First a little history. Does anyone remember when Bombardier introduced the Canadair Regional Jet around 15 years ago? It was supposed to offer high speed jet service to cities that only had noisy, uncomfortable turboprop service, and more frequent service to medium size markets who only had a few flights a day on the mainline carriers. Sounds great, huh? It certainly did, as I fly frequently to smaller cities, and even a crowded, not so comfortable regional jet beat a loud, very cramped and often uncomfortable ride in a flying torpedo tube with a cruise speed of 220 mph.
Well this business model lasted for about 5 years before the major airlines caught on that they could substitute these planes on trunk line routes with more frequent flights and drastically reduced costs. You see, these planes historically have been very cheap to operate. The flight crew makes a fraction of what the mainline carriers pay. They turned a profit at about 50% capacity, and for a flight under 90 minutes, passengers were not likely to complain too loudly. So, over the next 10 years, the legacy carriers started shutting down the routes that the RJ's were supposed to enhance and diverted the planes to larger markets. The main manufacturers of the RJ's, Bombardier and Embraer, designed and marketed larger aircraft that will still allow the mainline carriers contract out the actual operations to outfits like Comair, Mesaba, and Pinnacle airlines under the banner of names like Delta Connection, USAirways Express, and American Eagle. Now apparently, the 50 seat planes are out of vogue with the legacy airlines.
Delta Airlines has decided that the old 50 seat planes are just not economical to operate anymore and will start phasing them out next year. Their Comair subsidiary will lose 50% of their planes, and I'm assuming a similar amount of jobs. The cities that were supposed to get improved service from the RJ's mostly lost service over the years, and in some cases have also lost any trunk line service that they previously had.
I can't say I will mourn the loss of the joy of flying on a cramped RJ on a long flight to LaGuardia, but I miss being able to connect via CVG to my old home town in northeastern Pennsylvania.
Hi Keith - this is Ken (Drivetime) The company I work for has developed and sold many products to the RJs as well as the Beoings, etc. The bottom has certainly dropped out of our sales forecast for this particu;ar group and led to reductions in force. From what you're suggesting I guess we shouldn't be holding our breath for a market turnaround in this segment.
ReplyDeleteKen, what I see in my crystal ball is that the production of 50 seat RJ is finished. However the 70-90 seat planes will continue to be sold, but not at the same rate the earlier RJ's were produced. The airlines simply do not have the money to invest in a lot of new equipment in this economy.
ReplyDeleteMy crystal ball also predicts that the regional carriers will return to the larger turboprops, like the Bombardier Q300 and Q400.
We'll see if my crystal ball was soaked in too much scotch shortly. LOL