Cranky on the Web (March 7-12)

Delta tries to land new JFK terminalCrain’s New York Business
I talk to Crain’s about why Delta needs do something with its terminal at JFK.

Flying High: Southwest Airlines Posts Big February GainsBNET
Southwest saw strong double digit revenue gains in February.

Flying Higher: United Airlines February Revenues Way UpBNET
United beat Southwest’s numbers and showed that they’re really hitting their stride in the revenue game these days.

Fokker’s Back in the Airplane-Building GameBNET
Those little Fokkers are looking to start building an updated version of the F70 and F100 planes that haven’t been built for more than a decade.

Massive Snow Means Less Airline Capacity in FebruaryBNET
Feb traffic numbers are in, and what do they have in common? A lot fewer available seat miles.

Mexican’s Leading Low Fare Airline Now Owned by the Richest Man in the WorldBNET
Carlos Slim is now the richest man, and he owns an airline, believe it or not.

For those who were hoping to see my CNN International piece on the looming BA strike, I’m sorry but it doesn’t seem to be online.

15 Responses to Cranky on the Web (March 7-12)

  1. Ron says:

    If the 100-seat market is so lucrative, why are the planes not selling? The 737-600 and A318 are the poorest sellers in their respective families, and the 717 was terminated due to weak demand. The stretched regionals are now starting to reach 100 seats and appear to be doing fine, but past sales don’t suggest there’s a huge demand for airplanes this size.

    • CF says:

      I think the problem with the A318 and 737-600 is that they are shrinks that aren’t very efficient. They weigh too much for the number of people that they carry, so a new clean-sheet design can do far better. JetBlue and Republic are happy with 100 seat capacity on the Embraer 190s. Others would like to have it as well, but as Mat said, they probably don’t want to fly it at mainline rates. Except for US Airways, which actually does.

      • Ron says:

        Well, the 737-600 is a shrink only in the sense that the 717 is a shrink; you can also see it as an update of a smaller predecessor. Of course, history doesn’t really matter if the plane ends up being too costly.

        Southwest still have a number of 737-500s flying around, right? Last week I even saw one in the old beige livery land at LAX. What are they going to do when it’s time to replace those?

        • CF says:

          Southwest still has 25 737-500s flying, but you must have seen a 737-300. Southwest has repainted the entire fleet except for three 737-300s which are going to stay in the old colors to commemorate the first three cities.

      • Mat says:

        Although it should be noted that US Air is getting out of operating the 190s at mainline rates, selling the planes to (I think) Republic.
        It wasn’t economic, how much of that was pilot pay rate, and how much different fleet type within the US Air mix I have no idea.

        • CF says:

          Actually, the reason US Airways is selling the Embraer 190s is because those are the only ones they have flexibility with. They needed to reduce capacity but under their contracts, those are the only ones they could have ditched easily so that’s what happened.

  2. Bobber says:

    I’m wondering whether the increased United revenue is also down to the fact that the cheapest ‘United’ fares are now only on Continental-operated flights – actually flying United attracts a price premium at th moment :(.

  3. Mat says:

    The 100 seat market doesn’t work when they have the be flown by mainline pilots on mainline pay scales.
    So the “stretch regionals” who are flying larger planes under their own names at regional pilot pay scales will do just fine.
    I believe there is a huge demand for the 100-120 seat aircraft market, but not at mainline pilot rates. If the airlines cannot either outsource larger scope flying or cannot get “regional like” pay rates and work rules on their mainline contracts then the market will stagnate. Or I guess the other option is have passengers actually pay for the cost of their flights. What was I thinking, of course that won’t happen.

  4. Ron says:

    Matt, I see the argument in terms of pilot pay scales and work rules, but what does this have to do with the airframes? Why can’t you fly a 717 on a regional airline? Also, the pay scales argument applies to the U.S., but 100-seaters have been slow sellers globally.

    And what’s the difference between mainline and regional airplanes, anyway? The DC-9/717 is considered mainline at two engines and 5-abreast seating, while the BAe 146/Avro RJ is considered regional at four engines and 6-abreast seating. As far as I can tell, the only reliable difference is the history of the airframe and the manufacturer.

    • Mat says:

      Indeed what is the difference between a regional and a mainline. In the recent past regionals provided lift for mainline using aircraft that fell within the scope limitations of that mainline. So you couldn’t fly a 717 at a regional – too many seats.
      I may be wrong, but as far as I know there are no 190’s being flown under a fee for departure contract. Once upon a time there were some at Frontier, but that is no longer true (at least practically, who knows what the paperwork between the various entities owned by Republic look like).
      The difference between a regional airliner and a mainline airliner is arbitrary and based on seat count. That seat count is determined by the mainlines union scope agreement.
      I’m not sure I agree that 100 seaters have been slow sellers globally. I just think the world-wide market outside the US may not have the size to support the plane types since you have to remove Russia and China from the market since they are building their own planes. That is to say if you can’t sell a bunch of the type in the US you can’t sustain a profitable airplane on the rest of the world alone.

    • CF says:

      I would agree with Mat, they haven’t been slow sellers globally. Take a look at Embraer, for example. There have already been 339 Embraer 190/195s built. That’s pretty good so far.

    • matt weber says:

      Just about all of the majors have ‘scope’ clauses that are either severely limit the number of 70-90 passenger aircraft that can be operated by a regioinal partner, or don’t allow them to operate these aircraft at all. Most Scope clauses don’t allow the Major US carriers to perate 100+ seat aircraft except with mainline crews. I believe there may still be a ‘carve out’ for a handful 100+ seaters at UA because one of their regional partners was operating BAe146’s at the time UA negotiated the scope clause. That number of aircraft is grandfathered in. My recollection is that it is on the order of 10 hulls.

      The end result of all of this is you get essentially regional aircraft capacity on the A318, and 737-600, but mainline labor rates. This makes them pretty unattractive. The basic problem is that it is very hard to draw a line in the sand when the A318 is a common type rating with the A319, A320 and A321. Same problem with the 737-600, common type rating with the -700, -800 and -900.

      The existence of the 737-500/600 isn’t really related to regional aircraft needs.
      The -500 was originally built for use in high/hot envirornments, and could be (and often was) equipped with 3C1 engines. That made the -500 into an outstanding aircraft for high/hot conditions.

      Relative to the -300 and -400 the -500 never sold especially well, and the same is true for the -600, although on the -700 and -800 you can address high hot issues much more easily. Just put the bigger engines on them, 7B26 and 7B27’s if you really need the performance.

      While there have been quite a few Embraer 190 and 195’s built, basically none are operated by either US legacy carriers or their regional partners at this point.
      With the current scope clauses, the operating economics just aren’t there.

      The history of 100 seat jet aircraft over the pas 30 years is pretty ugly. Neither Fokker or BAe are still in the civil aviation business.

  5. CP says:

    Interesting article re: DL’s facilities at JFK. They are, indeed, in need of an update, especially in light of DL’s desire to “own” New York, as they compare poorly to JetBlue’s and American’s terminals. That said, my experience as a frequent DL flier is that ATL is actually worse. The facility itself is nicer, but not much — huge lines for restrooms, overcrowded vendors, hallways that are often hard to walk through because lines for planes are spilling into them, etc. And the lines in the check-in lobby can be truly out of control (WORSE than JFK). Let’s hope DL models future facilities on DTW.

  6. I’m finding it funny that there is more discussion on the BNet articles here than on BNet. I wonder why? (perhaps the raft of ads between the end of the article and the comment form?)

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