kbuf737
Posts: 765
Joined: Thu Dec 04, 2003 2:22 pm

Many Tiny Flights Vs. Big Mainline Flights

Tue May 10, 2005 2:12 pm

Is it more profitable to run say 3 flights a day from BUF-ATL like DL used to instead of say 9 or 10 little CRJ flights with some smaller mainline mixed in at peak hours?

It seems that when DL used a route system focused on more mainline with less options to connect that they were a much more profitable airline, or is it simply speculation to say that?

-KBUF
The tower? Rapunzel!!!!!!
 
baw716
Posts: 1461
Joined: Thu Nov 20, 2003 7:02 pm

RE: Many Tiny Flights Vs. Big Mainline Flights

Tue May 10, 2005 3:45 pm

The answer is: I don't know.

It would require an analysis of the unit cost and unit revenue generated on that segment. If DL ran a MD90 BUF-ATL and those three flights generated a margin of 0.04 cents per rpm, compared to DLX running 9 flights with the CRJ running those flights at 0.053 cents per mile. Nine flights at 70 pax per a/c is 630 seats per day. DL MD90 is 160 seats x 3 is 480 seats.

Since DLs unit margin is less than DLX, then it makes better sense to operate the CRJs. However, let's reverse things and say that the MD90s produced a unit margin of 0.053 c/rpm v. 0.04 c/rpm on the CRJs, with the same number of flights. DL would be better served to add one more MD90 frequency if it can fill 95% of those seats on a daily basis. DL 160 x 4= 624 x 0.053 You gain a little more pure margin by having the 3rd MD90 run the aircraft.

So, my call is going to be predicated on reviewing all the numbers. If all the numbers remain, using DLX is still more expensive option.

baw716
David L. Lamb, fmr Area Mgr Alitalia SFO 1998-2002, fmr Regional Analyst SFO-UAL 1992-1998
 
764
Posts: 490
Joined: Tue Jul 31, 2001 6:34 pm

RE: Many Tiny Flights Vs. Big Mainline Flights

Tue May 10, 2005 3:54 pm

Usually it is more cost effective to use larger aircraft. RJs tend to be rather expensive per seast mile.

The other issue is cutomer goodwill though. Le tme use FAR as an example. We have four UAX CRJs to DEN and three UAX CRJs to ORD. Also, NW has around six mainline and two or three regional aircraft (ARJ, SF3, etc.) into MSP. People up here strongly prefer NW and they mainly do so because of the larger aircraft. Personally I would fly NW rather than UAX, but since I usually connect to UA transatlatic flights in ORD, I of course am stuck on those CRJs.

IMHO CRJs cause customer dissatisfaction, higher cost and congestion at the bigger airports such as ORD. For Fargo I would much rather see one or two 737-sized aircraft into bothe ORD and DEN and an additional CRJ service to each one. This would be the perfect compromise.

[Edited 2005-05-10 08:55:22]
 
kbuf737
Posts: 765
Joined: Thu Dec 04, 2003 2:22 pm

RE: Many Tiny Flights Vs. Big Mainline Flights

Tue May 10, 2005 9:31 pm

sometimes for pax comfort you have to give up amenities like flight convenience. And the airline itself may have to realize that its b=usiness plan is better with less flights on bigger planes than many flights on many more little planes.
The tower? Rapunzel!!!!!!
 
lehovec
Posts: 259
Joined: Thu Apr 21, 2005 6:21 pm

RE: Many Tiny Flights Vs. Big Mainline Flights

Tue May 10, 2005 9:41 pm

Quoting 764 (Reply 2):
IMHO CRJs cause customer dissatisfaction

Why exactly is this?
 
cloudboy
Posts: 989
Joined: Mon Jan 26, 2004 12:38 pm

RE: Many Tiny Flights Vs. Big Mainline Flights

Tue May 10, 2005 9:44 pm

Unfortunately it is not a purely mathmatical question. In pure numbers, using larger planes would result in lower costs, since you have lower costs for items such as pilots, equipment, gates, and all the operational overhead.

On the other hand, having more frequent flights may actually increase the passenger load, because you are now offering better choices for time. You are also spreading your passenger load more evenly.

Yet you can also counter that by the fact that in current configurations many passengers prefer larger aircraft.

So there is a huge amount of guess work and passenger research thrown into something like this.
"Six becoming three doesn't create more Americans that want to fly." -Adam Pilarski
 
ejmmsu
Posts: 1647
Joined: Sat Oct 23, 2004 6:05 am

RE: Many Tiny Flights Vs. Big Mainline Flights

Tue May 10, 2005 9:54 pm

DL is the mother of the regional jet here in the US. They were the first US airline to buy them in bulk, and they have by far the most RJ's of any US airline. With fuel where it is at, this is one of the main reasons they are in deep doo-doo. Its just too expensive these days to compete with LCC's when there are so many RJ's in the fleet.

When DL retired their DC9's and turboprops, they decided to replace all of them with CRJ's. DL would be much, much better off if that order had instead been for a mix of 717's CRJ's and new turboprops. Of course, hindsight is 20/20.

Quoting KBUF737 (Thread starter):
It seems that when DL used a route system focused on more mainline with less options to connect that they were a much more profitable airline, or is it simply speculation to say that?

The data supports it my friend, and I think you are right on. Its why airlines like AA and NW, and LCC's have weathered the storm a little better.
"If the facts do not conform to the theory, they will have to be disposed of"
 
kbuf737
Posts: 765
Joined: Thu Dec 04, 2003 2:22 pm

RE: Many Tiny Flights Vs. Big Mainline Flights

Tue May 10, 2005 10:54 pm

Ejmmsu,

maybe its time to bring the '27s out of the desert.  bouncy 
The tower? Rapunzel!!!!!!
 
ejmmsu
Posts: 1647
Joined: Sat Oct 23, 2004 6:05 am

RE: Many Tiny Flights Vs. Big Mainline Flights

Wed May 11, 2005 12:43 am

Quoting KBUF737 (Reply 7):
maybe its time to bring the '27s out of the desert.

Well, they are terrible gas-hogs too.
"If the facts do not conform to the theory, they will have to be disposed of"

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