Whats with all of the sudden trouble?

[buxflyr]

While that sounds at first glance like it would be a good solution, I strongly suggest you read the book Hard Landings, which details the rise of the airline industry along with the rise (and fall) of government regulation. The era of big regulation was riddled with some of the most egregious corruption and ineptitude you could imagine. The industry as a result was a fraction of the size it is today, which meant that only the very wealthy could afford to fly (so it was bad for the country), and most people who dreamed of becoming pilots would never get the opportunity (which meant it was bad for your career prospects). Sure a few lucky guys got to play like royalty, but trust me, you wouldn't want to play those odds today.

Actually, the solution is to remove the chapter 11 bankruptcy process altogether. Don't allow the subpar managements of the industry to breed. Only the best-run companies (like Southwest) would survive, and you would actually want to work for them, and there would be more positions available there. So LESS regulation, not more fixes this.

Well said.

 

[pilotyip]

That has nothing to do with the possible bankruptcies on the horizon. I am well aware of why Warren Buffett has advised to never invest in the airlines. I am also well aware of the subpar management that is at many airlines. Thing is.. are you aware that the only way to fix this is with regulation?

Life was good for a few pilots under regulation. There are probably 4-5 times as many pilot’s jobs now as there was in 1977. Back in reg time it was about 90% military that went to the majors. Dereg opened up a lot of airline job to non-military pilots. To return to regulation would raise ticket prices, reduce the number of passengers, and therefore reduce the number of pilots needed. Re-reg would be very good for senior guys not so good for everyone else.

BTW if there is subpar management and someone here has all the answers, why are they not stepping up to fix it.

 

[IBNAV8R]

Skywest has a cost-per-seat-mile of about 9.1 cents
Delta is only 7.8

That is excluding fuel, which makes regional flights even more expensive per seat mile

Regional airlines have lost most of their usefulness now.

Assuming, of course, that demand in a given market matches capacity.

According to your numbers:

Skywest cost is $4.55 per mile regardless of load

Delta cost is $9.36 per mile regardless of load

A full 50-seater has a much better yield than a 1/3 full mainline aircraft.

 

[fam62c]

Fuel costs have remained higher longer than anybody ever thought they would and that's driving a change in the industry. This industry and many of the planes in it were never designed for sustained $60+ oil let alone sustained $90+. It just doesn't make economic sense for multiple airlines (or any airlines in some cases) to serve some of the markets that require smaller planes anymore. It's also becoming more efficient to have less frequency using larger planes in some markets and pull out the additional small plane capacity.

Sustained high fuel costs have finally forced airlines to do what they should have been doing all along.......focus on adjusting capacity to maintain profitability instead of fighting over market share at the expense of profit. There is a place for smaller aircraft but it's not going head-to-head against a 737 or Airbus in markets that can support the larger equipment. There are too many planes and too much capacity which means the least efficient, least versatile planes are going to have to go away and right now that is 50 seat jets and really old gas guzzling mainline planes.

 

[johnpeace]

A full 50-seater has a much better yield than a 1/3 full mainline aircraft.

I haven't seen a 1/3 full mainline aircraft since the 80s...

 

[altimaklr]

Assuming, of course, that demand in a given market matches capacity.

According to your numbers:

Skywest cost is $4.55 per mile regardless of load

Delta cost is $9.36 per mile regardless of load

A full 50-seater has a much better yield than a 1/3 full mainline aircraft.

True, but the break-even load factor on a mainline flight is significantly lower than a regional flight.

 

[Flybywire44]

Regional jets have become unprofitable due to fuel, and at the same time the cost savings on crew and overhead versus mainline has become much more narrow... Thanks to higher wages and work rules at the regionals and lower pay at the majors. Basically we are no longer needed.

Next stop 100 seat scope. Majors will always try to keep the seniority/longevity reset.

Edit: I hope all majors recognize this threat in the coming round of contract negotiations. Delta is rumored to offer an avg 30% pay increase with 100 seat scope.

 

[lookin4better]

Skywest has a cost-per-seat-mile of about 9.1 cents
Delta is only 7.8

That is excluding fuel, which makes regional flights even more expensive per seat mile

Regional airlines have lost most of their usefulness now.

Long as people realize it is/was just outsourced contract work, there should be no surprises.

 

[Sherpa]

No scope relief, things have been stagnant enough for too long. I hope there is more flying reeled in by places people want to spend their careers.

 

[rickair7777]

Skywest has a cost-per-seat-mile of about 9.1 cents
Delta is only 7.8

That is excluding fuel, which makes regional flights even more expensive per seat mile

Regional airlines have lost most of their usefulness now.

That's lying with statistics. Delta's average CSM only applies if you are going to fly widebodies into Fargo.

You would have to compare the CSM of providing narrow-body service to the smaller markets which the regionals serve...not as good of a number once you pull-out the CSM contribution from longe-range widebody ops.

To serve small/medium markets with mainline you could replace multiple RJ's with one daily (or every other day) narrow-body...but you would lose customers who need frequency for their own convenience, including pretty much all business and premium customers.

Or you could just stop the service altogether. But eventually someone would fill the hole, either via market forces or re-regulation if enough folks lost air service.

 

[JetMonkey]

What good is a payraise if you don't have a job?

 

[IBNAV8R]

True, but the break-even load factor on a mainline flight is significantly lower than a regional flight.

Doesn't mean squat unless you meet and exceed that load factor.

Suppose the BE load factor is 70% on an RJ. According to your numbers, a generic mainline aircraft would be about 65%.

1. It is likely the type of actual aircraft sent into a small market would have a much higher relative CASM when compared to the RJ - still lower.

2. If the market is historically 45 people that need to go from A to B at a given time, it'd be colossally stupid to send in the wrong airplane.

I haven't seen a 1/3 full mainline aircraft since the 80s...

That's because they use the right-sized aircraft - which is my point.

 

[FR8mastr]

You guys have it all wrong...

With the upcoming pilot shortage, the airlines are being proactive by making sure there are plenty of pilots available when the shortage hits.

It's management 101

If you need more pilots, furlough some existing ones, then there will be more to hire. Problem solved!

I think some large bonuses are in order.

 

[$$$4nothin]

Skywest has a cost-per-seat-mile of about 9.1 cents
Delta is only 7.8

That is excluding fuel, which makes regional flights even more expensive per seat mile

Regional airlines have lost most of their usefulness now.

This is true. However when you are only booking 30-50 seats out of the small town destinations you still need a smaller aircraft. Regional carriers will always serve a purpose.

 

[Redtailer]

This is true. However when you are only booking 30-50 seats out of the small town destinations you still need a smaller aircraft. Regional carriers will always serve a purpose.

You guys are taking a very simplistic way of looking at things. It's not as simple as saying X market will only support Y load factor.

First off on a CASM basis, mainline aircraft will always beat the snot out of RJs. It's just a function of the seats available versus how much the plane costs to operate. As the aircraft gets smaller CASM goes up exponentially. With a lower CASM comes a lower ticket price. Lower ticket price means market stimulation which increases the load factor. The dynamics for each market is different. So while an RJ may fly a market at 70% load factor it's possible for a mainline aircraft to do the same thing with the same load factor and do it with a higher margin.

While there are a few select markets where the RJs make sense due to no market stimulation by and large they do it at an operating loss to the mainline carrier. Hence, 50 seaters are toast. 90 seaters barely make sense in some markets.

In summary, the regionals have no options except to shrink. How much and by how many is debatable, but it will happen.

 

[Speedtape]

Barrel costs are inching back up.

 

[aircombat]

Barrel costs are inching back up.

How about you let management worry about that.