Re: Air Canada plans to buy up to 105 regional jets

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Back to the good 'ol RJ discussion.

The customers that fly a route will demand either price or frequency,
or sometimes both.

Once  you deal with that dilema, and then only fill 50 seats per
departure, a A319 costs too much. Fuel, labour, landing fees etc.

Even if fuel was cheap, and the plane was free (i.e. CP's 737-200s),
it's still CHEAPER to buy a new plane and go from there.

It's like the guy down the street who has that fully paid for clunker
of a car. You are going to put more fuel/oil/service into it than
buying a new Hyundai.

In the case of AC, they still can't compete on price (even after labour
concessions, they are still more expensive to operate than WestJet or
Jetsgo). So, with their remaining overhead (i.e. hubs in YYZ/YUL/YVR),
their landing rights around the world, they are only left with
frequency. Hence the desire for RJs.

Just like United, US Airways, Delta and even Jet Blue and Air Tran.

Matthew

On Sunday, June 22, 2003, at 02:40  AM, Michael A. Burris wrote:

> Alireza / All:
>
> Good point.  But what makes Air Canada think that
> spending there money like this is a wise thing to do
> when they are in bankruptcy?
>
> The airlines call it business, I guess.  Man, it makes
> better sense to me to pick up planes from the desert
> or lease for a while, until one gets back on their
> feet. (financially)
>
> Mike Burris
> Cambridge, Mass
>
>
> --- Alireza Alivandivafa <DEmocrat2n@xxxxxxx> wrote:
>> What makes these airlines think that buying small
>> RJs is the solution.  The
>> 100 seat jets are ok, as they offer good economics,
>> but the 50 and 70 seat
>> planes seem a bit small, especially to support the
>> low fares people want.
>

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