LCC RJ Question.

[bmibaby.com]

I just have another general question about the low cost airline market, with regards to aircraft types that the operators used.

I was wondering whether a start-up low fares airline that started up out of a smaller airport, I don't know say Paris Beauvais or somewhere, where there was quite a big, but a smaller catchment area than other airports, could make money by using smaller aircraft.

Debonair did not do well with the 100-seat 146-200s, but I am wondering is that just due to the economics and performance of that type?

The ERJ-145, Dash 8-400 or even the B717? Do these have good economics for a low cost regional airline?

How does flybe. make money with such small aircraft?

Thanks for all helps.

[goatbusters]

Regional jets result in higher unit costs which makes it hard to stay 'low cost'. Competitors can just undercut your fares with larger aircraft. BE found the CRJ to be an ecnomical nightmare.

[bmibaby.com]

I can see that being a problem with the smaller regional jets like the ERJs and CRJs, but what about the larger regional aircraft like the new 70/75 seat ERJ-170/175 series of aircraft or the 100-seat Boeing 717.

I refer simply to routes where it is impossible to fill up or operate multiple daily sectors with a 150/180 seat airliner.

Is it possible to make money for a low-cost airline with a 70/100 seat airliner? Because surely there must be markets where the 737/320 aircraft are too big?

[Golf Charlie Charlie]

Well, AirTran does pretty well in the US with 717s. And yet the point previously made about economies of scale is important - AirTran have a lot of them and also operated them concurrently with identically sized DC-9-30s.

Yet even AirTran are having to trade up to the 737 (-800s, I think) because they want to do coast-to-coast flights, as the 717 doesn't have the range. That is less of a factor in western Europe, where sector lengths are well within the 717's range. But even at the margin in Europe (Luton/Athens or Belfast/Faro), maybe 717s would be up against it ?? There's also the concern that Boeing may can the 717 line at any time.

So which ever way you hack it - in the European context anyway - it seems that 6-abreast 737s or A319/320s are best the overall economic solution for this type of business.

Apart from AirTran, all other low-cost operators in the US seem to use 6-abreast 737s/Airbuses, eg. JetBlue, Southwest, Frontier, ATA, America West.

[bmibaby.com]

I was just thinking that about the range factor for the smaller aircraft.

I do see that there would be problems with operating smaller aircraft for a no frills airline, because of operating costs.

I just asked because I feel that there are markets that the larger aircraft just could not do with frequent enough schedules.

But unless its proven wrong, this way of operating wont work ...

[brabazon]

I think you'll find that Ryanair do very well at filling their aircraft on routes which would not be expected to have sufficient demand. It's the lure of cheap fares that attracts the passengers and then it's cheaper to run a 737-800 than a CRJ or whatever.