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Why Has The RJ Market Faltered?  
User currently offlineRussianJet From Belgium, joined Jul 2007, 7687 posts, RR: 21
Posted (1 year 7 months 1 week 3 days 21 hours ago) and read 6803 times:
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Please don't flame, but I fully admit this is based largely on my perception rather than solid research, but bear with me.

It seems to me that there is less and less interest in anything much under 150 seats. Now, I understand that in many situations the economics just make more sense for a bigger airframe, but surely there are enough 'necessary' smaller, thinner routes around the world to keep the smaller pax jet market buoyant?

Embraer I hear in another thread are not selling as many smaller planes as they used to, the Superjet doesn't seem to be going big guns, and I don't hear an awful lot about the Mitsubishi project. Smaller than that, it is my impression that props like the Q400 and ATR-72 are doing ok, but there doesn't seem to be much interest in smaller jets any more, such as the CRJ series and similar. What are the principle reasons for that?

Are my thoughts broadly correct? If not, what are the primary developments I am missing? Are aircraft like the ERJ145 a thing of the past?

Surely there is some demand in many larger countries for smaller city pairings that are quite far apart, maybe outside the comfortable range for the props I referred to, and for which a fair number of pax would pay a premium?

Sorry if it all sounds a bit naive, but I am no expert in these matters, but am interested to know why this once seemingly large sector or aviation seems to be in decline, contributing to more boring skies full of A319/A320 and B737.

As ever, grateful for thoughts.


✈ Every strike of the hammer is a blow against the enemy. ✈
44 replies: All unread, showing first 25:
 
User currently offlinePHX787 From Japan, joined Mar 2012, 7127 posts, RR: 17
Reply 1, posted (1 year 7 months 1 week 3 days 21 hours ago) and read 6785 times:

A perfect question, don't worry about flamers  

Here's my take-

1) Pax hate them. The CRJ- 50 seater is uncomfortable as hell and nobody likes flying them. I see people all the time trying their damndest to avoid flying the CRJ-200 on their legs.

2) Fuel Efficiency is unheard of on the 50-seaters. The fuel-burn per seat per person is really horrible. Economics are poor.

3) The mx costs are skyrocketing these days



One of the FB admins for PHX Spotters. "Zach the Expat!"
User currently offlineAA737-823 From United States of America, joined Mar 2000, 5722 posts, RR: 11
Reply 2, posted (1 year 7 months 1 week 3 days 20 hours ago) and read 6780 times:

Cost, cost, cost, cost, COST.
The costs of flying a 50-seat object through the air at 550 MPH are too high, unless you can find a way to fuel it off the passengers' farts.

The Mitsubishi is years delayed, much as the 787 and 380 were.
The Sukhoi is, evidently, a wretched piece of machinery.
The products coming out of China aren't being taken seriously by the market.

Smaller, thinner routes in the developed world are being pushed out of the market by higher prices; as the carriers in the USA raise fares to secondary and tertiary cities, people just choose to drive further to a hub.

As far as props, the reliability issues of the Q400 have driven everyone away, apparently, though Bombardier swears they're looking into it.... still.
The ATR seems to be doing pretty well.

The sweet spot for airliners is clearly in the 737/A320 size class. And even that class has been growing; while the 737-300 was immensely popular, the comparable -700 isn't, while creep up to the -800 and -9ER is quite evident. Similarly, the 319 has done pretty well, but we're starting to see upward trends toward 320's and 321's. What was previously considered a handicap to the A321 (namely, that it wasn't as capable as a 757) is now considered a blessing.


User currently offlineXFSUgimpLB41X From United States of America, joined Aug 2000, 4189 posts, RR: 37
Reply 3, posted (1 year 7 months 1 week 3 days 20 hours ago) and read 6754 times:

The airlines extracted all the cuts they could get out of mainline pilots via the RJs... now the level of inefficiency of the airplanes and outsourced product is coming back to bite.


Chicks dig winglets.
User currently offlineRussianJet From Belgium, joined Jul 2007, 7687 posts, RR: 21
Reply 4, posted (1 year 7 months 1 week 3 days 20 hours ago) and read 6746 times:
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How about in countries such as Russia and China? People don't always have the option of driving to the nearest hub, and costs aren't necessarily such a big deal in some respects? Also, routes may be subsidised. Also, in all markets, surely some of the expense is offset when connections are taken?


✈ Every strike of the hammer is a blow against the enemy. ✈
User currently offlineLHCVG From United States of America, joined May 2009, 1535 posts, RR: 1
Reply 5, posted (1 year 7 months 1 week 3 days 20 hours ago) and read 6695 times:

Quoting PHX787 (Reply 1):
1) Pax hate them. The CRJ- 50 seater is uncomfortable as hell and nobody likes flying them. I see people all the time trying their damndest to avoid flying the CRJ-200 on their legs.

That's a bit overstated - and that's not to flame but to emphasize the latter two points you make here. It's far and away the simple economics of 50-seat flying (which includes both mx and CASM), and passenger preference is a DISTANT factor. Even in those cases where a carrier deploys large, 2-class RJs against someone else' CRJs on a route specifically to compete with a superior product, it's to garner increased revenue and higher-yielding pax more so than alleviating customer complaints about CRJs. Again, I'm not criticizing you in this case, but the pax hate for CRJs is a much weaker argument, because airlines would still fly them in droves if there were money to be made.


User currently offlineFabo From Slovakia, joined Aug 2005, 1219 posts, RR: 1
Reply 6, posted (1 year 7 months 1 week 3 days 20 hours ago) and read 6658 times:

IMHO, RJs were, more or less, just a marketing gimmick. Airlines traded turboprop efficiency for the jet appeal. Pax often consider props "old technology".
To many pax, a 732 seems more attractive than newest 72-600, because it is a jet. Then at the time turboprops tended to be quite uncomfortable regarding noise and vibrations.

However, with rising fuel costs, this came to bite the airlines, and with DHC-8Q400 even speed advantage is negligent. Plus newer prop airliners are quieter and even more fuel economical.



The light at the end of tunnel turn out to be a lighted sing saying NO EXIT
User currently offlineADent From United States of America, joined Dec 2006, 1357 posts, RR: 2
Reply 7, posted (1 year 7 months 1 week 3 days 20 hours ago) and read 6627 times:

With $3+ per gallon of gas the 50 seaters are not very efficient anymore.

The 70 seaters are maxed out due to scope clauses at a couple of airlines.

AA isn't buying anything, and neither is sCO while scope clauses are being worked out.


User currently offlineFlighty From United States of America, joined Apr 2007, 8373 posts, RR: 3
Reply 8, posted (1 year 7 months 1 week 3 days 20 hours ago) and read 6629 times:

Quoting AA737-823 (Reply 2):
Cost, cost, cost, cost, COST.
The costs of flying a 50-seat object through the air at 550 MPH are too high, unless you can find a way to fuel it off the passengers' farts.

Cost, precisely. The 50 seater is the cheapest way to transport 50 people and their bags. Cheapest, cheapest, cheapest. So, it does have some role in the world (not a huge role). But it is the best and cheapest at doing one particular job -- a job that happens 1,000s of times per day.


User currently onlinelightsaber From United States of America, joined Jan 2005, 12784 posts, RR: 100
Reply 9, posted (1 year 7 months 1 week 3 days 20 hours ago) and read 6600 times:
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There were too many RJs bought when the per hour labor cost difference between outsourced product and in house product was too high.

As already noted, fuel. RJs were great at $35/bbl oil. With oil oscillating at $70/bbl to $140/bbl, there isn't much relief.

There have also been a number of mergers which have allowed consolidation of hubs on larger gauge aircraft. That has reduced the number of cities that will pay $1,400 fares. People have discovered its cheaper to drive 2 hours to a more competitive airport.

There is a market for RJs, just not in the quantity out there. As Fabo alludes, turboprops are much more competitive than the product offered in the early 1990s.

Quoting XFSUgimpLB41X (Reply 3):
The airlines extracted all the cuts they could get out of mainline pilots via the RJs... now the level of inefficiency of the airplanes and outsourced product is coming back to bite.

Some. Some is the collapse of the relative costs and cuts in RASM from secondary airports.

I predict the MRJ should do well. But that is a larger RJ. It is all about reducing the CASM to stay competitive.

Lightsaber



Societies that achieve a critical mass of ideas achieve self sustaining growth; others stagnate.
User currently offlineFreshSide3 From United States of America, joined Nov 2012, 213 posts, RR: 0
Reply 10, posted (1 year 7 months 1 week 3 days 20 hours ago) and read 6582 times:

Quoting RussianJet (Reply 4):
How about in countries such as Russia and China? People don't always have the option of driving to the nearest hub, and costs aren't necessarily such a big deal in some respects? Also, routes may be subsidised. Also, in all markets, surely some of the expense is offset when connections are taken?

I fly to Ukraine frequently, and need to get a city called Mariupol. It's a bit over 400,000 population. They have an airport(MPW), but currently has no service, international OR domestic. Next closest useful airport is Donetsk(DOK). So, typically I take SEA-ORD-MUC, and then take a RJ on LH for a three hour flight, and then about 1:40 by ground to get to MPW. Why?

I could go SEA-FRA-KBP, go to downtown Kiev, and then take ground transportation straight to the city of Mariupol. Problem is, the bus from Kiev is about 8 hours, and the train is close to 13. Done both before.

Needless to say, the three hours on the RJ isn't so bad after all, compared to the alternatives. My guess, for some cities in Russia, there are similar types of cities with similar situations.


User currently offlinePHX787 From Japan, joined Mar 2012, 7127 posts, RR: 17
Reply 11, posted (1 year 7 months 1 week 3 days 17 hours ago) and read 6403 times:

Quoting LHCVG (Reply 5):
Again, I'm not criticizing you in this case, but the pax hate for CRJs is a much weaker argument, because airlines would still fly them in droves if there were money to be made.

I understand your argument, and maybe for organizing purposes I should've put that one at the end. I never really intended on organizing them in order of importance, because I think everyone agrees it is one thing that is bringing the RJ down:

Quoting AA737-823 (Reply 2):
Cost, cost, cost, cost, COST.
Quoting Flighty (Reply 8):
Cost, precisely.
Quoting XFSUgimpLB41X (Reply 3):
level of inefficiency
Quoting ADent (Reply 7):
With $3+ per gallon of gas the 50 seaters are not very efficient anymore.



One of the FB admins for PHX Spotters. "Zach the Expat!"
User currently offlineCRJ900 From Norway, joined Jun 2004, 2171 posts, RR: 1
Reply 12, posted (1 year 7 months 1 week 3 days 13 hours ago) and read 6225 times:
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What about 88-seat CRJ900 and E175s? If they have roughly the same operating costs as the 50-seater jets but an additional 38 seats to spread those costs over, doesn't that make them fairly efficient?

FlyBE has ordered a lot of 88-seat E175s - I doubt they would have done that if they were grossly inefficient...?



Come, fly the prevailing winds with me
User currently offlineLHCVG From United States of America, joined May 2009, 1535 posts, RR: 1
Reply 13, posted (1 year 7 months 1 week 3 days 12 hours ago) and read 6155 times:

Quoting CRJ900 (Reply 12):

Larger RJs tend to be much more efficient, not to mention their much greater capabilities make them useful on a much larger portion of the route map. There was a comparison of operating costs a while back that showed CR7/9 leases being not much more than what a CRJ goes for, but they carry 50% more pax much further and include F cabins to bring additional revenue. They still cost a little more, but the difference was small enough that the cost per pax was significantly lower. Plus, the relative efficiency starts to increase dramatically when you get up into that 88+ seat range, where if you can't fill a mainline 319/735/73G, you can do the same job (up to mid-con or better range, 9-12 F pax) with a much lighter plane that has much lower operating and crew costs.

Another aspect is the break-even load factor, which others can comment specifically on, but that tends to scale more or less in line with size. A CRJ break-even l/f is extremely high, whereas widebodies can be down around 50%.

[Edited 2012-12-05 04:20:53]

User currently offlinesweair From Sweden, joined Nov 2011, 1811 posts, RR: 0
Reply 14, posted (1 year 7 months 1 week 3 days 12 hours ago) and read 6127 times:

The battle heats up in the 737-700/A319 market going forward. A and B are selling very few of these in the future. CS100/300, superjet among others are coming to cover that niche. What will A+B do, will they give up on this segment or will they fight back? But this is hardly regional space?

User currently offlineLHCVG From United States of America, joined May 2009, 1535 posts, RR: 1
Reply 15, posted (1 year 7 months 1 week 3 days 11 hours ago) and read 6088 times:

Quoting sweair (Reply 14):
The battle heats up in the 737-700/A319 market going forward. A and B are selling very few of these in the future. CS100/300, superjet among others are coming to cover that niche. What will A+B do, will they give up on this segment or will they fight back? But this is hardly regional space?

From the looks of things, they've all but ceded the sub-150 (and certainly sub-130) seat ranges going forward. For instance, the 737MAX has been re-centered around 150+ seats, in order to make more headroom for top-end range and capacity at the expense of viability as a 120-seat variant. The regional makers are now moving upmarket into that 110-130 seat range to fill the void.

[Edited 2012-12-05 04:44:11]

User currently offlineRussianJet From Belgium, joined Jul 2007, 7687 posts, RR: 21
Reply 16, posted (1 year 7 months 1 week 3 days 10 hours ago) and read 5965 times:
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Quoting PHX787 (Reply 11):

I understand your argument, and maybe for organizing purposes I should've put that one at the end. I never really intended on organizing them in order of importance, because I think everyone agrees it is one thing that is bringing the RJ down:

Surely the question of whether passengers choose or like to fly on certain types *if* there is any conceivable alternative is a valid part of the cost equation?

Quoting sweair (Reply 14):
What will A+B do, will they give up on this segment or will they fight back? But this is hardly regional space?

I think it has long been established in other discussions that A+B are quite content to stay out of that bloodbath of a sector, given that they have their hands full with other, much more profitable projects. Having said that, are there any concepts from them out there for sub-150-seat frames?



✈ Every strike of the hammer is a blow against the enemy. ✈
User currently offlineFreshSide3 From United States of America, joined Nov 2012, 213 posts, RR: 0
Reply 17, posted (1 year 7 months 1 week 3 days 10 hours ago) and read 5924 times:

Quoting RussianJet (Reply 16):
Surely the question of whether passengers choose or like to fly on certain types *if* there is any conceivable alternative is a valid part of the cost equation?

On other threads, there have been valid justifications of why United is better off using RJs on SEA-LAX. I can understand that, but.......bottom line is, the Premier travelers hate them, and are mostly taking AS(who have more comfortable 737s) on this route nowadays.


User currently offlinena From Germany, joined Dec 1999, 10601 posts, RR: 10
Reply 18, posted (1 year 7 months 1 week 3 days 10 hours ago) and read 5896 times:

Looking at the fuel/km/pax ratio, RJs are generally uncompetitive, the RJs using not just 10 or 20 percent more fuel which would be the difference in favour of a A380 against a 777, but multiple times. If memory serves me right, the now retired CRJ200 of LH used almost three times more fuel than the A380 per pax. Totally unacceptable these days. Its so much that in the latest LH "Balance" reports the specific fuel consumption of RJs isnt mentioned anymore.

User currently offlineRussianJet From Belgium, joined Jul 2007, 7687 posts, RR: 21
Reply 19, posted (1 year 7 months 1 week 3 days 10 hours ago) and read 5854 times:
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Quoting FreshSide3 (Reply 17):
On other threads, there have been valid justifications of why United is better off using RJs on SEA-LAX. I can understand that, but.......bottom line is, the Premier travelers hate them, and are mostly taking AS(who have more comfortable 737s) on this route nowadays.

Are such routes really so few? On a point I raised earlier which doesn't seem to have been picked up, how about the off-set in costs from connecting premium pax? I accept what you say about how many high-paying premium pax don't like them, but on routes where there is no alternative AS 737 for example?



✈ Every strike of the hammer is a blow against the enemy. ✈
User currently offlineSavannahMark From United States of America, joined Dec 2012, 45 posts, RR: 0
Reply 20, posted (1 year 7 months 1 week 3 days 10 hours ago) and read 5837 times:

Guess this topic pretty much explains the reason for all those parked ERJ-135s.

User currently offlineFreshSide3 From United States of America, joined Nov 2012, 213 posts, RR: 0
Reply 21, posted (1 year 7 months 1 week 3 days 9 hours ago) and read 5774 times:

Quoting RussianJet (Reply 19):
Are such routes really so few? On a point I raised earlier which doesn't seem to have been picked up, how about the off-set in costs from connecting premium pax? I accept what you say about how many high-paying premium pax don't like them, but on routes where there is no alternative SA)">AS 737 for example?
SA)">UA has not only gone to small planes, but also, the first UAX trip from SEA-LAX does not leave until 11am. Not really a convenient schedule for the business traveler. And one of the trips is a single-class cabin, so even if you wanted to buy first, it doesn't exist.

Virgin America does have SEA-LAX using an Airbus, too......but no connection with any of the other US carriers. You can't check bags onto other carriers' flights (particularly international)out of LAX due to no agreements. You don't get reciprocal miles, either.....and SA)">AS is a partner with both SA)">AA and SA)">DL, not to mention other international carriers.One of the flights on Virgin America also is a no-op on two days of the week(I think TU/SA, but correct me it I'm wrong).

SA)">AS also offers LGB, BUR, SNA, and SEA.

There's more to it, but I think this is enough to give you an idea of how wrong the SEA-LAX RJ scenerio is on SA)">UA.

[Edited 2012-12-05 06:54:50]

[Edited 2012-12-05 06:55:38]

User currently offlineenilria From Canada, joined Feb 2008, 6999 posts, RR: 13
Reply 22, posted (1 year 7 months 1 week 3 days 9 hours ago) and read 5746 times:

OIL PRICES

You can lock the thread now


User currently offlineRussianJet From Belgium, joined Jul 2007, 7687 posts, RR: 21
Reply 23, posted (1 year 7 months 1 week 3 days 8 hours ago) and read 5643 times:
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Quoting enilria (Reply 22):
OIL PRICES

You can lock the thread now

Well sure, clearly that was always going to be a huge factor - but I'm sure you are aware that markets are pretty diverse, particularly comparing different countries, and that there are a hell of a lot of other things to consider too.



✈ Every strike of the hammer is a blow against the enemy. ✈
User currently offlineNorthStarDC4M From Canada, joined Apr 2000, 2987 posts, RR: 37
Reply 24, posted (1 year 7 months 1 week 3 days 7 hours ago) and read 5576 times:
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CHAT OPERATOR

RJs had their place where they made sense (60-120 min light feeder flying from hubs, where turboprops are time pressed and the loads are too light for 150+ seat mainline). The problem is in the US the majors moved them into EVERYTHING regional and even into mainline markets displacing the 100-150 seat class mainline 737/Dc9/MD80/A320/F100/etc with 2 or 3 50 seaters instead. It's this last bit that is backfiring now.

Delta is trying to move mainline back into the 100 seat range with the 717 purchase... but they have alot of RJ flying to shift as well.

It would seem to me though that the other majors are now stuck. They basically have to mix larger types and RJs on many previously mainline markets, and the costs of competition, fuel and all the associated financial tangle of the economy. But it really is their own doing in many ways:

AA dumped the F100 without replacing it.
United's smallest type is the 737-500 which is being retired, pmUA's smallest type was the A319.
USAirways smallest now is the A319 having just retired the 733...
Makes a big gap that RJs just aren't good at filling in all markets unfortunately.



Those who would give up Essential Liberty to purchase a little Temporary Safety, deserve neither Liberty nor Safety.
25 Post contains images sweair : I flew a CRJ200 with Air Nostrum, ok my hair licked the ceiling but for a 40 minute flight it is ok, it is a nice ride, much sportier than 737/A320, y
26 mandala499 : I'll add to: Fuel cost per seat is about 1.75-2.5x on a 30-50 seater RJ comparing to a 738 or A320... depending on how you calculate. I'll add another
27 Flighty : To be fair, no I wasn't agreeing. The CRJ200 or ERJ145 burns less fuel carrying 45 passengers than an A320 does carrying 45 passengers. Less than an
28 Goldenshield : Is it? It'd be even more unacceptable to send an A380 to do a CRJ's job.
29 LHCVG : True. BUT, the number of those markets that remain viable continues to shrink as fuel stays high and/or rises further. It's not that there aren't mar
30 maxpower1954 : Mainline US Airways flies 20 E-190s, with 99 seats.
31 flashmeister : Not disputing this, but just wondering where you've heard this -- other than the marketing tour incident, I haven't heard a lot about the performance
32 falstaff : I agree. I Remember back in when the CRJ flying was getting hot and heavy at DTW I remember seeing NW banners hanging around the old Davey Terminal s
33 coronado : The will still be a demand for a 50 pax jet, just not much of it. There are certain towns that are far enough away that are but yet are small enough w
34 mpdpilot : I agree with the conscious here that cost is what driving airlines to get rid of the 50-seaters. However! I really like flying on a CRJ-200/700/900/ER
35 RamblinMan : Not true. In most cases a dash 8 would be even better. I remember in the late 90s the RJs being used as a marketing gimmick... "Now introducing all-j
36 multimark : Were that true, I doubt you would have seen a savvy airline like WS picking them for their new regional.
37 Post contains images Lufthansa : . Living here in Australia, we don't have many of the things. The CRJ-200 was introduced by Ansett Australia as a BAe 146 replacement but a subsidiar
38 PassedV1 : Absolutely true. I was American Eagle in the mid 90's when the RJ's were just starting to become all the rage. I find it hard to believe that there i
39 RussianJet : Not sure how this comment passed me by earlier - why is it 'evidently' so?
40 mpsrent : I've spent many a flight on CRJ200's and I must admit that given what they were designed for, they aren't as bad an aircraft as some would make them o
41 woodsboy : All of us have seen the small/medium RJ crisis coming. After 9/11 with the great reduction in air travel, bankrupt carriers and the mass layoffs of pi
42 Goldenshield : A LOT of airplanes were affected by that mandate, including the venerable 737-2/3/4/5, F-100, DC-9s, and BAE-146.
43 Cubsrule : How many city pairs have a few RJs a day and hourly nonstops to a city within, say, 100 miles? There aren't many. ORD-AVP comes to mind. It's usually
44 RayChuang : I think with the Bombardier Dash 8 Q400 capable to carrying under 75 passengers with near-jet speeds and higher fuel efficiency, that explains why sma
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