Regional Jet Decline?

WSurf

Senior
Dec 12, 2002
365
0
RJ revolution ''drawing to a close,'' says analyst
Dateline: Thursday April 24, 2003

The ability of US Major airlines to achieve significantly lower labor costs spells bad news for the fast-growing Regional airline segment of the market as well as the future for 35/50-seat regional jets, says JP Morgan equity analyst Jamie Baker.

In an extensive report published yesterday, Baker said, We believe the RJ revolution is drawing to a close. He noted that mainline labor unit costs rose 37% from 1994 versus just 8% at the Regionals. This, in his view, was the primary driver for the rapid growth of the Regional sector. In effect, Major airlines outsourced routes that no longer could be flown profitably given higher labor costs and declining revenue. Now, with mainline labor expenses expected to fall by 20%-30% over the next two years and with Regional pay unlikely to match, the marginal appeal of continued Regional growth is quickly diminishing. As such, we expect to see significant cancellation or deferrals of RJs on order. He said the RJ backlog numbers some 500.Furthermore, Regional airlines that operate under fee-per-departure arrangements already are under pressure to reduce the fees they charge to their financially beleaguered codeshare partners.

Although a relaxation of scope clauses could permit additional 70/90-seat RJs to enter the Regional airline fleet in codeshare, it also is possible that these aircraft will be flown by mainline pilots. American is a case in point: Its concessionary pilot contract transfers 70-seaters currently in operation plus all future deliveries from Eagle to the mainline, Baker wrote.--PF
 

passed_over

Member
Mar 12, 2003
72
0
It won''t be long before U realizes that the Dash8-Q400 is a better solution for the hub and spoke structure.

Addition of the 17 Bombardier Q400 aircraft will increase FlyBE.''s Q400 fleet to 21 aircraft. The airline also operates 15 BAe 146 jets.

"The Bombardier Q400 delivers fantastically low operating costs, which is critical to our regional low fares business model. The Q400 is set to become the workhorse of the regional low fares market and we are very pleased to be the leading exponent of the product," said Jim French, managing director of FlyBE. "We announced last year our intention to streamline our fleet to two aircraft types. With the announcement today to standardize on the Bombardier Q400, we will drive millions of dollars in operating cost savings, and help consolidate our position as Europe''s No. 1 regional low fares provider."

Mr. French added, "The jet performance of the Bombardier Q400 is a major selling point, together with its exceptionally quiet cabin comfort. Passenger reaction has been extremely positive
 
OP
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WSurf

Senior
Dec 12, 2002
365
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I agree, the Q400 would be great. Any stage length thats 500 miles or less can be done at the same time as a jet. Can haul 78 pax and if its anything like the other Dash''s it would be a great workhouse. However it has those to props out there, and American folks just DON''T LIKE PROPS ON PLANES (there for boats).
 

exagony

Advanced
Nov 2, 2002
147
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www.usaviation.com
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On 4/24/2003 7:06:52 AM pitguy wrote:


Ya know the weird thing in all of this is the one airline making money is Southwest and guess what.  They ain''t got none of them there RJ''s.  Duh!!!


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AirTran is making money too and they do have RJ''s.
 

pitguy

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Aug 21, 2002
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www.usaviation.com
Ya know the weird thing in all of this is the one airline making money is Southwest and guess what. They ain't got none of them there RJ's. Duh!!!
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mga707

Veteran
Aug 19, 2002
1,330
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On 4/24/2003 7:46:22 AM WSurf wrote:

I agree, the Q400 would be great. Any stage length thats 500 miles or less can be done at the same time as a jet. Can haul 78 pax and if its anything like the other Dash''s it would be a great workhouse. However it has those to props out there, and American folks just DON''T LIKE PROPS ON PLANES (there for boats).


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Easy solution--simply call them "JET POWERED Dashers" and most of the public won''t even notice the props.
Worked back in the ''60s with Electras and F-27s, and the public certainly isn''t any smarter, aviation-wise, than it was then...
 

CLIPPEDWINGS

Member
Apr 19, 2003
60
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Wsurf,
It seems that once again US is a day late and a dollar short. We try to be fashionable with the "in thing" when it is on it''s way out. It is sort of like acid-washed jeans...some people still don''t realize they are out.

Did anyone notice too that US never finishes anything? They are like a child with a new toy. MetroJet...didn''t finish up on it. Hey, let''s paint the planes...never finished up on it. Let''s get the "newest" toy..the AirBus..didn''t finish up on it. Now we are on to the RJ''s which will not be finished since we started to late.

Business Select?......Where did that go?
 

LGA777

Senior
Jan 21, 2003
495
2
From what I understand the Dash 8 Q400 has had plenty more of its share of "teahing" problems than most new aircraft. I have read about numerous significant problems at SAS, Horizion, and especially at Star Alliance Austrian carrier Tyrolen, who actually had several aircraft sent back to the factory for modifications.
 

CLIPPEDWINGS

Member
Apr 19, 2003
60
0
Lavman,
I have to disagree..they did not finish painting the planes! As of last summer I flew a plane that still had the old US Air logo and the silver body. They started painting those back in let''s say 96? (not really sure) Anyway, many years later pre 9/11 they still were not finished.
 

cat 111

Advanced
Aug 25, 2002
230
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Don''t forget Wolfie put the paint jobs on hold for awhile.His $6o/per share merger backfired on him.Oh well,the united colors almost matched.
 

MarkMyWords

Veteran
Aug 20, 2002
1,900
1
Last airplane in the old blue and silver either just went into paint, or just came out.....can''t remember which. If we are not 100 complete on painted airplanes, we have 278 out of 279 done.