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If Oil >$100/bbl; RJ Fleet Forecast Jan 2012  
User currently offlineCoronado From United States of America, joined Jun 1999, 1187 posts, RR: 2
Posted (3 years 9 months 6 days 23 hours ago) and read 5388 times:
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In recent months there has been much speculation and discussion regarding regional fleets operating for the major airlines in USA.

Issues being discussed have included: a) High CASMS for regional jets in high fuel environments, b) Scope Issues due to mergers (such as current UA/CO issues about UAX operations of CR7's c) drawdown of hubs that have been predominantly CRJ/ERJ such as CLE, CVG, etc d) Boyd Group predictions of elimination of 2/3 of CRJ/ERJ fleet over next 5 years and suggestions that even CR7 and larger regional a/c are likely to come under pressure in a higher oil environment e) Mesa dropping lease obligations on 100 aircraft during its b/k process from which it emerged earlier this week, etc. d) Comair Fleet Reduction initiative announced by Delta in Sept 2010 which is scheduled to reduce Comairs CRJ100/200 fleet by over 40 a/c by 2012.
Delta's most recent published financial statements (10K Q3 2010) discloses:
On Delta's balance sheet:
CRJ100 39 leased and 21 owned Total 60 aircraft
CRJ200 8 leased
Then further they have DCI (Delta Connection obligations with contract regional carriers) involving 175 CRJ200.
Total CRJ100/200: 243, if my math is correct although several CRJ100's I believe have already been parked and a few others have taken up flying under other brands.
It appears that most of the current DCI contracts expire between now and 2016 but mostly likely do allow cancellations based on a) 6 months advance notice b) payment of certain moneys.

With oil hovering close to $100 and with many financial observers anticipating $120.00 bbl oil by Q2/Q3, I can see Delta slashing their CRJ100/200 fleet by an additional 60-80ac by early 2012, via winter 2011-12 schedule reductions, even if having to pay some contract flying cancellation penalties, bringing the total CR100/200 fleet to no more than 150 ac by Spring of 2012.

This brings up that compared to Delta, other airlines, principally UA/CO and also US when they start analyzing the economics of their 50 pax jet fleets , are vulnerable or will be under pressure to implementing an even faster contraction pace than Delta.

Does anybody have the actual lease maturity dates and contract flying maturity dates of the major US airlines obligations? How about a chart comparing/predicting RJ fleet levels for the US majors by mid 2012?


The Original Coronado: First CV jet flights RG CV 990 July 1965; DL CV 880 July 1965; Spantax CV990 Feb 1973
12 replies: All unread, jump to last
 
User currently onlineFlighty From United States of America, joined Apr 2007, 8656 posts, RR: 3
Reply 1, posted (3 years 9 months 6 days 22 hours ago) and read 5309 times:

This has been predicted many times. Yes, CRJ200 has a high CASM. It also has the highest RASM of any jet aircraft you can use. In many cases, CRJ200 is a downsized solution that becomes stronger when market fundamentals grow weaker. 737s would be retired, while CRJ200 continue to fly.

IMO.


User currently offlinejayspilot From United States of America, joined May 2001, 298 posts, RR: 0
Reply 2, posted (3 years 9 months 6 days 22 hours ago) and read 5200 times:

Not a DCI carrier but ZW's fleet of 70 CRJ200's is under contract with Usairways until 2015.

User currently offlineCoronado From United States of America, joined Jun 1999, 1187 posts, RR: 2
Reply 3, posted (3 years 9 months 6 days 22 hours ago) and read 5159 times:
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Quoting Flighty (Reply 1):
Yes, CRJ200 has a high CASM. It also has the highest RASM of any jet aircraft you can use.

But is not a lot of the RASM premium just a function of the regional jet contract agreements which are in so many cases on a cost plus basis? Meaning even when mainline carriers were reporting large losses when fuel went up in 2008, many of the regional carriers kept on reporting profits because their mainline partner was, under the terms of the lift agreement, having to take on all increases in RJ flying fuel costs? I can see the RASM premium on a MQT-DTW routing, I can't see it on using the same aircraft to run from CVG to DTW.



The Original Coronado: First CV jet flights RG CV 990 July 1965; DL CV 880 July 1965; Spantax CV990 Feb 1973
User currently offlinebrandonfs88 From United States of America, joined Sep 2006, 177 posts, RR: 0
Reply 4, posted (3 years 9 months 6 days 22 hours ago) and read 5123 times:

I bet Delta is going to miss those Saabs if Oil goes over $100/bbl

User currently onlineFlighty From United States of America, joined Apr 2007, 8656 posts, RR: 3
Reply 5, posted (3 years 9 months 6 days 19 hours ago) and read 4823 times:

Quoting Coronado (Reply 3):
But is not a lot of the RASM premium just a function of the regional jet contract agreements which are in so many cases on a cost plus basis?

Nope, a smaller aircraft always has higher RASM. They take the highest fare first. Then the next highest.

RJs do well when 30-40 strong business fliers need to fly. The fuel bill does not matter much. A 737 might just fly with empty seats or additional ock-bottom tourist fares that don't justify the plane.

Looking at real crisis situations, the CRJ allows you to maintain your network at a minimum cost. It is a hunker-down strategy. We can see it today in CLE, CVG etc. In a crisis, you can reduce your fuel bill by retiring mainline jets and keeping CRJ. "Some of both" is the most likely in a $200/bbl crisis situation. Just my 2c. And I hate riding in the CRJ200.


User currently offlineKatwspotter From United States of America, joined Feb 2007, 207 posts, RR: 1
Reply 6, posted (3 years 9 months 6 days 2 hours ago) and read 3768 times:

Quoting brandonfs88 (Reply 4):
I bet Delta is going to miss those Saabs if Oil goes over $100/bbl

Very true! lol



A/C I have worked in ATW - SF340 E145 CRJ2/7/9 DC93/4/5 A319/20 MD83 B738 B752/3 B763/4 A333
User currently offlineBrianDromey From Ireland, joined Dec 2006, 3922 posts, RR: 9
Reply 7, posted (3 years 9 months 6 days 1 hour ago) and read 3725 times:

With the mergers seen in the us industry, careers have a lot more pricing power than they had last time oil prices soared. The economy is also a bit stronger too.


Next flights: MAN-ORK-LHR(EI)-MAN(BD); MAN-LHR(BD)-ORK (EI); DUB-ZRH-LAX (LX) LAX-YYZ (AC) YYZ-YHZ-LHR(AC)-DUB(BD)
User currently offlineB6JFKH81 From United States of America, joined Mar 2006, 2897 posts, RR: 7
Reply 8, posted (3 years 9 months 6 days ago) and read 3295 times:

Quoting brandonfs88 (Reply 4):
if Oil goes over $100/bbl

IF??? It's more like WHEN.  



"If you do not learn from history, you are doomed to repeat it"
User currently offlineJamBrain From United Kingdom, joined Sep 2008, 251 posts, RR: 0
Reply 9, posted (3 years 9 months 6 days ago) and read 3153 times:

Quoting Coronado (Thread starter):
many financial observers anticipating $120.00 bbl oil by Q2/Q3

Don't tell Planemaker :-

[/quote]
5000 X A320 & B737 On Order, 1000 Cancellations? (by Keesje Jan 13 2009 in Civil Aviation)?threadid=4281084&searchid=4287894&s=planemaker#5

Yes oil prices have followed that trend during the last 5 years, but that was during a historic run up. More than a historic run up... it was a once in a lifetime bubble.

Not a chance. (fuel prices will go $100 soon)   
[quote]



Jambrain
User currently offlineTrijetsRMissed From United States of America, joined Oct 2006, 2385 posts, RR: 7
Reply 10, posted (3 years 9 months 5 days 13 hours ago) and read 2604 times:

Quoting Coronado (Thread starter):
I can see Delta slashing their CRJ100/200 fleet by an additional 60-80ac by early 2012,

It's possible. I think it will also depend on what DL decides to do for the D95 replacement. The right replacement could also cover a lot of RJ flying.

Quoting Flighty (Reply 1):
737s would be retired, while CRJ200 continue to fly.

DL is not going to park 738's before the CRJ200...or any other regional jet for that matter.  



There's nothing quite like a trijet.
User currently offlinejfklganyc From United States of America, joined Jan 2004, 3562 posts, RR: 5
Reply 11, posted (3 years 9 months 5 days 5 hours ago) and read 2412 times:

"This has been predicted many times. Yes, CRJ200 has a high CASM. It also has the highest RASM of any jet aircraft you can use. In many cases, CRJ200 is a downsized solution that becomes stronger when market fundamentals grow weaker. 737s would be retired, while CRJ200 continue to fly."

Really? I'm just a pilot, but this is the opposite economic approach I have heard and seen from airlines.

UA parked an old 737 fleet . . . other than that though, airlines showed us that 50 seat CRJs were and are very vulnerable to high fuel prices when they retired them en mass last time around.


The cost per seat to fly the plane is just too high when compared to larger jets.

So I disagree with this line very much so:

"In many cases, CRJ200 is a downsized solution that becomes stronger when market fundamentals grow weaker. 737s would be retired, while CRJ200 continue to fly."


User currently offlineRainmaker From Brazil, joined Jan 2006, 115 posts, RR: 0
Reply 12, posted (3 years 9 months 4 days 18 hours ago) and read 2117 times:

Quoting jfklganyc (Reply 11):
The cost per seat to fly the plane is just too high when compared to larger jets.

So I disagree with this line very much so:

"In many cases, CRJ200 is a downsized solution that becomes stronger when market fundamentals grow weaker. 737s would be retired, while CRJ200 continue to fly."

Well actually as in life, it all depends. Both are right, in different circumstances.

Example 1 - crisis in leisure flying for whaever reason, intact business flow -- > higher fares remain, lower fares can't attract enough fliers, 737 non-economical. RJ is a more viable solution

Example 2 - recession crawls in - less business flying, less leisure flying --> higher fares slashed, lower fares barely attracts enough fliers, 737 non-economical, RJ even less. Solution? less frequencies wherever is possible --> both type of jets get parked in great numbers. Redeployment of newer lower operational cost jets (CASM's) to other routes. Likely RJ's and older 737's more so. Last recession accelerated the parking in of MD's and older 733, 734 etc.

Example 3 - oil spikes up ---> need to higher fares all-around. apart from the referentials, it's the same mechanism as in Example 2.

The point here is: higher cost or lower revenue equals less flying. it's only distributed differently.


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