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.


39 Responses to The Rise of the 50 Seat Regional Jet

  1. CP says:

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

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

    • 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.

    • CF says:

      CP – Ugh, no way. Independence was not only paying a lot of money for those airplanes, but they also threw excess capacity into a market that didn’t need it. That was a recipe for disaster that nobody outside the walls of the corporate headquarters believed could work.

  2. Kjell says:

    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.

  3. SEAN says:

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

    • CF says:

      SEAN – Those are similar to the CRJ-700/900. I don’t know the operating costs, but I think it would be hard to get a truly accurate comparison anyway. Still, the idea should be the same.

  4. dan powers says:

    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)

  5. dan powers says:

    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…..

    • ancdude says:

      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.

  6. Matt Weber says:

    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 the cap costs on the 35-50 seat RJ’s are very high.
    What is killing them are the operating costs. Maintenance costs tend to go up as aircraft age, and fuel cost per ASM is pretty high to begin with. The CF34-3 engines on these aricraft have SFC’s that substantially worse than you will find on current CFM56 of IAE V2500’s (my guess is about 25% worse), and those engines are substantially worse than the 787/A350 engines.

    So I don’t see much of a business opportunity for these aircraft. Buying and owning them isn’t what is taking them out of service, it is the cost of flying them that is killing them.

    These aircraft may have potential life in the charter and specialized operator markets where the utilization is very low, much as the smaller air freight operator have older freighters because the utilization is low enough that capital costs rather than the operating cost dominate the total costs.

    As far as runway requirements. I don’t think it is a big deal. RJ’s have much higher thrust to weight ratio’s than the larger commercial aircraft, and that translates into very good short field capability. For example at MGTOW (and I don’t think these aircraft operate at MGTOW very often) the CRJ200ER needs 5800 feet of runway, under similar conditions a typical 737-300 at MGTOW will need 7000 feet. The Q400 needs about 4800 feet at MGTOW. So there aren’t a lot of places you can fly Q400 that you cannot fly a CRJ200 into.

    There are two things that make the Q400 very attractive. Compared to the CRJ200 it has substantially lower dead weight per seat (~500lbs/seat versus ~600lbs/seat), and that translates directly into lower fuel cost per ASM. The power required to push an aircraft through the sky goes up as the cube of speed, so a reduction in cruise speed from 400kt to 350kt is worth about a 35% savings in fuel.

    • CF says:

      Matt – Are you suggesting that the numbers are bad across the board? It wouldn’t surprise me, but that’s why I used them for comparison purposes. If they’re all “bad” then at least the difference between the aircraft should be relatively accurate. But if you’re suggesting that the numbers are skewed for one type versus another, then that would be a problem. But I have a hard time seeing why that would be the case.

      • Matt Weber says:

        I wouldn’t trust the cost figures any further than I could throw them. My experience is that different manufacturers skew the numbers in different ways. You really have to sift through the assumptions that are made in the cost figures and make corrections for reality and the actual mission to be flown. For example you hypothetical 300nm mission cost I’d bet contains unrealistic assumptions for utilization, taxi-in/taxi-out and delays. If one end of the mission is at a very busy airport, like EWR, the actual costs can approach a multiple of the estimates. I’ve been on relatively short haul flights that ended up waiting so long for takeoff that they had to go back to the gate to get more fuel!

        What is promised in the PR tends to be far more than what the guarantees in the contract provide for, and even then sometimes the aircraft never makes guarantees during its operating life. (A340-600 and RB211-524G and MD11 all fall into that category). The cost estimates are almost always based upon wishful thinking (best case scenario’s) the reality is never that good.

  7. Keith says:

    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 how many of their current flights can even be worked with a smaller RJ

    • CF says:

      Keith – I think they’re still just too expensive on a per seat basis for an ultra low cost carrier to make them work. The MD-80s could at least be packed with more than three times the number of people on a CRJ-200. Would be interesting if it could happen, but I’d be surprised.

  8. 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.

  9. Fred says:

    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?

    • CF says:

      Fred – Yeah, the ATR-72, from my understanding, is less expensive to operate but it’s also slower. I was trying to keep the comparison within the same family just for illustrative purposes, but you could look at the ATR-72 the same way. As for the -42, my understanding is that it’s kind of like a 737-600 or an A318. It’s a smaller plane but carries a ton of the weight from the bigger version.

  10. Eric says:

    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 towns that can not justify 50 to 70 seats will make room for the old-school indie/interline ‘commuter’ type ops (CapeAir, PenAir,Silver,Great Lakes).

  11. Mike says:

    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 traveling overseas. Emerging markets in Asia, South America, and Africa have already been buying RJs for years and would certainly scoop up a few more airframes if the acquisition costs became attractive enough.

    • Len says:

      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 RJs look positively huge when equipped with 10 seats in back instead of 50!
      Someone might have themselves a nice little refurb business here. I’ll take a cut of your first sale for giving you the idea!

  12. Eric C says:

    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 required to offset the revenue loss of the economy seat removed to create them? With the CRJ-200 being so nose-heavy and frequently weight limited it might make sense at some point to remove 4 seats and promote the next 5 rows to premium economy. With 32 seats forward of the wing and only 10 behind, if average passenger weights are increased again the plane will become untenably nose-heavy.

    • CF says:

      Eric C – I would think every airline would have a different answer on the prem econ question. But there are a lot of issues on the CRJ. I’m not sure how many you could remove and still get it to line up with the exits. But in general, it would be really tough to generate a premium for those seats if you’d using the airplane properly – on short flights.

  13. aerodawg says:

    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.

  14. JayB says:

    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?

    • CF says:

      JayB – I believe United does own the ERJs that ExpressJet flies. Remember, that used to be owned by Continental, and I think when they spun it off, they kept the ownership with the mainline airline. (Can anyone confirm?)

      • JayB says:

        According to Wikipedia (we all know they know everything, correctly), ExpressJet was divested from CO in 2002.

        Then, in 2011, SkyWest, through its subsidiary, Atlantic Southeast, purchased ExpressJet.

        Whatever. I think it would be helpful if you wrote a post on these “capacity-purchase agreements” through which companies like ExpressJet provide service for UA, DL, etc. Who decides what? Routes, size/type aircraft, frequencies, timings, decisions to operate/not to operate a particular flight, payments in advance/work delivered, etc.

        Regardless, thanks many times over for this terrific blog.

  15. Chuck says:

    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…

  16. 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 of the RJ craze) or upping frequencies between hubs to first and second tier cities to ridiculous levels using these small jets (and clogging up the skies and ATC) instead of mainline aircraft, in no small part as an end run around labor contracts.

    Not surprisingly, these were the two primary reasons passengers grew to viscerally hate smaller RJs. In other words, RJs became a problem to passengers when they became misused. Nobody with half a brain would complain about being on a CRJ from ATL-VPS.

    Can these planes still fly short routes to hubs from third tier spokes, if the (initial) price is right? Maybe. Can they be repurposed as economical alternatives to new private jets for general aviation, “plane share” programs, corporations and executives, as others have suggested here? Absolutely!

  17. Cook says:

    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 connections, is the crews that operate them. I’ve NOT bought the suggestion that all regional pilots are poorly qualified – and that is flatly wrong! Still, far too many of them are in that overworked, grossly underpaid class of pilots and heck yes, it **does** make a difference. While we will never see the most senior, Big Airplane pilots flying between Portland and Spokane or Portland and San Francisco, the few that have made their careers in regional flying are high-hour, very experienced pilots. The vast majority still see themselves ‘on the way up,’ as too often far to little experience, especially with ‘jet’ transports in difficult flying conditions. Change is in the works, but not nearly enough. And enough of that…
    I enjoy your blog and it is a must-read on days that you publish. I do not always agree with your views, but I value the quality of your work and greatly appreciate that your comments are usually extremely well-informed. Good information, well presented is difficult to resist. Thank you! -C.

    • chris says:

      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 hour straight’ attitude to help the profession be safer.

      • Eric C says:

        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 midwest thunderstorms back and forth six times each day. The average RJ pilot will get more landings in a day than a 777 guy will get in a month. If you required 5 years of airline time to upgrade on an RJ you’d find the experience level to be just fine. Of course Congress just mandated new-hires to meet the minimum quals to be Captains. Brilliant…

  18. 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 says:

      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 line is the only way to make money in revenue service with small jets is be able to extract an RPM yield that is well above the average. In today’s environment, that is very difficult to achieve, so lots of them are being parked.

  19. Dale says:

    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.

  20. Dale says:

    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 being \”in-house\” which (IMHO) should have made it less expensive for Republic. But while they broad-brushed the Frontier MKE RJ operation as a money pit, look at the missions they flew. Among the most frequent RJ routes was MKE-MSP, where the ERJ went up against AirTran 717\’s and Delta mainline. The local fare depression the market was brutal, and only a handful of people per flight were locals anyway. The bulk of passengers came from junk connecting markets like MSP-DCA, many of which are the same markets AirTran chased for junk connections with 717\’s via their MKE hub. The revenue in that market (and a few similar) were hideous yielding missions. On the flip side, some markets like MKE-CMH did not have LCC competition and were supported by significant local traffic paying fares in the $175-$200 range. But the RJ markets were all tagged as \”bad\” and it was the fault of the RJ\’s. I believe there\’s a niche for smaller aircraft RJ\’s and perhaps smaller props where enough local traffic exists to pay moderate fares, especially business travel markets. I\’d say the sweet spot is around 300-500 mile markets where driving is undesirably long, but connections are circuitous and time-consuming. It\’s not a slam dunk, and if there\’s no FF program tie in it could be especially tough to convince peopel to change their travel patterns. But I can\’t believe RJ\’s are the worthless junk they are described to be based on costs. The mission for profitable RJ use may not be massive. But it\’s not zero, either. And lower ownership costs can only help.

Leave a Reply

Please use your real name or nickname instead of your company name or keyword spam.