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Author Topic: Real world CRJ efficiency  (Read 1499 times)

tm07x

  • Former member
Real world CRJ efficiency
« on: October 12, 2010, 05:45:20 PM »
Hi,

Anyone here who knows how profitable a CRJ 200 is on 600-800nm routes?
What is break even pax?

Considering it's being operated in EU.

DenisG

  • Former member
Re: Real world CRJ efficiency
« Reply #1 on: October 12, 2010, 06:02:17 PM »
That really depends on a huge number of variables... e.g. slot costs, fuel prices, etc. Difficult to judge from a general point of view.
Denis

d2031k

  • Former member
Re: Real world CRJ efficiency
« Reply #2 on: October 12, 2010, 06:18:57 PM »
A Denis pointed out, it's incredibly difficult to make a direct comparison with the real world.  Airlines in reality are tied into a great deal more than simply leases, such as maintenance, pilot, cabin crew and staff contracts etc. so they may be operating the aircraft at low profits or even at a loss.

I can only speak from personal experience (and I apologise it is a bit a of tangent to the original question) but airlines in the EU such as Lufthansa are moving away from the smaller CRJs, as C-class demand has dropped and fuel prices have risen.  For example, the MAN-HAM route (438NM) used to be a double daily CRJ-200 and the aircraft usually had the config. C5/Y40 or even C7/Y36.  Nowadays it's a 3x daily service and it's not uncommon for aircraft to run in an all 50 economy config. CRJ-700s are also moving in on the route now too replacing their smaller compatriots, as either demand has increased or it's simply not profitable to operate the CRJ 200s.



From the Lufthansa 2009 Annual Report:

A decision was therefore taken as part of Climb2011 to expedite withdrawal from the 50-seater segment and adjust the delivery timetable for all our order commitments. We
have nevertheless maintained the orders themselves. This ongoing investment improves the efficiency and the environmental friendliness of the fleet – especially regarding fuel consumption and noise emissions.




Anyway, I hope that's of some interest, but from this I would presume that the break even figure is pretty high! :)

tm07x

  • Former member
Re: Real world CRJ efficiency
« Reply #3 on: October 12, 2010, 06:19:48 PM »
Low slot costs, free on destination. low pricing @ hub.

scandinavian fuel costs. meaning they are prolly expensive.

pax demand is low. but you'd have to frequent the route twice a day atleast.

I'd say low 40 to high 70 pax demand pr day.
fridays and sundays estimated to 70-110.
saturdays only one flight.

what more info do you need?

tm07x

  • Former member
Re: Real world CRJ efficiency
« Reply #4 on: October 12, 2010, 06:31:33 PM »
A Denis pointed out, it's incredibly difficult to make a direct comparison with the real world.  Airlines in reality are tied into a great deal more than simply leases, such as maintenance, pilot, cabin crew and staff contracts etc. so they may be operating the aircraft at low profits or even at a loss.

I can only speak from personal experience (and I apologise it is a bit a of tangent to the original question) but airlines in the EU such as Lufthansa are moving away from the smaller CRJs, as C-class demand has dropped and fuel prices have risen.  For example, the MAN-HAM route (438NM) used to be a double daily CRJ-200 and the aircraft usually had the config. C5/Y40 or even C7/Y36.  Nowadays it's a 3x daily service and it's not uncommon for aircraft to run in an all 50 economy config. CRJ-700s are also moving in on the route now too replacing their smaller compatriots, as either demand has increased or it's simply not profitable to operate the CRJ 200s.



From the Lufthansa 2009 Annual Report:

A decision was therefore taken as part of Climb2011 to expedite withdrawal from the 50-seater segment and adjust the delivery timetable for all our order commitments. We
have nevertheless maintained the orders themselves. This ongoing investment improves the efficiency and the environmental friendliness of the fleet – especially regarding fuel consumption and noise emissions.




Anyway, I hope that's of some interest, but from this I would presume that the break even figure is pretty high! :)

interesting.

there is absolutely ZERO C demand on this route what so ever.
However, norwegians are accustomed to flying Y class, and there is a good amount of business travelers on the route in question.
meaning, they'll PAY full-fare. and not discounted non-flexible tickets.

Widerøe and SAS operating the same route, although connecting, have extremely high ticket prices when paying full-fare.
it's around 500-800 euros.

And you'd be lucky to get any discounted fares for any less than 300-350 euros.

Profitable if there was an airline that either had a route to ENGM (OSL) and could, would or was legally allowed to do that leg, and also operated a suitable small jet.

Like a Embraer or CRJ.

I know Cimber Sterling has a fleet of CRJ 200s.
WestAir have a fleet of CRJ700 (correct me if I'm wrong) but they are all in cargo config, again I might be wrong about the latter, and former.

SAS don't operate their CRJ's in Norway.

There is a local airline called Norwegian who are considering operations on that route. But I find it difficult to understand as they only operate 737s.
Mostly 800s and a few 4 or 3s. They'd have to fly that route twice pr day to attract any biz travelers. and @ 150 or so seats pr flight they'd be flying with 30% LF.

Offline swiftus27

  • Members
  • Posts: 4402
Re: Real world CRJ efficiency
« Reply #5 on: October 12, 2010, 06:55:42 PM »
Companies in the US are dumping CRJ1s and 2s as soon as their leases come due.

DenisG

  • Former member
Re: Real world CRJ efficiency
« Reply #6 on: October 12, 2010, 08:59:06 PM »
Yes, it looks like that the whole idea of this local to local route system (vs hub-feeding) has not been able to deliver, as a number of factors behaved differently to what was expected (surprise!).
Denis

jordanD

  • Former member
Re: Real world CRJ efficiency
« Reply #7 on: October 13, 2010, 01:24:20 AM »
Companies in the US are dumping CRJ1s and 2s as soon as their leases come due.
Yep, Delta seems like they can't get rid of theirs fast enough. Once Freedom lost their Delta contract (all they had were 50 seat ERJs) they folded. Comair is dumping half their fleet. I've even heard US admits that they simply have too many 50 seaters in their Express fleet.

Offline schro

  • Members
  • Posts: 4440
Re: Real world CRJ efficiency
« Reply #8 on: October 13, 2010, 02:23:54 AM »
The genesis of the 50 seat regional jet was really a product of the early 90's low fuel costs (less than $1/gallon) and that props were very undesirable to consumers as they were often associated with the early days of flying (slow, loud, "unsafe", uncomfortable, etc). Many airlines prided themselves in having an "all jet" fleet and learned during the first decade of regulation about how frequency can drive premium fares (as well as the S-curve effect in hubs/focus cities). Routes were also changing from being multi-stop to being hub-based. Math worked in the airline's favor to add the regional jets at a much higher incremental per-seat cost because revenues would go up exponentially by servicing another destination and connecting it to another. Jets also improved their position in OAG/Sabre/Apollo time tables (which is how the world rolled before the interwebs) - the faster the trip time, the higher the listing and the more likely it to be selected for purchase, i.e. jet to jet with a tight connection in a hub versus a 5 stop trip on a 727.


So lets simpify a bit and address the OP's question. I've seen ex-fuel per-block hour costs for a CRJ-100/200 range from $1000-$2000, depending on labor costs involved, then factor in 500 gallons/hour in fuel, and you've got a rough estimate of costs. A 600-800nm flight should cost you 2 block hours, so factor in your Jet A and you're looking at a total trip cost of roughly $4-5k.

Now that we've determined a ballpark on costs, can you fill 50 seats at at least $100 per seat per way? If so, profit. If not, loss.  ;D


Offline TFC1

  • Members
  • Posts: 805
Re: Real world CRJ efficiency
« Reply #9 on: October 13, 2010, 08:24:56 AM »
interesting.

there is absolutely ZERO C demand on this route what so ever.
However, norwegians are accustomed to flying Y class, and there is a good amount of business travelers on the route in question.
meaning, they'll PAY full-fare. and not discounted non-flexible tickets.

Widerøe and SAS operating the same route, although connecting, have extremely high ticket prices when paying full-fare.
it's around 500-800 euros.

And you'd be lucky to get any discounted fares for any less than 300-350 euros.

Profitable if there was an airline that either had a route to ENGM (OSL) and could, would or was legally allowed to do that leg, and also operated a suitable small jet.

Like a Embraer or CRJ.

I know Cimber Sterling has a fleet of CRJ 200s.
WestAir have a fleet of CRJ700 (correct me if I'm wrong) but they are all in cargo config, again I might be wrong about the latter, and former.

SAS don't operate their CRJ's in Norway.

There is a local airline called Norwegian who are considering operations on that route. But I find it difficult to understand as they only operate 737s.
Mostly 800s and a few 4 or 3s. They'd have to fly that route twice pr day to attract any biz travelers. and @ 150 or so seats pr flight they'd be flying with 30% LF.

Not sure which route you are referring to.

However, you're right about about Cimber. They operate CRJ200s between Denmark and Norway, in addition to domestic Danish routes on behalf of SAS. SAS owns several CRJ900s, and serve routes mainly between CPH and various outlying Norwegian destinations like KRS, SVG, and BGO. Cimber operates 3 daily flights with CRJ200s for SAS between CPH and ALE. Widerøe owns a fleet of Dash 8-100/300 and Q400 aircraft, and while they probably would be able to operate CRJs in the southern part of Norway, fleet commonality is more important for them. And their pilots are rated on all types.

Norwegian operates a mixture of 737-300s and 737-800s and have been very successful at that.

The thing about the Norwegian market is that there is enough demand almost all over the country from the main airports to OSL to operate several flights with 737s every day, and even demand between outlying airports like TOS and TRD, BGO and TOS and SVG and TRD. Generally there is no C-class domestically in Norway, so premium fares are basically flexible Y-class tickets. We probably travel more by air than any other European country, simply because of the geography of our country  :).

tm07x

  • Former member
Re: Real world CRJ efficiency
« Reply #10 on: October 13, 2010, 09:38:38 AM »
yeah, but the route in question is Lakselv - Oslo.

To refine the question. Would Norwegian have any chance operating that route with thir 73s?
The pax demand is about 5000 a month. so let's play it safe and say 150 pr day.

I don't know how Norwegian operate, but to attract any business travelers you would need to fly atleast twice a day.

A a morning and an afternoon flight. I'm sure the CRJ 200 would meet the demand. As 90% of the travelers at Banak Airport are to TOS.
I'd say atleast 70% of them connect to Oslo. Even at a mere 50% the route could still prove profitable for Cimber.

The layover in Tromsø adds about 1.5 or 2 hours to any trip to Oslo. The trip itself from Lakselv to Oslo takes no longer than from TOS.
Meaning you shave off 4 hours on a round-trip.

Being that there are many government institutions and the military in adjacency to Banak Airport one would assume that many of the tickets sold would be Y-Fullfare tickets.

Reason I'm asking is cus there is an ongoing debate in local media about that route.
And I just don't see how Norwegian could make that route viable with just a daily route.

Offline TFC1

  • Members
  • Posts: 805
Re: Real world CRJ efficiency
« Reply #11 on: October 13, 2010, 12:53:22 PM »
I'm not sure either that Norwegian would be able to make Lakselv-Oslo profitable with only one daily flight. But that would be one more direct flight than what SAS provides.

Norwegian operate as a semi-low-cost airline, with lots of routes operated 2-7 times per week from various airports, and high-frequency routes between the larger cities in Norway. Lakselv is not one of those places, and even if the demand was as much as 150 pax per day, you'd need some kind of service agreement with the Norwegian State to be able to make a profit, marginal if at all, on such a route.

And knowing the mode Norwegian operates in, adding another, smaller fleet type, is totally out of the question.

 

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