[Skank]

Brazil is not quite a 3rd world country. Most people who use the term are not sure what it means. Brazil is very industrialized, and has invested in a lot of high tech industries at home rather than importing it from outside. And their educational system is probably better than ours. Even Cuba has a much higher literacy rate than the U.S.

 

[skiddriver]

no....but the RJ only has a fraction of the revenue potential. CASM is really the only important cost when operating in your choice of markets.

Actually, balancing CASM against load is how you determine an aircraft/market strategy. Otherwise, we'd be flying 777's on that GRR-CVG run.

You can't make money with a 737 on a run that averages less than 50 folks. That's why you slap an RJ on that puppy.

 

[Carl_Everett]

no....but the RJ only has a fraction of the revenue potential. CASM is really the only important cost when operating in your choice of markets.

This is true, however, listening to the ACA earnings webcast yesterday revealed the strategy. When you are doing short haul flights(350NM), CASM importance erodes and departure costs determine the market. I believe the example they keep using is IAD-SAV. That market may be too small to operate 3 737 flights a day, while 6-8 RJ trips a day could be. I don't have the numbers right now, but I believe he said the departue costs for a 350nm flight would be $2800 for the RJ. I do not remember the departure cost for the 737 on that type of flight, but it was higher. I think the magic number for the RJ is around 28 pax. (But don't quote me on that) If you use $100 fare one way(28 pax *$100 =$2800) then ... 28 pax * 8 flights = 224 passengers a day to break even. That is only 1 1/2 737 departures a day, not enough frequency to be a viable option.

Before you say I'm drinking the kool-aide, I am just giving you the recap of what Kerry Skeen said. This model did work for ACA before fee-per-departure started. I remember ACA running Metro-Jet out of IAD a few years ago. Of course, that was with the help of the United brand/reservations/frequent flier miles, etc. That is where I believe ACA feels the risk comes from in this endeavor. IF ACA gets a good brand AND can get a possible code-share with an airline with good perks where people can fly on ACA and use the miles or points or whatever on the code-share airline, it could work. We shall see!

 

[mckpickle]

Brazil is not quite a 3rd world country. Most people who use the term are not sure what it means. Brazil is very industrialized, and has invested in a lot of high tech industries at home rather than importing it from outside. And their educational system is probably better than ours. Even Cuba has a much higher literacy rate than the U.S.

You havent been there have you? I think africa is about the only place more 3rd world