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intotheair
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Business Case For A Regional-style LCC?

Mon Dec 14, 2015 5:54 am

While one's definition of what an LCC is can vary greatly, at least in North America and Europe, LCCs are more often than not use A320 or 737 aircraft and operate out of or near major airports to compete against the major carriers. But would there ever be a business case for a startup airline to use regional aircraft and operate out of airports that often only receive regional/express service from the major carriers? Perhaps something like this has already happened before. I could be completely clueless, but I would think an airline could operate a fleet of E-jets and/or some CRJ700/900s and fly long and thin routes out of some secondary and underserved airports.

The only airlines I can think of that have anything similar to this might be Volotea, Allegiant, and maybe a few others, but their aircraft types are not really considered regional planes at all.

[Edited 2015-12-13 21:55:32]
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hoons90
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RE: Business Case For A Regional-style LCC?

Mon Dec 14, 2015 5:57 am

Independence Air used to operate a bunch of CRJ-200s alongside A319s.

Smaller RJs have a high CASM and thus may not be suitable for low cost operations.
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LAXintl
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RE: Business Case For A Regional-style LCC?

Mon Dec 14, 2015 6:07 am

The math simply does not work. You need higher revenues to cover cost of smaller aircraft.

Even something like the A319 is becoming too small for growing number of LCCs as they shift to larger A320 and A321s that offer better per seat cost to maximize margins.
From the desert to the sea, to all of Southern California
 
JobsaGoodun
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RE: Business Case For A Regional-style LCC?

Mon Dec 14, 2015 8:01 am

I'd probably say the closest to this is Flybe in the UK. They operate the largest fleet of Q400's (approx 60) in the world alongside a mix of E175 and E195 (22). Some would say that they're not especially cheap but in the regional game I think you're limited with how far you can go.
 
skyhawkmatthew
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RE: Business Case For A Regional-style LCC?

Mon Dec 14, 2015 8:06 am

You mean like this?  
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marosbts
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RE: Business Case For A Regional-style LCC?

Mon Dec 14, 2015 8:49 am

Bombardier has been selling the Q400 as having cost per seat close to B737 at some time. The biggest issue I had with that plane (and have till today) is the high ownership cost (lease rate) for which you actually can get a decent 737 which gives you much more seats. Obviously, those are only good in case you can fill them. And thats where certain smaller aircraft come into play - in case you know you will not fill a 737 even if you stimulate the demand by offering low fares, then an Q400 or a ERJ175/190 is the better choice. In that case however you will most likely not be considered a true low cost carrier, but lets say, some kind of hybrid carrier which offers reasonable fares on niche routes where a 737-800 would simply be too big.
 
anyong
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RE: Business Case For A Regional-style LCC?

Mon Dec 14, 2015 8:54 am

Bangkok Airways...

Also Interjet in Mexico flying Sukhoi Superjet
 
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GCT64
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RE: Business Case For A Regional-style LCC?

Mon Dec 14, 2015 9:17 am

Quoting JobsaGoodun (Reply 3):
I'd probably say the closest to this is Flybe in the UK.

Took the words out of my mouth, this is exactly the FlyBe model. Being an LCC with regional aircraft is not without challenges, as FlyBe have shown, but I think it is possible to make it work if you genuinely keep your costs low and are agile.
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dhr
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RE: Business Case For A Regional-style LCC?

Mon Dec 14, 2015 9:24 am

Quoting marosbts (Reply 5):
The biggest issue I had with that plane (and have till today) is the high ownership cost (lease rate) for which you actually can get a decent 737 which gives you much more seats.

This is the biggest problem with operating smaller aircraft. The lease costs are so high and in some cases equal to A320/B737 rates, then you have less seats to fill meaning your fares will be higher. I suppose someone using older aircraft or newer (all must be bought) could make it work but you need scale to get a lower purchasing price for the aircraft.
 
UPNYGuy
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RE: Business Case For A Regional-style LCC?

Mon Dec 14, 2015 3:23 pm

Porter is an LCC style regional operation using all Q400s (for right now, anyway). They are trying to get the CS100 on site too, and those are still regional a/c.
 
silentbob
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RE: Business Case For A Regional-style LCC?

Mon Dec 14, 2015 4:11 pm

You have to have some special circumstances to make make flying a viable alternative on a "regional" route. Borders, islands or areas of heavy traffic are the types of things that can make security lines and waiting to board seem like a reasonable trade off.

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