Regional aircraft manufacturers are starting to focus more attention on mainline carriers, prompted by the narrowing cost differential between regional and major operators, and the need to circumvent restrictive scope clause agreements to find buyers for new generation 70- and 90-seat jets.
An analysis by Fairchild Dornier shows that mainline aircrew salaries are around twice that of regional airlines. This translates into a 13% difference in overall operating costs between a 70-seat regional jet (RJ) and a mainline aircraft over 1,110km (600nm). But with regional pilots, led by striking Comair crews, now demanding sizeable pay increases, this cost difference could narrow to 8%.
Higher costs will undermine the operating economics of smaller aircraft. Together with increased load factors, this could result in a shift away from smaller aircraft towards 70-seat or larger jets operated by mainline crews. "We're suggesting the economics are very reasonable to do that...the debate is now who deploys these aircraft," says Mike Miller, head of Fairchild Dornier market analysis.
This would also help get around pilot union scope clause agreements that place severe restrictions on most US regional carriers operating RJs over 45-50 seats. Sales to date of the Embraer ERJ-170, -190 and Fairchild 728/928JET have been to European carriers only. Mesa Airlines' recent Bombardier CRJ900 order makes it the only US carrier to buy anything larger than a 70-seater.
"The line between regionals and majors has been getting very blurred of late," acknowledges Steve Ridolphi, Bombardier regional aircraft president. "We don't just market to regionals, we have to talk to the majors and work with them to find opportunities. I believe we'll have to do that even more in the future," he adds.
Bombardier and Fairchild are both projecting a 20-year demand for around 4,000 RJs over 60 seats, but given that the USA represents the single largest regional market, these predictions hinge to a large extent on scope clause relaxation. Fairchild's 10-year forecast for the 70-seat sector alone varies by as much as 400 units depending on a number of factors led by scope.
The impact that higher pilot pay will have on the operating economics of smaller aircraft is being closely watched by Fairchild as it tries to decide, in the next two years, between expanding its regional family with the 55-seat 528JET, or launching a larger 110- to 115-seat aircraft. As the operating cost of 50-seaters increases, "an argument might be that major carriers may as well fly 70-seaters," says Barry Eccleston, Fairchild Dornier vice president.
Source: Flight International
