CRJs on the way out at Horizon

[What Flaps?]

That is a surprise. I thought the 700's were a good money maker on the longer runs.

Friday April 25, 2008

Alaska Air Group, parent of Alaska Airlines and Horizon Air, reported a $35.9 million first-quarter loss that deepened from a $10.3 million deficit in the year-ago period.

Excluding the effect of mark-to-market fuel hedge accounting, AAG lost $36.3 million compared to $15.8 million last year. Chairman and CEO Bill Ayer said the company "is in a good position relative to the rest of the industry," but that "high fuel prices are eroding our profits and revenues are not increasing enough to offset them."

Among the "range of actions" the company will take will be to eliminate Horizon's fleet of 20 CRJ700s in addition to its already-announced decision to part with 12 remaining Q200s and transition to a fleet composed entirely of Q400s within two years. It will fly at least 48 of the type and still holds 20 purchase options with Bombardier.

"The Q400 is the best aircraft for the majority of our markets," Horizon President and CEO Jeff Pinneo said. "Simplifying to a single fleet of Q400s will result in increased fuel efficiency, plus substantially reduced costs for aircraft maintenance, spare parts and pilot and mechanic training." AAG said "some workforce reductions" will accompany the transition.

[THEICEMAN]

CRJ 700s are good money makers up to 70$ a barrel & probably a bit more for the CRJ-900. Making money on regional jets is extremely difficult these days. Brake even on the average CRJ-200 flight is somewhere in the 40 seat range.......ouch!

With oil prices so high, the Q400 is a better tool.

[PC12flyer]

Given that Horizon is making the transition to an all turbo-prop fleet and many of the American regional players are looking at needing to make drastic changes to stay alive as the American airline industry under goes a major facelift(i.e. mergermania).

The question becomes since Air Canada Jazz is flying around 57 of the CRJ 100/200's and 16 CRJ 705's when will Air Canada either force Jazz to modify the fleet into Dash 8-400's or replace a majority of the fuel inefficient CRJ's with more used Dash 8 100's and 300's. Or would Air Canada just change their business model slightly by adding larger aircraft (eg//EMB190's) to good routes thus keeping capacity but reducing frequency in order to save money.

It has been interesting to see that the Canadian carriers haven't seemed as effected by high fuel costs as their American counterparts but I think this will only be temporary. Air Canada is currently stuck in having to pay for 133 Jazz aircraft under the CPA. It will be very interesting to see what changes are made to ensure continued profitability as the two companies renegotiate the aircraft rates this year.

[ozguy]

First off, more Dash 100's is not going to happen. Why on earth would Jazz want to buy/lease outdated machines. Maybe the Q400's if the older Rj's get parked.

As for the Embrarers, its quite apparent as to why they are at Air Canada. One of the only mainline carriers in the world to operate a so called regional jet. However, a very smart tactic by ACPA. In the USA, the 50 set jet has become inefficient as the costs of fuel has risen with a slowing economy. The yields are shrinking everyday and the high frequency model is losing its appeal.

It all makes sense. Jazz loses the RJ 100/200's and we get more Dash 8's. What a surprise, AC gets to keep us right where they want us. Flying the noise makers through the crap below them. This is just a stab in the dark, but Canada normally follows behind the U.S., and it wouldnt shock me if AC started cutting Jazz's flying back and putting more E/190's on alot of routes that Jazz presently operates on the Rj. More orders for the e/190 and AC makes Jazz a truly regional airline. YVR-YYJ-YVR-YKA-YVR-YCD. yipee.

The day we see the embrarers is the day that we see palm trees in the Arctic from global warming.

[THEICEMAN]

It has been interesting to see that the Canadian carriers haven't seemed as effected by high fuel costs as their American counterparts but I think this will only be temporary.

Keep in mind that the U.S market is much more competitive then Canadian market. Although it's much bigger, there are too players right now.....

[rigpiggy]

Why not pick up the -200's from horizon, newer planes reduced parts pipeline due to engine commonality w/ the -300

[F-16]

ozguy,

Hmmm, more than just AC run the EMB's at mainline...

The 190/195 is a mainline aircraft - think 737-200/DC-9, etc.

[Pratt X 3]

The 190/195 is a mainline aircraft - think 737-200/DC-9, etc.

The DC-9 was the original Regional Jet!

[rudder]

ozguy,

Hmmm, more than just AC run the EMB's at mainline...

The 190/195 is a mainline aircraft - think 737-200/DC-9, etc.

Probably true but how about listing all of the mainline carriers still operating B737-200's or DC-9s...........I can come up with 1. And how many mainline carriers are operating EMB's in any configuration............just 1 - AC.

[rudder]

Given that Horizon is making the transition to an all turbo-prop fleet and many of the American regional players are looking at needing to make drastic changes to stay alive as the American airline industry under goes a major facelift(i.e. mergermania).

The question becomes since Air Canada Jazz is flying around 57 of the CRJ 100/200's and 16 CRJ 705's when will Air Canada either force Jazz to modify the fleet into Dash 8-400's or replace a majority of the fuel inefficient CRJ's with more used Dash 8 100's and 300's. Or would Air Canada just change their business model slightly by adding larger aircraft (eg//EMB190's) to good routes thus keeping capacity but reducing frequency in order to save money.

It has been interesting to see that the Canadian carriers haven't seemed as effected by high fuel costs as their American counterparts but I think this will only be temporary. Air Canada is currently stuck in having to pay for 133 Jazz aircraft under the CPA. It will be very interesting to see what changes are made to ensure continued profitability as the two companies renegotiate the aircraft rates this year.

Aircraft substitutions are a provision of the CPA - mutual consent. Jazz are still operating the CRJ100's because of an agreement reached between AC/ACE and GECAS. Having said that, only an idiot would not use $120BBL oil as a reason to revisit fleet composition.

As for aircraft rates, since fuel is not a 'controllable cost' it is not a function of the rate setting exercise.

[prop2jet]

Rudder: Jet Blue operates the E190 and I believe was in fact the launch customer for this type. As mentioned it will be a cold day in hell before anything the size of an E190 makes it's way under the CPA with AC.

PC12: The decision to operate the CRJ's is not that of Jazz but AC. AC "owns" or if you prefer controls the aircraft in question. Any fleet renewal at Jazz will be a function of what AC wants. I do not think that losing CRJ's at Jazz should be a big deal, they are obviously no longer cost effective. The Q400 or additional 705's would be a better arrangement.

In an ideal world, AC would drop the E175's, Jazz would get more 705's and Q400's.

[rudder]

Rudder: Jet Blue operates the E190 and I believe was in fact the launch customer for this type.

Jet Blue is an LCC not a 'legacy' carrier. Would you care to compare the cost structure at Jet Blue to AC on the EMB? FWIW I believe that the legacy carriers are waiting for either the C-series or a next-gen 100 seater from either Boeing or Airbus. Both still many years away.

[mighty mouse]

Rudder: Jet Blue operates the E190 and I believe was in fact the launch customer for this type. As mentioned it will be a cold day in hell before anything the size of an E190 makes it's way under the CPA with AC.

PC12: The decision to operate the CRJ's is not that of Jazz but AC. AC "owns" or if you prefer controls the aircraft in question. Any fleet renewal at Jazz will be a function of what AC wants. I do not think that losing CRJ's at Jazz should be a big deal, they are obviously no longer cost effective. The Q400 or additional 705's would be a better arrangement.

In an ideal world, AC would drop the E175's, Jazz would get more 705's and Q400's.

Almost I think. AC doesn't have many 175 compared to the 190s. holding onto the 175 gives AC the option to put a smaller plane on skinny routes when required.
The high frequency flights into the New York area are already far from full, but the New York passengers ... well, lets just say they are a bit more fussy about stepping into a turboprop no matter how good or quiet an airplane it is. The 175 is needed at AC.
Of course the next step is the 195. A little less range than the 190 but more seats. Once AC starts to return the 319s I think AC will start to acquire the 195 via their options.
Yes, the Q400 is an amazing plane, in the end I'd envision Jazz flying the Q400 only, all jets at AC, and NO CRJ anywhere.

Oh and... the small 787 will take over any of the 319s long leg flights.

[pointyertoes]

The high frequency flights into the New York area are already far from full, but the New York passengers ... well, lets just say they are a bit more fussy about stepping into a turboprop no matter how good or quiet an airplane it is. The 175 is needed at AC.
Of course the next step is the 195. A little less range than the 190 but more seats. Once AC starts to return the 319s I think AC will start to acquire the 195 via their options.
Yes, the Q400 is an amazing plane, in the end I'd envision Jazz flying the Q400 only, all jets at AC, and NO CRJ anywhere.

Judging by the great loads on Porter flights to EWR, there seems to be no reluctance to get into a turboprop for a quick and easy jaunt into the big apple.
... and if Jazz is going to fly Q400's, they'd better get in line. There's a 3+ year backlog on deliveries... and that's before Horizon announced their plans to switch to an all Q400 fleet.

[mighty mouse]

good point

[THEICEMAN]

... and if Jazz is going to fly Q400's, they'd better get in line. There's a 3+ year backlog on deliveries... and that's before Horizon announced their plans to switch to an all Q400 fleet.

Not quite......There are still a bunch of X-SAS Q400s on the market.
If they overhaul the landing gears, should it do the trick??? Would Jazz go for them??

[ozguy]

Foreget the dash a/c all together.

(Mightymouse), who posted JAZZ should only fly "q400's and NO CRJ'S." I have a better idea, how about Jazz fly all crj's 700/705/900/1000. Let the Dash 8's go to Georgian or CMA or Pasco....

I hate the prententious and self righteous attitude of some of the AC people. This industry is so sleasy sometimes. Professionalism you would think would be a given, however its few and far between. Big kids in a sandbox.

[365TAS]

Of the 27 ex-SAS Q400's...5 went to a swedish airfrieght company who took the aft bulkhead out and load the cargo through the aft-left cargo door, 5 went to an airline in the Philippines, a southamerican airline, I believe in Uruguay took a few and Flybe in England have either taken or are about to take most or the rest....Flybe was doing the major overhaul work for SAS so they know those machines. All of the remaining ex-SAS machines have been "updated" to current mod status including the "new and improved" landing gear, so realistically there's only a handful of available.

[737daytripper]

Rudder,

US Airways (a legacy carrier) operates the EMB190/5 at the mainline.

Foreget the dash a/c all together.

(Mightymouse), who posted JAZZ should only fly "q400's and NO CRJ'S." I have a better idea, how about Jazz fly all crj's 700/705/900/1000. Let the Dash 8's go to Georgian or CMA or Pasco....

I hate the prententious and self righteous attitude of some of the AC people. This industry is so sleasy sometimes. Professionalism you would think would be a given, however its few and far between. Big kids in a sandbox.

I've got an even better idea, why not cut Jazz out altogether and let georgian/CMA fly the crj, after they've done that for a while they can then have all the 320's 767,787, and the 777's. A race to the bottom where the cheapest labour wins and a 777 captain makes $75,000/year.

This BS has to stop somewhere and the line in the "sandbox" will be drawn with the 175/190.

[Localizer]

I believe that the legacy carriers are waiting for either the C-series or a next-gen 100 seater from either Boeing or Airbus. Both still many years away.

Ummmmm ... The Boeing 717? ... Is that the big Next-Gen 100 seater from Boeing that is still many years away? Because it is Next-Gen and 100 seats .. but its alreay in the past?

Rudder,

US Airways (a legacy carrier) operates the EMB190/5 at the mainline.

I don't really know if i'd call US Airways a "Legacy Carrier" anymore considering they are now owned by a LLC? Also those E190's they have came from the merger with America West ... So i'd say we're back to there being only one "Legacy Carrier" flying the E190 ... Oh and just for the sake of it Embraer on there website refers to the 175, 190 as Regional Jets.

I've got an even better idea, why not cut Jazz out altogether and let georgian/CMA fly the crj, after they've done that for a while they can then have all the 320's 767,787, and the 777's. A race to the bottom where the cheapest labour wins and a 777 captain makes $75,000/year.

This BS has to stop somewhere and the line in the "sandbox" will be drawn with the 175/190.

You're a bit of a moron .. but anyway .. this "line in the sandbox" your talking about?? .. It won't end with the 175 or the 190. It just won't end period. As for the race to the bottom? .. You only have yourself to blame ... because you're no different then anyone else ... no matter how much you'd like to think so! ..

Cheers ...

Loc

[rudder]

Ummmmm ... The Boeing 717? ... Is that the big Next-Gen 100 seater from Boeing that is still many years away? Because it is Next-Gen and 100 seats .. but its alreay in the past?


I don't really know if i'd call US Airways a "Legacy Carrier" anymore considering they are now owned by a LLC? Also those E190's they have came from the merger with America West ... So i'd say we're back to there being only one "Legacy Carrier" flying the E190 ... Oh and just for the sake of it Embraer on there website refers to the 175, 190 as Regional Jets.


Cheers ...

Loc

The B717 is not 'next gen'. AC looked at it in 2003 and rejected it for the same reasons as the A318 (too big and burns way too much fuel). 'Next gen' means B787 type technology/use of composites.

The EMB190 at LCC came from the former wholly-owned sub Mid Atlantic Airways. Great gig for $95/hr - top scale

[babybus]

I believe FINNAIR and LOT operate EMBRAERS with mainline as well as COPA.Just a few mainline major carriers that I could think of off the top of my head.

[tonysoprano]

Add Alitalia to that list as well. Oh well, so much for AC being the only one.

[Localizer]

The point continues to be the same .... More fighting .... thats all it really means in the end, and thats the part that sucks ... Oh well, right Tony.

[Dark Helmet]

What was the topic of this thread again? Something about Horizon getting Embraers, and Alitalia trading the RJ for 400's