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Squawks & HeadlinesSmall Communities will have to Drive or take Amtrak

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Small Communities will have to Drive or take Amtrak

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Major airlines are phasing out small regional jets according to this recent article. Communities in the midwest will have to drive miles out of their way to Denver or Chicago, or other ares to major hubs. With this, there will be no more express flights serving South Dakota to Denver for example, so people from South Dakota will have to drive to Denver, in some cases the wrong direction to their destination. Ridiculous what is happening to the airline industry. (www.washingtonpost.com) More...

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jmedina94
Julian Medina 0
I still don't understand this seeing as regional airlines make up more than half of scheduled commercial flights. From what I understand, Regional airlines are profitable because the major airlines buy fuel and outsource to another company to operate the flight. If they dropped regional flights, and the majors such as Delta started using the MD-88 or MD-90 to service these smaller communities, isn't that more of an expense for the major airlines?

I do get the point that Regional Jets cost a lot to fuel, but wouldn't that mean more Q400's and similar props would start getting phased in?
FedExCargoPilot
I agree, I wonder if anyone on here sees why this is a good move...that's why I posted this. I see someone posted this also.
Falconus
Falconus 0
Taking the Amtrak is an attractive option... Or it would be, if it were an option :-/.
99NY
99NY 0
This strikes me as an opportunity for existing or new regional airlines to create or increase their operational area, provided that they can get aircraft which will create a profit...I forsee a ugly hike in ticket prices for these 'out of the way' airports if their service is to continue.

Interesting that Delta finds more profit in operating an MD-88 over a CRJ or similar aircraft. The article makes a reference to the glut of regional jet purchases in the late 90's being a major issue now that fuel prices are high. Is it part of the aircraft design to be so fuel inefficient? Was an emphasis placed on speed over economy?
WALLACE24
WALLACE24 0
I'm guessing that most are not profitable or only marginally so. Probably where the headcount of pax is large enough they will run a larger jet going forward.
flightcheck84
I think that's a bad idea. In fact, in the past two months, I've noticed an increase in RJ and turboprop traffic here at CMH. Delta is the only one that's slowly phasing out their MD-88s here. They've currently replaced DAL1009 with a 757 (which I can't complain).
preacher1
preacher1 0
Well, with a $2.38ct per gallon increase in fuel in 11 years, and every comment here in FA bitching about airports subsidies over the last few months, somebody will have to pay the bill to where a service can be operated PROFITABLY. That has probably been offered or at least surveyed in ticket prices before these phaseouts started and enough folks don't want to pay the cost. That fuel price increase is a cruel reality of today's world and a reminder that what was the norm 10 years ago is subject to the winds of change. Cruel as it may sound, Airlines are not government entities. They are private corporations that are in business to make a profit.
drdisque
Ben Deneweth 0
The issue is that with fuel where it is, it's unprofitable to serve places like St. Cloud, Oxnard, Muscle Shoals, Hattiesburg, or Alpena. They simply don't have enough passengers to fill a reasonably efficient aircraft at a high enough fare to cover the costs. Bigger aircraft make the problem worse.

Pierre will continue to have air service, don't know why they picked that one to harp on. Maybe because their manager picked up the phone.

Cape Air has proven in places like Kirksville, Augusta (ME), and Cape Girardeau that the most cost-effective way to serve these communities if you insist that they have air service is via 9-seat aircraft with subsidy and codeshare. However, many of these places like Muscle Shoals, Thief River Falls, and Devils Lake are deluded into thinking that they somehow "deserve" 30 seat prop or 50 seat jet service subsidized by the taxpayer to the tune of $3M+ a year.
WALLACE24
WALLACE24 0
I am not in favor of a subsidy. It either works or it don't.
kangforpres
Well 60 miles is really not that far to have to drive to a major hub like MSP or LAX. What is more troubling is the small cities with only 1 airline servicing them like Pierre which is not driving distance to anything. What happened to the Govermeemt's minimum air service program which gave airlines a subsidy to provide service to unprofitable markets? I think it still exists.

We had to fly to Watertown SD last summer from the West Coast for a family funeral, our connection into MSP was late so we missed the last flight of the day to Watertown, and all of the rental cars in MSP were sold out! If it weren't for a relative to loan us a car we would have been out of luck.
preacher1
preacher1 0
I don't know the reason but in some of these smaller venues, the smaller planes might be more acceptable if a codeshare was there. That was mentioned in an FA article the other day about Delta pulling out of Tupelo MS.That would be a pain in not being able to buy a thru ticket, regardless of price. One thing that must be noted also, and I did not know this until recently, the majors have FULL SEAT DEDICATED contracts with some of the regionals, meaning they get paid as full whether they are or not. That is why you may see some of these routes being replaced with larger planes where needed. ASA, before it's sale/merger was dumping all it's 50pax stuff going to 90pax. Folks like DAL may have an eye toward doing it themselves if a route goes back to that volume and they are paying for it anyway. Lot's of different things go into decisions like that that may make no sense at all on first blush.
preacher1
preacher1 0
Regarding customer satisfaction, I think speed is the biggest thing and like anything else, folks have gotten used to the RJ's and think they are going backwards if they fly on a prop.
drdisque
Ben Deneweth 0
EAS still exists and the majority of these communities will retain service through that program. St. Cloud lost service completely because it is too close to MSP to be eligible. Oxnard lost service because it was not served prior to deregulation.
preacher1
preacher1 0
Well, EAS does still exist but I think it is on the chopping block and at some point and time will go away. Then the outcry will really begin.
olseric
olseric 0
St Cloud was doing just fine. It doesn't take long to fill up a 34 seat Saab. The issue is, Delta is cutting them saying they're unprofitable which I would disagree. They burn next to nothing for fuel, have an impeccable safety record, and can go places that a CRJ wouldn't dare. The problem is, the labor costs are still the same though - 1 F/A, 2 CREW...therein lies the issue. And then there's issue #2...the flying public throws a fit if they see props on the wings when they board.
olseric
olseric 0
Never said it was a billion dollar route...but you pointed out the fundamental problem...enough money. Then again, if the CEO of a company can only eke out 2 mil versus 3 mil, that would be a tragedy.
jmedina94
Julian Medina 0
I posted this a couple of days ago.
preacher1
preacher1 0
Not sure of the exact specs but, depending on the config, the 57 is cheaper operating
drdisque
Ben Deneweth 0
A lot of people seem to think that the Q400 is some sort of magical airplane that can cure any airline economics problem. It's not. Here are some of the problems:

1. The 50-seat RJ's are bought and paid for, or in a worst case scenario, a sunk cost. A Q400 is expensive and has a lead time for delivery. Buying a Q400 is a risk and not something that either the majors or the regionals want to pay for.

2. The Q400 has great economics on stage lengths below 400 miles. But between 400 and 600 miles the Q400 and 50-seat ERJ and CRJ have very similar operating CASM. Above 600 miles the RJ's have better operating CASM. The 70-seat RJs are even better on these stage lengths. The Q400 works in places like the northeast where stage lengths are short and there's plenty of pax. But out of hubs like MSP, DEN, or SLC there's very few places the Q400 could serve more economically than a 50 seat RJ.

3. Many of these markets struggle to fill 30-50 seat aircraft. Why on earth would you throw a 70 seat aircraft like the Q400 at the market just to have lower CASM? You'll only end up paying more to fly more empty seats around.

4. Lots of Americans still don't like props and refuse to fly on them. It doesn't make much sense, but it's true. At the airline I used to work for, customer satisfaction was about 10 pct higher on the CRJ vs. the E-120 when you hold all other things constant (ie same route) - and the CRJ is the worst customer satisfaction RJ.

5. The Q400 is a bit of a maintenance hog while the ERJ and especially the CRJ have proven to be very rugged and reliable.
WALLACE24
WALLACE24 0
Why would you suppose that an airline would cut a profitable operation ? Quitting because they are making too much money I suppose.
WALLACE24
WALLACE24 0
You say it was doing fine. The CEO has the financials, do you?
jmedina94
Julian Medina 0
Great analysis! I didn't know that the Q was inefficient at times. I am interested in seeing what happens to regionals in the next couple of years. Especially when you look at a plane such as an E170 or E175 that can handle longer hauls. Why would Delta decide to use an MD-88 especially when hiring in majors is find these days? One important question I have is what will happen to regionals as a result of this?
jmedina94
Julian Medina 0
Also I don't understand this article seeing as SkyWest for example just signed a contract with US Airways as well as Alaska Airlines earlier this year.