United Ditches More 50 Seat Jets, Mesa Takes Hit

@ Dan Webb:
Are you referring to the larger RJs ASA will start flying?

I am glad to see Skywest has enough business sense and wherewithal to get the additional flying for their airlines.

From a pilot’s perspective, that this flying is moving away from Mesa is a good thing. We absolutely do not want to see people without jobs. However, whenever airline managers proclaim ‘industry standard wages’ as their reasoning that employees should be paid sub-poverty wages, they use Mesa as their example.

I wonder if long-term we’ll see SkyWest and/or Republic start buying up the remaining few regional carriers just to scuttle them and stabilize that market for themselves (are there any other medium to large regionals?) I don’t know what SkyWest’s balance sheet is like, but assuming Frontier continues to do well for Republic, I could see them waiting a little longer for Mesa to drop to its knees then snapping it up for peanuts.

Wasn’t the switch from props to small jets because it was thought the public would rather fly on a jet no matter the size then a prop? And airlines switching to regional jets assumed people would fly their ‘jet’ airline over the prop airline.

Didn’t anyone crunch the numbers or was it because fuel was lower and back then it made sense to have small jets and they would make money?

I guess it all depends on the plane itself. Years ago I flew TWE (Trans World Express) BOS-JFK-DCA on two different type 50ish seaters they had and one was really roomy that it surprised me. The other I looked down at the seat and wondered where my legs were going to go. Come to think of it, I did/thought that the first time I flew on one of UA’s 50 seat CRJ’s also.

What goes around comes around as the saying goes, so we are heading back to props for the small flight segments and markets and jets for the longer haul markets.

From working at a regional, I know the cost pressure the majors put on their regional partners is enormous. At one of my previous (regional) airlines, the former major partner seemed shocked that we were not willing to sign a deal which would have guaranteed we’d be losing money on every flight…but it seems right now nobody is very happy about 50-seat aircraft and is looking actively to replace them. Mesa does have very low costs but they also have reliability issues (cancellation rates, etc.) or at least used to and I imagine this was a factor in United not renewing the contract as well…or perhaps United just wants fewer 50-seat jets flying under its colors.

Chuck wrote:

At one of my previous (regional) airlines, the former major partner seemed shocked that we were not willing to sign a deal which would have guaranteed we’d be losing money on every flight….

The majors are turning into flying Walmarts. They want the suppliers (regional airlines) to make almost no money, so they can make more money when selling the service to the traveler.

United isn’t parking 50-seaters. They’re simply replacing Mesa. There is an RFP out for the remaining flying which some expect either ASA or XJT to win (some even speculate that the ASA flying is an incremental addition of 50-seat flying to United).

Part of the reason for the rapid rise and quick fall of the 50-seat jet is that they offered the major airlines two core applications:

First, as Benet Wilson notes, the 50 seaters were effective ways to fill out a hub-based network with routes that were too thin for a 737 or to overfly hubs entirely in markets that could command a fare premium. These are still valid uses of a small jet, and I think you’ll continue to see 50 seaters serve these routes (albeit as part of a much smaller overall fleet).

Second, the 50 seaters allowed the majors to replace mainline capacity with outsourced providers that paid their workers far less than mainline wages. As major airline employees have seen their wages drop such that the cost of operating a 737 is not orders of magnitude greater than that of a CRJ, this second application becomes far less compelling for the majors, and you’ll see the small jets dedicated to these functions culled from the herd.

Overlaying all of this are fuel prices — it’s easier to justify marginal applications when oil prices are low.

Going forward, I think you’ll see the retirement of 50 seat jets continue with 85-99 seat jets being the new sweet spot for “regional” service.

None of this leaves Mesa in a good position. They’ve already got 39 “excess” aircraft, according to the most recent quarterly report (7 CRJ, 12 ERJ, and 20 B1900). None of those are coming back into service anytime soon, and adding the 26 CRJ and 10 Dash 8 that United is dropping to the 22 ERJs that Delta is trying to drop will leave Mesa with 97 of its 178 aircraft without homes (and without revenue).

Ouch, their stock took a pretty good hit when the news came out. However when I heard some of the pilots talk at RNO when I used to work for UA they commented on how they needed to have larger aircraft for a better profit margin, and 50 seaters would someday be eliminated, didn’t think it would be this soon.

There will ALWAYS be a market for 50 seat jets. Most prefer them over props any day. But of course. Americans have very short memories. They all complained about props back in the 90s. I was at AA when the prop crashed in Indiana! ..and now some are saying they wish to return to them….OR could it be the new mean bean counters forcing it? LOL

Regardless. Operators like Mesa and others, need to figure out a way to utilise these aircraft. How DUMB can they be! Many smaller airports are crying out for cheap flights! Adopt some type of Southwest operation, get into a town like COS and make a go for it! HP and now US is leaving COS. What? Are the people no longer flying from there? lol

> they’re going to have to accept that those smaller airplanes need to be flown for less.

I thought those regional pilots already make about the same as your average school bus driver (okay, I didn’t research that, but the numbers thrown around are pretty scary).

CF wrote:

A lot of those places could be better served by props, but American already had a black eye from the ATR crash in Indiana in 1994 so it really wanted to get rid of those props.

I don’t think AA actually got rid of those ATRs… they just moved them down to San Juan, where they were unlikely to encounter the cold weather that those ATRs faired poorly in. Then AA later downsized the San Juan hub… and didn’t those ATRs end up in DFW and LAX?

@ jordan:
Mesa isn’t going to be able to compete on convenience alone when there’s a cheaper option so near by; COS is not even a two hour drive from DEN. With three major airlines using DEN as a significant base, along with the rest of the mainlines that offer some level of service there, it’s unlikely flying from COS (which almost always requires going through DEN anyway) is going to be cheaper. And the flying public loves chasing discount fares; I did it myself all the time when I lived near MSN, but MKE was only a 90 minute drive away. Sometimes I could save $200 or more.

And if you read the rest of the comments in this thread, the consensus is that it’s difficult to fly a 50 seat jet profitably to begin with — if you’ve got downward pressure on your ticket prices, and you can’t even fill those 50 measly seats because your customers are running to a nearby super-regional or hub airport to hop aboard real planes, you’re screwed.

I read part of Republic’s latest 10-Q and it seems their new joint venture in Hawaii may very well provide the vehicle for Republic to take over Mesa (in much the same way as they aquired Frontier and Midwest). While I may be reading more into this than what’s there, when all is said and done, there may not be much left of Mesa to take over.

the crj-200 was not designed from scratch….it was a corporate business jet= the challenger adapted to regional passenger jet. the economics of bizjets is way different than commuter airlines, this is why horizon airlines discoverd the hard way and mainly due to laws of physics…that it was well worth their effort to sell all their CRJ-700 jets and stick with turboprops. it basically fly’s the same weight, and speed at a much lower cost.and with more head and leg room.