The Rise of the 50 Seat Regional Jet

I realize the title of this post probably has a lot of you scratching your heads. The 50 seat regional jet is dead, right? Delta and United are shedding them as quickly as possible in favor of larger 66-76 seat jets, and nobody seems to want the little ones. That, however, doesn’t mean the airplane is dead. It means that there is probably some opportunity looming.

We all probably know the story by now. Those 50 seat jets are more expensive to operate on a per seat basis, even though they operate in a single class configuration while the larger ones have First and Premium Economy making them less dense. For that reason, airlines all over have decided to park them.

Delta is dropping a couple hundred over the next few years from its regional fleet and United is set up to do the same. Clearly, nobody wants these airplanes. But when it comes to costs, it’s important to remember that there are two pieces to the equation. There are operating costs, which only vary if things like fuel prices vary, and then there are ownership costs. The latter is where the opportunity will present itself.

First, let’s talk about operating costs. These numbers can certainly vary. Everyone has different maintenance costs, and fuel prices go up and down all the time. They also schedule the airplanes differently and that can impact crew costs. But let’s try and normalize things using some standard data. It won’t be perfectly right for every airline, but it will at least be good for comparison purposes across airplanes.

Regional Operating Costs

I took some crew, fuel, maintenance, and landing fee costs from the manufacturer and divided them over the now-standard(ish) number of seats on each airplane. Everyone puts 37 seats on a Q200 and 50 seats on a CRJ-200. But for the other airplanes, I went with United’s and Delta’s seat counts since that seems to be becoming the industry norm. Naturally, if you’re an airline like US Airways where you put 79 seats on a CRJ-900, your per seat cost will come down.

It’s important to note that I’m using a 300 nautical mile trip to get these numbers. While 50-seaters have flown longer flights over the years, it’s increasingly rare to see them on long flights these days. The larger regionals with their First and Premium Economy cabins are much better suited to those flights. So if we stick with flights of roughly an hour, that should be the sweet spot for comparison purposes. If 50-seaters are going to make a comeback, that’s the kind of trip I’d expect because it either frees up larger regional to do longer flights or it replaces turboprops on the short flights.

As you can see, it’s no surprise that the small airplanes have lower total trip costs. But with fewer seats, they have higher costs per seat. And that’s why airlines have moved toward larger airplanes. A couple dollars per seat might not sound like a lot, but that 5 percent difference between a CRJ-200 and CRJ-700 can be the difference between profit and loss. And the 12 percent difference between a CRJ-200 and CRJ-900 is downright huge. This isn’t a high margin business, so even little differences matter. (And keep in mind that besides reducing costs per seat, the CRJ-700/900 can also generate more revenue with First Class and Premium Economy sections.)

Of course, you can see it’s the Q400 prop that really stands out here as being cheap to operate on a per seat basis. But on longer routes, the Q400 is going to be significantly slower than a jet. Even on a 478nm route like San Francisco to Portland, Alaska schedules its jets for flights of about 1h40m while the Q400s are scheduled at over 2 hours. On even longer routes where CRJ-700/900s operate today, the Q400 is just too slow. With a jet, you can get a lot more flying in a single day, and that matters a lot for ownership costs.

Really, it’s ownership costs here that are bound to make a big difference. A Q400 costs more than a CRJ-200. That might work out just fine if you have a route that can fill 70 seats on each flight, but on many of these routes, the demand simply isn’t there. On the flip side, you have the Q200 which is a smaller airplane. US Airways flies a bunch of Dash 8-100s and -200s (which are the earlier versions of the Q200) around its system. The costs per seat are higher, but the ownership costs have to be very low. But there’s a problem. These airplanes are hitting the end of their lives and there just aren’t new ones to be had. Bombardier only makes Q400 props these days and has no plans to restart production of smaller airplanes.

Where does that leave the airlines? Well, Delta and United clearly decided that the CRJ-200s were just too expensive. Some cities will be happy because they’ll get larger airplanes with First Class. But smaller cities aren’t going to be as lucky. It might very well mean that network carrier service just disappears.

With Delta and United shedding their fleets, however, that means there’s a huge glut of 50-seat jets on the market. And nobody wants them. When supply goes up and demand goes down, only one thing can happen – prices collapse. Now, it would seem to me that when ownership costs collapse, the opportunity to find a way to successfully use those 50-seaters re-emerges.

I don’t say that with glee. After all, the experience flying in those cramped tubes is not exactly pleasant. But as the smaller turboprops hit the end of their lives, those 50-seat jets are the next best option out there until somebody (anybody, please?) comes up with something better. But that won’t happen soon.

So, depending upon what oil does (huge spikes would be a problem), it wouldn’t surprise me if we see 50-seaters make a comeback. In the US, the leaves the combined US Airways/American as the only real potential growth target, but there are already a ton in the American fleet. It will be interesting to see how the US Airways influence begins to craft the new network and fleet plan. But other than that, the real opportunity may be elsewhere in the world. No matter what, it’s likely going to be hard to call this airplane dead. As ownership costs sink, opportunity knocks.

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39 Comments on "The Rise of the 50 Seat Regional Jet"

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CP
Guest

Sounds like an argument for the re-emergence of Independence Air :)

Nick Barnard
Member

Agreed.. I’m quite sure this is CF’s second April 1st post of the year.

Bill from DC
Guest

Ugh, I’m still incredibly bitter about FlyI since IAD was looking like it would be B6’s BOS before BOS. Thanks for nothing, Kerry Skeen and Atlantic Coast Airways. A few short years later, IAD was back to being a UA/Star stranglehold with some extremely minor WN service, a few FL flights and basic hub service from the other airlines.

Bill from DC
Guest

Oh yeah, and very minor B6 service (at least we still have the OAK and LGB x-cons but I will always lament the loss of the LAS flight).

Kjell
Guest

Another consideration in the Q400 vs. Regional jet debate: I haven’t found any good figures with a quick search, but I would guess a Q400 would neet a lot less runway to take off and land.

SEAN
Guest

How does the Ember 170/ 75/ 90 play in this landscape if at all.

dan powers
Guest

the demand for the crj-200 is to convert them to corporate jets…new luxury interior and new engines…some companies in canada are doing this…for a low cost you get a very nice capable corporate jet…of which the market demand is good ( do not forget that is where the crj-200 came from….a corporate jet)

dan powers
Guest

at one time horizon-alaska had a large number of 70 seat CRJ-700’s….their block times compared to the DHC-8-400 were just about the same…but passengers prefered the more ample Q400, the bean counters prefered the lower operating cost of the Q400….guess what happened…..

umbelifer
Member

One other factor is noise. For example Paine Field (Everett, WA) neighbors grudginly approved Horizon service so long as it was done with the Q400. Flight service is limited to Q400. I imagine there are other places where noise is a factor beyond cost in plane choice.

matt weber
Member
Several comments. First of all, I have little confidence in the cost figures from the manufacturers. They tend to be quite optimistic in a number of areas. I worked through this issue extensively on both the A350 and 787 claims, and concluded that neither had much basis in reality. If really want good numbers, go to the DOT form 41 filings, or the data subsequently published in Aviation Daily from McGraw-Hill (subscriptions are pretty dear however). Aviation Week used to periodically publish the operating cost data, but I don’t know if they still do. At this point I don’t think… Read more »
Keith
Guest
Could an airline like Allegiant make them work? We’ve seen they are willing to take on higher cost to operate aircraft if they can get them on the cheap (MD-80, A319 etc). They could fly to even smaller markets than they do now, or could supplement a 1x or 2x weekly mainline with another 1x or 2x smaller craft. I know that starts to sound more like a traditional airline, but I do wonder if it could work. Does Allegiant lose out when travelers don’t want to stay exactly a week or exactly two weeks somewhere? The only problem is… Read more »
David SF eastbay
Member

Their still could be a market out there for even a new airline to start up if they could get dirt cheap 50-seaters. There are still some thin routes the 50-seater would be suited for.

Fred
Guest

What about the ATR-42/72? They aren’t as popular as the Q400 in the US, but the numbers should be pretty similar as the Q400 and ATR-72 are similar aircraft.
Then there’s the ATR-42, which is a 40-50 seat aircraft that is newer and more efficient than 50 seat RJs, so could that be a potential replacement for the older Dash 8-100/200 aircraft?

Eric A.
Member
Nice breakdown Cranky, and Matt Weber makes an excellent addendum. IMHO the fear of smaller cities loosing service completely is a bit overblown. Communities like Medford, Rochester MN,Lexington, New Bern, etc. provide needed traffic to sustain hubs. As Cranky pointed out with the MEM experience; once you hack smaller city feed the ability to sustain things like AMS becomes impossible. Will they loose frequency? You betcha….but I dont think many will disappear altogether. The 50 seater will not disappear completely so some will be kept to connect placed like Williston to the rest of the country. On the flipside, the… Read more »
Mike
Guest
I think you’ll see a lot of them wind up at charter companies or overseas. If a charter company can get one used for under $2 mil then throw a corporate interior/conversion in it for another 2-3mil it works out to be pretty attractive compared to buying a typical large corporate jet. High time airframes also don’t matter as much since they’d probably be used under 1000 hours a year anyway (more likely only 400-700). On top of that parts are plentiful and there’s a glut of trained pilots/mechanics in the market. I could also see a lot of them… Read more »
Len
Guest
Agreed. Take it a step further. Let’s say you are Mega-Corp Inc and are in the market for a nice super mid-range business jet. Maybe a Citation Soveriegn or similar offering from Bombardier or Gulfstream. You’re talking millions. Tens of millions. Easy. Now, how about someone buy some RJs at 2 mill a pop. Spend a few mill upgrading the interior, modernizing the avionics and putting new hot sections in those engines. You’re looking at one heck of a biz jet, built like a tank compared to standard biz jets, out the door for under $10 million. Believe me, those… Read more »
Bill from DC
Guest

Agreed 100%

christophe.bottega
Member

Strange world when you spend more on upgrading the inside than on the plane and its flying equipment itself !!!

Eric C
Guest
There are several large fleets of 50 seat RJs that have been parked for years. If there were a business case in acquiring them it should have already manifested itself. While some regionals have picked up a few desert birds, I think the reality is that most planes have expensive engine overhauls that make them less economically attractive. I suspect we’ll see current operators swap the overhauled engines off their high-cycle frames and put them on lower-cycle frames from the desert, should demand warrant. On a related note, Cranky do you have any idea how many premium economy seats are… Read more »
aerodawg
Guest

Please go tell United that 50 seaters are a bad idea on long flights. Every time I try to book United headed west from HSV, the first option always seems to be a CRJ-200 headed to Denver. Thanks but no thanks.

CRJ-200s should be banned as cruel and unusual punishment.

jaybru
Member

Cranky, UA is “shedding” what? Owned aircraft? Does UA actually own the regional aircraft?

UA’s website lists the split between its mainline and the regional aircraft fleet as 699 mainline, 554 regional, with the regional, broken out 32/350/172, greater than 50-seat, 50-seat, and less-than 50-seat, respectively.

Then, it lists its regional contractors: Cape Air, Chautauqua, CommutAir, ExpressJet, GoJet, Mesa, Republic, Shuttle America, Silver, SkyWest, and Trans States.

What percentage of the regional aircraft does UA own as compared with the percentage owned by the regional contractors? Does UA own any of these contractors?

Chuck
Guest

I suppose this could be good news for Air Wisconsin since that is all they fly and their contract with US is ending within a couple of years…

Bill from DC
Guest
I’ll side with Cranky on the contrarian position here. What was old is new again. Remember that the early 40-50 seat RJ’s were initially greeted as liberators by passengers in second and third tier spokes that had become grudgingly accustomed to long flights to hubs on ATRs, Dashes and Brasilias that sounded like busted blenders stuck on frappe while taking two and a half freaking hours to fly from GNV to CLT. Nobody asked us when they took these planes and instead started flying 1,200 mile thin routes out of CVG (just remember the insane comair terminal at the height… Read more »
Cook
Member
Thanks. A quirky but fair analysis. I have no personal objection to the smallest/slowest of these airplanes for trips of up to 90 minutes. They serve a multi-purpose market and one that varies by Market/Region – a LOT. For example, in the NE region, smaller airplanes ‘tend’ toward regional, A-to-B flights. In the West and Northwest (excluding SoCal), they tend to serve as feeders for other flights. (Easy math as the distances in the West are far greater and the flight density far less.) My only serious reservation about these smaller jets and turbo-props – on point-to-point service or feeder… Read more »
chris
Guest
I agree with Cook. It seems to me that the first seat for a commercial airline pilot should be the right seat in 777. Then ‘progress’ through right seat 737, then right seat RJ, to left seat RJ, left 737, and then left 777 to finish your career if you desire. We need to get young pilots with senior pilots to pass knowledge, and quit making the entry level position a difficult place for two early career pilots. Why not old guys? I know you have ‘waited’ patiently, but doctors eventually gave up their ‘because I had to work 30… Read more »
Eric C
Guest
FWIW, the experience level at the regionals is extraordinarily high right now. The age 65 rule has meant that nearly everyone has been in their current seat for the last 5 years, and really before that there was growth but little attrition since just after 9/11. For the regional carriers that have been around for that time (ie, not Gojet) you’ll find most Captains with 10-15 years of airline experience. Chris, while there’s plenty to learn on 14 hour trans-oceanic flights I’m sure, the experience piles up much faster for the folks who have to cross the same line of… Read more »
Red
Member

I wounder if we will see any CRJ-200 being made into cargo planes if it works for old 737s should work for CRJ-200s if used correctly

matt weber
Member
The turboprops all have substantially lower dead weight per seat, and lower cruise speeds than the jet 40-50 seaters. The economics on the 40-50 seat jets are pretty miserable because of the operating costs. The main difference in value between specific 50 seaters is probably the hours, and in particular, engine hours. I.E. how long until you either need a D-Check, and how long you reach what is considered to TBO on the engine. My estimate is the PW engine on the ERJ is even worse than the CF34 or the CRJ as far as fuel burn goes. The bottom… Read more »
Dale
Guest

In regards to the AA/US merger I think it would be great for the CRJ-200 to replace the “flying lawnmowers” on routes such as LGA-ROA (not sure if that is still operating) and CLT-ROA and perhaps other similar routes as well.

Dale
Guest
What I find so very maddening about the whole typical RJ blather (esp 50-seat RJ) is that the planes are tagged as \”bad\” because all the focus is on the cost side…nothing about the revenue side. No plane is a winner or loser based on cost alone. It succeeds or fails based on cost versus revenue, and the higher cost a plane is, the narrower the scope of profitable operation is. But that\’s different than being \”bad\”. A classice close-to-home example was Frontier at their defunct MKE hub. They lost their shirts on the RJ operations in spite of Chautauqua… Read more »
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