Industry

Industry

  • AIR NOSTRUM WINS THE DISPATCH RELIABILITY AWARD ONCE AGAIN

    AIR NOSTRUM WINS THE DISPATCH RELIABILITY AWARD ONCE AGAIN

    Air Nostrum Dispatch Reliability Award

    Spanish airline achieves highest dispatch reliability score amongst all CRJ operators in Europe, the Middle East, and Africa.

    Air Nostrum, a world-class CRJ operator and leading European regional airline, has once again received the Dispatch Reliability Award—achieving the highest reliability score in 2021 amongst all CRJ operators in their region. With over 75,000 annual flights and 5.2 million passengers, Air Nostrum is Spain’s leading regional airline.

    WORLDWIDE RECOGNITION FOR ACHIEVING EXCELLENCE

    Established in 2009, the Dispatch Reliability Award recognizes worldwide operators of CRJ Series regional jets who have achieved industry-leading dispatch reliability rates of 99% or better. To date, Air Nostrum has won the award 10 times for the European region for both the CRJ100/200 and the CRJ700/900/1000 categories. This achievement makes Air Nostrum stand out as a regional champion that has continually led the way for the European regional aviation market by consistently exceeding expectations.

    THE IMPORTANCE OF DISPATCH RELIABILITY

    Dispatch reliability is a critical factor in aircraft operation. If the aircraft is not available, even for a short period, the consequences can be significant. Safely and efficiently transporting 99% or more of an airline’s passengers in a year is nothing short of incredible. When considering candidates for the Dispatch Reliability Award, MHIRJ focuses on product performance, airline support, and customer focus. These three pillars support the passenger experience and define how successful an airline is at transporting passengers from point A to point B.

     

    WINGSPAN - AIR NOSTRUM WINS DISPATCH RELIABILITY AWARD

     

    HOW AWARD WINNERS ARE IDENTIFIED

    To identify award winners, the aircraft dispatch reliability of airlines is monitored through a data system called FRACAS (Failure Reporting, Analysis, and Corrective Action System). This reporting system is used by aviation companies to detect, assess, and correct failures in flight dispatchstreamlining flight processes through adaptive correction. MHIRJ has its own FRACAS database through which CRJ Series aircraft in service around the globe are monitored, allowing for accurate and consistent comparative data on all CRJ Series aircraft in service.

    In addition to recognizing operators for their success, the award showcases airlines that achieve world-class performance reliability, and strives to promote a commitment to safety, consistency, and best practices.

    AIR NOSTRUM GROWS WITH CRJ AIRCRAFT

    The CRJ aircraft has been instrumental in Air Nostrum’s growth. Between 2016 and 2018, the airline tripled its CRJ1000 fleet, going from 10 to 30 high-performing aircraft that consistently achieve a Dispatch Reliability rate of 99.5% in service. Today, with a total of 37 CRJ aircraft, Air Nostrum has the largest CRJ fleet in the EMEA region.

    IN THE COMPANY OF EXCELLENCE

    Given to regional airlines around the globe, a few of the past recipients of the award include Air Wisconsin with 99.2% dispatch reliability, China Express Airlines with 99.8%, Jazz Aviation with 99.0%, and of course Air Nostrum with 99.55% dispatch reliability. This distinguished group of regional airlines, as well as many others not mentioned here, have consistently outdone themselves with the reliable service they provide to millions of passengers each year.

     

    WINGSPAN - AIR NOSTRUM WINS DISPATCH RELIABILITY AWARD

     

     

    Air Nostrum Receives Dispatch Reliability Award

    Carlos Bertomeu, Executive President at Air Nostrum, receives the Dispatch Reliability Award on behalf of the airline at the ERA 2022 in Portugal. Joining him is Bob Duffield (left)Head of Aftermarket Customer and Product Support at MHIRJ, along with Amel Belkhamsa (right)Head of Aftermarket Commercial Services & Spare Parts Operations at MHIRJ.

    2 MIN.

    AIR NOSTRUM WINS THE DISPATCH RELIABILITY AWARD ONCE AGAIN

    AIR NOSTRUM WINS THE DISPATCH RELIABILITY AWARD ONCE AGAIN
    Air Nostrum Dispatch Reliability Award

    Spanish airline achieves highest dispatch reliability score amongst all CRJ operators in Europe, the Middle East, and Africa.

    Air Nostrum, a world-class CRJ operator and leading European regional airline, has once again received the Dispatch Reliability Award—achieving the highest reliability score in 2021 amongst all CRJ operators in their region. With over 75,000 annual flights and 5.2 million passengers, Air Nostrum is Spain’s leading regional airline.

    WORLDWIDE RECOGNITION FOR ACHIEVING EXCELLENCE

    Established in 2009, the Dispatch Reliability Award recognizes worldwide operators of CRJ Series regional jets who have achieved industry-leading dispatch reliability rates of 99% or better. To date, Air Nostrum has won the award 10 times for the European region for both the CRJ100/200 and the CRJ700/900/1000 categories. This achievement makes Air Nostrum stand out as a regional champion that has continually led the way for the European regional aviation market by consistently exceeding expectations.

    THE IMPORTANCE OF DISPATCH RELIABILITY

    Dispatch reliability is a critical factor in aircraft operation. If the aircraft is not available, even for a short period, the consequences can be significant. Safely and efficiently transporting 99% or more of an airline’s passengers in a year is nothing short of incredible. When considering candidates for the Dispatch Reliability Award, MHIRJ focuses on product performance, airline support, and customer focus. These three pillars support the passenger experience and define how successful an airline is at transporting passengers from point A to point B.

     

    WINGSPAN - AIR NOSTRUM WINS DISPATCH RELIABILITY AWARD

     

    HOW AWARD WINNERS ARE IDENTIFIED

    To identify award winners, the aircraft dispatch reliability of airlines is monitored through a data system called FRACAS (Failure Reporting, Analysis, and Corrective Action System). This reporting system is used by aviation companies to detect, assess, and correct failures in flight dispatchstreamlining flight processes through adaptive correction. MHIRJ has its own FRACAS database through which CRJ Series aircraft in service around the globe are monitored, allowing for accurate and consistent comparative data on all CRJ Series aircraft in service.

    In addition to recognizing operators for their success, the award showcases airlines that achieve world-class performance reliability, and strives to promote a commitment to safety, consistency, and best practices.

    AIR NOSTRUM GROWS WITH CRJ AIRCRAFT

    The CRJ aircraft has been instrumental in Air Nostrum’s growth. Between 2016 and 2018, the airline tripled its CRJ1000 fleet, going from 10 to 30 high-performing aircraft that consistently achieve a Dispatch Reliability rate of 99.5% in service. Today, with a total of 37 CRJ aircraft, Air Nostrum has the largest CRJ fleet in the EMEA region.

    IN THE COMPANY OF EXCELLENCE

    Given to regional airlines around the globe, a few of the past recipients of the award include Air Wisconsin with 99.2% dispatch reliability, China Express Airlines with 99.8%, Jazz Aviation with 99.0%, and of course Air Nostrum with 99.55% dispatch reliability. This distinguished group of regional airlines, as well as many others not mentioned here, have consistently outdone themselves with the reliable service they provide to millions of passengers each year.

     

    WINGSPAN - AIR NOSTRUM WINS DISPATCH RELIABILITY AWARD

     

     

    Air Nostrum Receives Dispatch Reliability Award

    Carlos Bertomeu, Executive President at Air Nostrum, receives the Dispatch Reliability Award on behalf of the airline at the ERA 2022 in Portugal. Joining him is Bob Duffield (left)Head of Aftermarket Customer and Product Support at MHIRJ, along with Amel Belkhamsa (right)Head of Aftermarket Commercial Services & Spare Parts Operations at MHIRJ.

    2 MIN.
  • THE RETURN OF MRO AMERICAS, AN INTERVIEW WITH LEE ANN SHAY - AVIATION WEEK NETWORK

    THE RETURN OF MRO AMERICAS, AN INTERVIEW WITH LEE ANN SHAY - AVIATION WEEK NETWORK

    return  of mro americaas

    This year's MRO Americas exhibition saw a great turnout with hundreds of exhibitors. It gave Stephanie Bento, Senior Brand Manager for MHIRJ, the opportunity to sit down with Lee Ann Shay, Executive Editor MRO and Business Aviation, Aviation Week Network, to discuss her insights on the trending topic of recruiting labour technicians to the industry. 

    Stephanie Bento: A hot topic in the industry right now is attracting talented maintenance technicians. And here to talk to us about that is Lee Ann Shay for Aviation Week. So, Lee Ann, from your perspective and your conversations in the MRO space, tell us, what are you seeing as a trend with this issue of recruiting labour technicians?

    Lee Ann Shay: Labour shortage is being exasperated, especially as the airlines continue to recover. And there’s a lot of activity going around but it is having a direct impact for some MROs, but it’s also affecting the supply chain. It’s not just maintenance technicians, there’s a labour shortage around the world that’s affecting all aspects of the MRO industry. So, it is affecting turnaround time. 

     

    wingspan

     

    Stephanie Bento: We were really excited to be at this show post-COVID, meeting with our customers and our vendors. What do you take away from this year’s show?

    Lee Ann Shay: It’s been a great MRO Americas. I mean they all are! But we are almost back to our pre-pandemic levels, but I think one of the over-arching themes was just that people are so happy to be back meeting in person and transacting business. We had over 800 exhibitors here. You know we had the commercial conference, MALMS, the Aerospace Maintenance Competition, record teams there. So just lots of really good enthusiasm. We’re very happy with it!

    4 MIN.

    THE RETURN OF MRO AMERICAS, AN INTERVIEW WITH LEE ANN SHAY - AVIATION WEEK NETWORK

    THE RETURN OF MRO AMERICAS, AN INTERVIEW WITH LEE ANN SHAY - AVIATION WEEK NETWORK
    return  of mro americaas

    This year's MRO Americas exhibition saw a great turnout with hundreds of exhibitors. It gave Stephanie Bento, Senior Brand Manager for MHIRJ, the opportunity to sit down with Lee Ann Shay, Executive Editor MRO and Business Aviation, Aviation Week Network, to discuss her insights on the trending topic of recruiting labour technicians to the industry. 

    Stephanie Bento: A hot topic in the industry right now is attracting talented maintenance technicians. And here to talk to us about that is Lee Ann Shay for Aviation Week. So, Lee Ann, from your perspective and your conversations in the MRO space, tell us, what are you seeing as a trend with this issue of recruiting labour technicians?

    Lee Ann Shay: Labour shortage is being exasperated, especially as the airlines continue to recover. And there’s a lot of activity going around but it is having a direct impact for some MROs, but it’s also affecting the supply chain. It’s not just maintenance technicians, there’s a labour shortage around the world that’s affecting all aspects of the MRO industry. So, it is affecting turnaround time. 

     

    wingspan

     

    Stephanie Bento: We were really excited to be at this show post-COVID, meeting with our customers and our vendors. What do you take away from this year’s show?

    Lee Ann Shay: It’s been a great MRO Americas. I mean they all are! But we are almost back to our pre-pandemic levels, but I think one of the over-arching themes was just that people are so happy to be back meeting in person and transacting business. We had over 800 exhibitors here. You know we had the commercial conference, MALMS, the Aerospace Maintenance Competition, record teams there. So just lots of really good enthusiasm. We’re very happy with it!

    4 MIN.
  • PILOT SHORTAGE: RELIEVING THE PRESSURE

    PILOT SHORTAGE: RELIEVING THE PRESSURE

    WINGSPAN - Pilot Shortage - Hero Photo

    It’s no secret that the airline industry is currently facing a panoply of challenges. Recovering from the effects of the pandemic, rising fuel prices, infrastructure limitations, and labour shortages are all contributing to the impacts that are being felt nationwide and across the globe. While some of these challenges can be more easily rectified, one of the more complex and pressing issues affecting our industry is the current pilot shortage.

    The pilot shortage has been an ever-growing issue for a number of years. The 2008 financial crisis saw many industries take a hit—including aviation. It hindered new pilots from taking on the costly burden of flight school, causing a slowdown in new pilots. Fast forward to current times and the issue only became more acute during the pandemic.

    With early retirement offers from the airlines and a quick recovery in the air traffic market that was impossible to react to in a timely way, the demand for pilots quickly bounced back while the supply failed to keep up with the demand. In fact, 2020 and 2021 were among the lowest years for new issuances of ATP licenses in the last decade, causing a shortfall of approximately 6,000 pilots in the market.

    wingspan

     

    FEELING THE IMPACT

    Both leisure and business travel have been greatly affected, but one of the most detrimental results of the shortage has been the cancellation of regional flights, impacting smaller communities around the United States. With major airlines hiring away pilots from regional airlines, routes have been cut from the network, grounding the operation of many regional aircraft impacting flying to the smallest communities in the country.

    “During the early days of the pandemic, many of the large airlines were forced to ground their fleets. As a result, they offered early retirements to some of their senior pilots, and a number of their pilots took that, further exacerbating the problem we are facing now. Faced with the unfolding crisis of the pandemic, it was a reasonable plan. Now that flying is ramping back up again, many regional pilots have switched over to fly at the mainline airlines, subsequently causing an unforeseen shortage amongst regional carriers. If changes aren’t made, there certainly could be long-term impacts from this,” explained Ross Mitchell, Vice President, Strategy, Business Development, Marketing, Communications and Business Operations at MHIRJ.

    Regional airlines provide a key service in connecting these small communities to the larger air service network, as well as providing them with essential goods and services. Since 66% of airports with scheduled passenger service receive their only service from regional airlines, the impact is being felt nationwide and even causing the closure of some smaller airports.

    The knock-on effects of this are being felt throughout the regional industry. For perspective, the numbers speak for themselves. The Regional Airline Association conducted a study which suggests that regional airlines provide more than 1 million jobs, with $41 billion in wages and tax revenue for a total economic impact of $153 billion, with the shortage cutting into this greatly.

    TIME IS OF THE ESSENCE

    Exasperating the issue even more is the fact that 47% of Part 121 pilots must retire at the required age of 65 in the next 15 years, and another 13% in the next five years, while the supply of new pilots is not sufficient to replace these retiring pilots. And the recovery solution is not that simple. Currently, the FAA requires pilots to have at least 1,500 flight hours logged before they are eligible to work for an airline, once again limiting the speed at which pilots can enter the workforce. While absolutely respecting the need for ample experience and the highest level of safety training, reducing the number of hours would have a significant effect on expediting the recovery process.

    WHAT ELSE CAN BE DONE?

    Beyond lobbying to reduce the number of hours needed to safely become a licensed airline pilot, there are several other short-term and long-term solutions that can help alleviate the shortage. But this problem doesn’t just involve the airlines. It’s a systemic issue that’s affecting a number of industry players including airports, MROs, and OEMs. An interruption of service to passengers is a collective issue. MHIRJ has taken a stand in raising the alarms and acting as a serious partner in creating change within the industry.

    WHAT ELSE CAN BE DONE

     

    “All of the suppliers to the regional industry, the service providers, the maintenance and repair shops, the airports—everyone needs to be part of the solution to make sure this workforce issue is solved” says Mitchell on how greater impact can be made when forces gather to build momentum and have a stronger voice.

    The heaviest lifting needs to be done on the legislative side to create effective changes, which is why MHIRJ is working in support of the Flight Education Access Act, led by Senator Tammy Baldwin. A review of current requirements for pilot qualification standards needs to be made in order to provide proficiency-based structured training pathways.

    In the short term, extending the required retirement age for pilots from 65 to 67 will help fill the gap, as will expanding visa programs for foreign-trained pilots. In the longer term, efforts need to go into building appeal. Aviation needs to be promoted at all levels as an attractive and worthwhile profession for students to consider. Considering the cost of flight school, better funding for pilot training through access to student loan programs will work towards increasing enrolment.

    While these solutions will take time, effort, patience, and unwavering dedication, we’ll continue working hard to advocate for change in order to help build a stronger, more reliable future in aviation for all.

     

    Watch our video to learn more about the impact of pilot shortage.

     

    wingspan

     

    MRO Americas 2022 interview with Ross Mitchell, Vice President, Corporate Shared Services at MHIRJ and Stephanie Bento, Senior Brand Manager.

     

    6 MIN.

    PILOT SHORTAGE: RELIEVING THE PRESSURE

    PILOT SHORTAGE: RELIEVING THE PRESSURE
    WINGSPAN - Pilot Shortage - Hero Photo

    It’s no secret that the airline industry is currently facing a panoply of challenges. Recovering from the effects of the pandemic, rising fuel prices, infrastructure limitations, and labour shortages are all contributing to the impacts that are being felt nationwide and across the globe. While some of these challenges can be more easily rectified, one of the more complex and pressing issues affecting our industry is the current pilot shortage.

    The pilot shortage has been an ever-growing issue for a number of years. The 2008 financial crisis saw many industries take a hit—including aviation. It hindered new pilots from taking on the costly burden of flight school, causing a slowdown in new pilots. Fast forward to current times and the issue only became more acute during the pandemic.

    With early retirement offers from the airlines and a quick recovery in the air traffic market that was impossible to react to in a timely way, the demand for pilots quickly bounced back while the supply failed to keep up with the demand. In fact, 2020 and 2021 were among the lowest years for new issuances of ATP licenses in the last decade, causing a shortfall of approximately 6,000 pilots in the market.

    wingspan

     

    FEELING THE IMPACT

    Both leisure and business travel have been greatly affected, but one of the most detrimental results of the shortage has been the cancellation of regional flights, impacting smaller communities around the United States. With major airlines hiring away pilots from regional airlines, routes have been cut from the network, grounding the operation of many regional aircraft impacting flying to the smallest communities in the country.

    “During the early days of the pandemic, many of the large airlines were forced to ground their fleets. As a result, they offered early retirements to some of their senior pilots, and a number of their pilots took that, further exacerbating the problem we are facing now. Faced with the unfolding crisis of the pandemic, it was a reasonable plan. Now that flying is ramping back up again, many regional pilots have switched over to fly at the mainline airlines, subsequently causing an unforeseen shortage amongst regional carriers. If changes aren’t made, there certainly could be long-term impacts from this,” explained Ross Mitchell, Vice President, Strategy, Business Development, Marketing, Communications and Business Operations at MHIRJ.

    Regional airlines provide a key service in connecting these small communities to the larger air service network, as well as providing them with essential goods and services. Since 66% of airports with scheduled passenger service receive their only service from regional airlines, the impact is being felt nationwide and even causing the closure of some smaller airports.

    The knock-on effects of this are being felt throughout the regional industry. For perspective, the numbers speak for themselves. The Regional Airline Association conducted a study which suggests that regional airlines provide more than 1 million jobs, with $41 billion in wages and tax revenue for a total economic impact of $153 billion, with the shortage cutting into this greatly.

    TIME IS OF THE ESSENCE

    Exasperating the issue even more is the fact that 47% of Part 121 pilots must retire at the required age of 65 in the next 15 years, and another 13% in the next five years, while the supply of new pilots is not sufficient to replace these retiring pilots. And the recovery solution is not that simple. Currently, the FAA requires pilots to have at least 1,500 flight hours logged before they are eligible to work for an airline, once again limiting the speed at which pilots can enter the workforce. While absolutely respecting the need for ample experience and the highest level of safety training, reducing the number of hours would have a significant effect on expediting the recovery process.

    WHAT ELSE CAN BE DONE?

    Beyond lobbying to reduce the number of hours needed to safely become a licensed airline pilot, there are several other short-term and long-term solutions that can help alleviate the shortage. But this problem doesn’t just involve the airlines. It’s a systemic issue that’s affecting a number of industry players including airports, MROs, and OEMs. An interruption of service to passengers is a collective issue. MHIRJ has taken a stand in raising the alarms and acting as a serious partner in creating change within the industry.

    WHAT ELSE CAN BE DONE

     

    “All of the suppliers to the regional industry, the service providers, the maintenance and repair shops, the airports—everyone needs to be part of the solution to make sure this workforce issue is solved” says Mitchell on how greater impact can be made when forces gather to build momentum and have a stronger voice.

    The heaviest lifting needs to be done on the legislative side to create effective changes, which is why MHIRJ is working in support of the Flight Education Access Act, led by Senator Tammy Baldwin. A review of current requirements for pilot qualification standards needs to be made in order to provide proficiency-based structured training pathways.

    In the short term, extending the required retirement age for pilots from 65 to 67 will help fill the gap, as will expanding visa programs for foreign-trained pilots. In the longer term, efforts need to go into building appeal. Aviation needs to be promoted at all levels as an attractive and worthwhile profession for students to consider. Considering the cost of flight school, better funding for pilot training through access to student loan programs will work towards increasing enrolment.

    While these solutions will take time, effort, patience, and unwavering dedication, we’ll continue working hard to advocate for change in order to help build a stronger, more reliable future in aviation for all.

     

    Watch our video to learn more about the impact of pilot shortage.

     

    wingspan

     

    MRO Americas 2022 interview with Ross Mitchell, Vice President, Corporate Shared Services at MHIRJ and Stephanie Bento, Senior Brand Manager.

     

    6 MIN.
  • FLYING GREEN INTO THE FUTURE

    FLYING GREEN INTO THE FUTURE

    FLYING GREEN INTO THE FUTURE

    Emerging technologies are reshaping flight. Thanks to blockchain technology, augmented reality, robotics, artificial intelligence, amongst a few, aviation is growing in a new direction and is more exciting than ever. Like many industries critical to modern life, the aviation sector is focusing its efforts on leveraging technology to reduce carbon emissions to net-zero. The ultimate goal is to become “green” by 2050.

    BRINGING NEW IDEAS IN SUSTAINABILITY TO THE MARKET

    At MHIRJ, we are continuing that journey by helping innovators get their ideas to the market and be at the forefront of innovative and sustainable developments. Nowhere is this commitment more evident than in MHIRJ’s agreement with ZeroAvia, a leading innovator in hydrogen-electric propulsion for aviation. Together, MHIRJ and ZeroAvia will design and develop zero-emission propulsion technology for regional jet applications.

    “ZeroAvia is positioning themselves to become a next-generation engine manufacturer. We hope they are going to have the biggest success in selling this engine to every aircraft OEM that is compatible with the engine,” said Elio Ruggi, Senior Vice-President, Head of Aircraft Development and Quality at MHIRJ.

    “We have over 30 years of experience in the regional market, and we know what an aircraft requires, and the full product life cycle requirements. So, our support is going to be both technical and operational in nature.” MHIRJ will provide design and engineering services toward the certification of the engines, as well as advisory services to evaluate the feasibility of a green retrofit program for regional aircraft.

    “We believe that in the future almost every aircraft in the world will be powered by hydrogen-electric engines, simply because it is the most viable and scalable method for eliminating carbon and to cut the other harmful emissions from the aviation sector,” said Val Miftakhov, CEO, ZeroAvia. “This collaboration with MHIRJ is a significant milestone for us and the aviation industry.”

    we are going to

     

    “We’re going to help ZeroAvia design and certify a right size engine that’s not too big, too heavy, or too expensive, but optimized just right for flight, weight, and operating costs.”

    Hydrogen is 3 times better than jet fuel in terms of energy per kilogram. The most efficient way to convert that energy into propulsion, hydrogen-electric engines represent the best approach for aircraft propulsion.

    LEVERAGING MHIRJ’S UNIQUE EXPERTISE AND EXPERIENCE

    Bringing this to market with MHIRJ is an ideal fit. At the MHIRJ Aerospace Engineering Center, project teams are being set up to leverage their vast set of skills and expertise. That includes bringing multiple aircraft to certification and valuable experience in CAA/FAA/ EASA jurisdictions. ZeroAvia is looking to partner with MHIRJ across the board to bring their innovation to market and to certify the airframes; not only for regional jet airframes, but for other applications in addition to CRJ series aircraft. As a result, this marks a crucial step in ZeroAvia’s progress and entry into a wider market. A recognized leader in zero-emission aircraft propulsion focused on hydrogen-electric power, ZeroAvia has completed more than 35 test flights of a Piper M-class six-seat aircraft using its hydrogen fuel cell powertrain. Currently, it is working to convert a larger 19-seat Dornier 228 aircraft. These powertrains require lower fuel and maintenance costs, and zero emissions that enable sustainable and scalable aviation.

     A FASTER FLIGHT PATH TO THE FUTURE

    By replacing conventional engines with hydrogen-electric powertrains, MHIRJ and ZeroAvia will enable scalable and sustainable aviation. Retrofitting existing airframes with hydrogen-electric engines provides the best opportunity to quickly get the technology to market. This approach simplifies regulatory issues while a clean sheet design would take more time for certification. In addition, hydrogen fuel cell propulsion suggests no theoretical/ physical limits to prevent us from progressing towards the largest aircraft types that exist today.

     CREATING A VERTICALLY INTEGRATED FUEL ECOSYSTEM

    Supply chain logistics are key to this innovative solution; therefore, a hydrogen fuel infrastructure will need to be put in place at strategic hubs. ZeroAvia has already worked with partners to develop blueprints on the right airport locations and has commitments from ten operators to fly their engines when ready. The predictability of scheduled aircraft makes it easier to create a fuel infrastructure as the routes are already defined. In the US, there are approximately 150 airports that drive 97% of passenger travel. Contrast that with consumer cars in the US where there are upwards of 400,000 fueling locations.

    A MORE ENJOYABLE FLIGHT EXPERIENCE

    Aside from the environmental benefits hydrogen-electric powertrains offer, this solution brings new benefits to the passenger flying experience. For example, aircraft noise levels will be much lower as well as vibrations, especially in regional aircraft. And there will be no smell of jet fuel.

    What’s more, because hydrogen fuel cells enable an abundant source of electricity onboard aircraft, this technology will bring in more new electrified onboard amenities.

    Creating a more sustainable future is a concept that is shared throughout MHIRJ “At MHIRJ we are working with propulsion innovators to ensure that we are at the forefront of such developments and can design solutions to move the world forward,” says Hiro Yamamoto, President and CEO of MHIRJ. “Regional aircraft are key to keeping smaller communities and regions connected and are also more able to exploit the new technologies on the horizon than larger aircraft and, therefore this is a logical place for this development to begin and we are proud to be a part of this innovative solution.”

    wingspan

     

    See how the industry can best prepare to lead aviation into a new era of zero-emission flight and how hydrogen is poised to enter service in the coming years. Watch our video featuring Margaret Haswell, Business Development and Maintenance Engineering Manager at MHIRJ. Taken from the 2021 Hydrogen Aviation Summit, Margaret speaks on the challenges as well as opportunities this technology offers and MHIRJ’s role in unlocking zero-emission flight in collaboration with ZeroAvia.

    zeroavia

    6 MIN.

    FLYING GREEN INTO THE FUTURE

    FLYING GREEN INTO THE FUTURE
    FLYING GREEN INTO THE FUTURE

    Emerging technologies are reshaping flight. Thanks to blockchain technology, augmented reality, robotics, artificial intelligence, amongst a few, aviation is growing in a new direction and is more exciting than ever. Like many industries critical to modern life, the aviation sector is focusing its efforts on leveraging technology to reduce carbon emissions to net-zero. The ultimate goal is to become “green” by 2050.

    BRINGING NEW IDEAS IN SUSTAINABILITY TO THE MARKET

    At MHIRJ, we are continuing that journey by helping innovators get their ideas to the market and be at the forefront of innovative and sustainable developments. Nowhere is this commitment more evident than in MHIRJ’s agreement with ZeroAvia, a leading innovator in hydrogen-electric propulsion for aviation. Together, MHIRJ and ZeroAvia will design and develop zero-emission propulsion technology for regional jet applications.

    “ZeroAvia is positioning themselves to become a next-generation engine manufacturer. We hope they are going to have the biggest success in selling this engine to every aircraft OEM that is compatible with the engine,” said Elio Ruggi, Senior Vice-President, Head of Aircraft Development and Quality at MHIRJ.

    “We have over 30 years of experience in the regional market, and we know what an aircraft requires, and the full product life cycle requirements. So, our support is going to be both technical and operational in nature.” MHIRJ will provide design and engineering services toward the certification of the engines, as well as advisory services to evaluate the feasibility of a green retrofit program for regional aircraft.

    “We believe that in the future almost every aircraft in the world will be powered by hydrogen-electric engines, simply because it is the most viable and scalable method for eliminating carbon and to cut the other harmful emissions from the aviation sector,” said Val Miftakhov, CEO, ZeroAvia. “This collaboration with MHIRJ is a significant milestone for us and the aviation industry.”

    we are going to

     

    “We’re going to help ZeroAvia design and certify a right size engine that’s not too big, too heavy, or too expensive, but optimized just right for flight, weight, and operating costs.”

    Hydrogen is 3 times better than jet fuel in terms of energy per kilogram. The most efficient way to convert that energy into propulsion, hydrogen-electric engines represent the best approach for aircraft propulsion.

    LEVERAGING MHIRJ’S UNIQUE EXPERTISE AND EXPERIENCE

    Bringing this to market with MHIRJ is an ideal fit. At the MHIRJ Aerospace Engineering Center, project teams are being set up to leverage their vast set of skills and expertise. That includes bringing multiple aircraft to certification and valuable experience in CAA/FAA/ EASA jurisdictions. ZeroAvia is looking to partner with MHIRJ across the board to bring their innovation to market and to certify the airframes; not only for regional jet airframes, but for other applications in addition to CRJ series aircraft. As a result, this marks a crucial step in ZeroAvia’s progress and entry into a wider market. A recognized leader in zero-emission aircraft propulsion focused on hydrogen-electric power, ZeroAvia has completed more than 35 test flights of a Piper M-class six-seat aircraft using its hydrogen fuel cell powertrain. Currently, it is working to convert a larger 19-seat Dornier 228 aircraft. These powertrains require lower fuel and maintenance costs, and zero emissions that enable sustainable and scalable aviation.

     A FASTER FLIGHT PATH TO THE FUTURE

    By replacing conventional engines with hydrogen-electric powertrains, MHIRJ and ZeroAvia will enable scalable and sustainable aviation. Retrofitting existing airframes with hydrogen-electric engines provides the best opportunity to quickly get the technology to market. This approach simplifies regulatory issues while a clean sheet design would take more time for certification. In addition, hydrogen fuel cell propulsion suggests no theoretical/ physical limits to prevent us from progressing towards the largest aircraft types that exist today.

     CREATING A VERTICALLY INTEGRATED FUEL ECOSYSTEM

    Supply chain logistics are key to this innovative solution; therefore, a hydrogen fuel infrastructure will need to be put in place at strategic hubs. ZeroAvia has already worked with partners to develop blueprints on the right airport locations and has commitments from ten operators to fly their engines when ready. The predictability of scheduled aircraft makes it easier to create a fuel infrastructure as the routes are already defined. In the US, there are approximately 150 airports that drive 97% of passenger travel. Contrast that with consumer cars in the US where there are upwards of 400,000 fueling locations.

    A MORE ENJOYABLE FLIGHT EXPERIENCE

    Aside from the environmental benefits hydrogen-electric powertrains offer, this solution brings new benefits to the passenger flying experience. For example, aircraft noise levels will be much lower as well as vibrations, especially in regional aircraft. And there will be no smell of jet fuel.

    What’s more, because hydrogen fuel cells enable an abundant source of electricity onboard aircraft, this technology will bring in more new electrified onboard amenities.

    Creating a more sustainable future is a concept that is shared throughout MHIRJ “At MHIRJ we are working with propulsion innovators to ensure that we are at the forefront of such developments and can design solutions to move the world forward,” says Hiro Yamamoto, President and CEO of MHIRJ. “Regional aircraft are key to keeping smaller communities and regions connected and are also more able to exploit the new technologies on the horizon than larger aircraft and, therefore this is a logical place for this development to begin and we are proud to be a part of this innovative solution.”

    wingspan

     

    See how the industry can best prepare to lead aviation into a new era of zero-emission flight and how hydrogen is poised to enter service in the coming years. Watch our video featuring Margaret Haswell, Business Development and Maintenance Engineering Manager at MHIRJ. Taken from the 2021 Hydrogen Aviation Summit, Margaret speaks on the challenges as well as opportunities this technology offers and MHIRJ’s role in unlocking zero-emission flight in collaboration with ZeroAvia.

    zeroavia

    6 MIN.
  • ON A PATH TO GROWTH WITH GOJET

    ON A PATH TO GROWTH WITH GOJET

    ON A PATH TO GROWTH WITH GOJET

    The world of aviation is undergoing unprecedented change. But with change comes opportunity. No regional airline illustrates the benefits of embracing change like GoJet Airlines, which has reinvented itself through its association with United Airlines and MHIRJ. Headquartered in St. Louis, Missouri, GoJet flies to over 50 destinations in the U.S. throughout the East Coast and Midwest, proudly flying for United Express. As the current sole operator of the revolutionary CRJ550 aircraft, GoJet is at the forefront of redefining the passenger experience by offering the world’s only two-cabin 50-seat regional aircraft, specifically designed for business and leisure travelers who want true first-class seating. This new aircraft version elevates the travel experience for passengers, providing GoJet with an exciting path forward to growth in partnership with United Airlines. 

    Contributed by: Pierre Gagnon, Director, Business Development, Aftermarket Commercial Services

    Why customers love flying the CRJ550:

    • More legroom per seat than any other 50-seat aircraft.
    • Passengers can bring one roller bag onboard.
    • United Wi-Fi available in-flight.

    “Our customers are telling us they love flying the CRJ550 and we’re excited to continue growing our fleet and our long-standing relationship with GoJet.” Sarah Murphy, United’s Senior Vice-President of United Express.

    Established in late 2004 by Trans States Holdings, GoJet initially flew United Express branded flights out of United Airlines’s Chicago O’Hare hub to replace departing United Express carrier Atlantic Coast Airlines. In 2005, GoJet took delivery of their first CRJ700 aircraft and began scheduled passenger services. When the CRJ550 concept was developed in 2018, United Airlines quickly recognized the potential of this aircraft for their regional network and gave GoJet the go-ahead for 54 aircraft. GoJet will acquire an additional 20 aircraft bringing the total fleet to 74 CRJ550 aircraft flying for United Airlines by fall of 2022.

    ON A PATH TO GROWTH WITH


     

     
     

    A WHOLE NEW WAY TO GO

    A first-of-its-kind, the CRJ550 is the only premium 50-seater in the regional market with first-class seating. The CRJ550 offers passengers many enhancements not available on larger regional jets flying in the marketplace today. For example, it has more overall legroom per seat than any other 50-seat aircraft flown by a U.S. airline as well as more overall legroom for premium customers than any regional aircraft in the market today, space for every customer to bring a roller bag on board, a self-serve refreshment center, and the ability to stay connected while in flight with United Wi-Fi. 

    This new direction in fleet strategy has been incredibly positive for GoJet and United Airlines. “Feedback from customers has been fantastic,” said Rick Leach, President and Chief Executive Officer of GoJet Airlines. “United’s decision to add more of these aircraft so quickly after the initial product launch is indicative of their long-term commitment to both the CRJ550 platform and to GoJet. We look forward to growing this exciting program with United.” 

    ACCOLADES FROM PASSENGERS AND PARTNERS

    As a testament to its growth potential for GoJet, the CRJ550 has one of the highest passenger acceptance ratings in United Airlines’ entire fleet. “Our customers are telling us they love flying the CRJ550 and we’re excited to continue growing our fleet and our long-standing relationship with GoJet,” said Sarah Murphy, United’s Senior Vice-President of United Express. “We congratulate GoJet on the success of the CRJ550 program and we look forward to offering travelers more opportunities to experience this aircraft.” 

    A WIN/WIN/WIN SITUATION 

    With its unique market position as the only operator of CRJ550 aircraft, GoJet is coming out of the downturn stronger and equipped to grow market share. It is truly a win/ win/win situation for GoJet, United Airlines and MHIRJ. Together, GoJet, United and MHIRJ are connecting passengers to their destinations via a new class of regional travel that customers value, putting all three partners on a path to growth.

    4 MIN.

    ON A PATH TO GROWTH WITH GOJET

    ON A PATH TO GROWTH WITH GOJET
    ON A PATH TO GROWTH WITH GOJET

    The world of aviation is undergoing unprecedented change. But with change comes opportunity. No regional airline illustrates the benefits of embracing change like GoJet Airlines, which has reinvented itself through its association with United Airlines and MHIRJ. Headquartered in St. Louis, Missouri, GoJet flies to over 50 destinations in the U.S. throughout the East Coast and Midwest, proudly flying for United Express. As the current sole operator of the revolutionary CRJ550 aircraft, GoJet is at the forefront of redefining the passenger experience by offering the world’s only two-cabin 50-seat regional aircraft, specifically designed for business and leisure travelers who want true first-class seating. This new aircraft version elevates the travel experience for passengers, providing GoJet with an exciting path forward to growth in partnership with United Airlines. 

    Contributed by: Pierre Gagnon, Director, Business Development, Aftermarket Commercial Services

    Why customers love flying the CRJ550:

    • More legroom per seat than any other 50-seat aircraft.
    • Passengers can bring one roller bag onboard.
    • United Wi-Fi available in-flight.

    “Our customers are telling us they love flying the CRJ550 and we’re excited to continue growing our fleet and our long-standing relationship with GoJet.” Sarah Murphy, United’s Senior Vice-President of United Express.

    Established in late 2004 by Trans States Holdings, GoJet initially flew United Express branded flights out of United Airlines’s Chicago O’Hare hub to replace departing United Express carrier Atlantic Coast Airlines. In 2005, GoJet took delivery of their first CRJ700 aircraft and began scheduled passenger services. When the CRJ550 concept was developed in 2018, United Airlines quickly recognized the potential of this aircraft for their regional network and gave GoJet the go-ahead for 54 aircraft. GoJet will acquire an additional 20 aircraft bringing the total fleet to 74 CRJ550 aircraft flying for United Airlines by fall of 2022.

    ON A PATH TO GROWTH WITH


     

     
     

    A WHOLE NEW WAY TO GO

    A first-of-its-kind, the CRJ550 is the only premium 50-seater in the regional market with first-class seating. The CRJ550 offers passengers many enhancements not available on larger regional jets flying in the marketplace today. For example, it has more overall legroom per seat than any other 50-seat aircraft flown by a U.S. airline as well as more overall legroom for premium customers than any regional aircraft in the market today, space for every customer to bring a roller bag on board, a self-serve refreshment center, and the ability to stay connected while in flight with United Wi-Fi. 

    This new direction in fleet strategy has been incredibly positive for GoJet and United Airlines. “Feedback from customers has been fantastic,” said Rick Leach, President and Chief Executive Officer of GoJet Airlines. “United’s decision to add more of these aircraft so quickly after the initial product launch is indicative of their long-term commitment to both the CRJ550 platform and to GoJet. We look forward to growing this exciting program with United.” 

    ACCOLADES FROM PASSENGERS AND PARTNERS

    As a testament to its growth potential for GoJet, the CRJ550 has one of the highest passenger acceptance ratings in United Airlines’ entire fleet. “Our customers are telling us they love flying the CRJ550 and we’re excited to continue growing our fleet and our long-standing relationship with GoJet,” said Sarah Murphy, United’s Senior Vice-President of United Express. “We congratulate GoJet on the success of the CRJ550 program and we look forward to offering travelers more opportunities to experience this aircraft.” 

    A WIN/WIN/WIN SITUATION 

    With its unique market position as the only operator of CRJ550 aircraft, GoJet is coming out of the downturn stronger and equipped to grow market share. It is truly a win/ win/win situation for GoJet, United Airlines and MHIRJ. Together, GoJet, United and MHIRJ are connecting passengers to their destinations via a new class of regional travel that customers value, putting all three partners on a path to growth.

    4 MIN.
  • THE COMPETITIVE ADVANTAGE OF REGIONAL AIRCRAFT

    THE COMPETITIVE ADVANTAGE OF REGIONAL AIRCRAFT

    THE COMPETITIVE ADVANTAGE OF REGIONAL AIRCRAFT

    2017 was a different time. Barely five years past, the intense competition for the business passenger seems a story for a bygone era.

    In the world’s largest market, the fight amongst the U.S. network airlines was for the high yield passenger. Increasing connectivity brought new corporate accounts, higher fares, and increased profitability. There was no better place to find these advantages than in the regional networks.

    REGIONAL CONNECTIVITY SURVIVES AND THRIVES

    In April of 2017, United Airlines made a decisive move to increase its competitive network by adding 65 50-seat CRJ200 aircraft from Air Wisconsin to its United Express fleet. Contrary to the long-expected sunset of the 50-seat jet, the ability for the aircraft to increase connectivity through United’s Chicago and Washington D.C. hubs proved critical in the fight for the business passenger. The fight for the business passenger, network connectivity, and higher fares reached a fever pitch.Of course, March 2020 changed everything. The idea of optimizing revenue on full aircraft gave way to empty seats and a scramble to save costs. Even as the first signs of the recovery started to appear in Summer 2020, the business traveler was nowhere to be found. Leisure travel ruled the skies, and the airline networks adjusted quickly to accommodate. Today, regional connectivity continues, even without the highly sought-for business passenger who so demanded the service.

    It is through the lens of connectivity, and the competitive advantages which were once so highly sought, that we assess the impact of the regional aircraft through the drastic changes of the pandemic.

    Beyond the fact that regional aviation was able to maintain connectivity during the most difficult times, and even though we are in an early recovery phase today, we now look to the future, and how regional aviation is expected to, once again, become the competitive differentiator in the United States.

    courtney-1

     

    A NEW NICHE FOR REGIONAL FLEETS

    For airlines around the world, the objective of Spring 2020 was brutally simple - survive. As air travel plummeted 97% in April, entire fleets of aircraft were parked in a bid to save precious cash. As larger mainline aircraft which remained active found themselves flying with mostly-empty seats, the protective role of the country’s regional aviation network became apparent

    Despite the unprecedented drop in travel demand, the air transportation system in the United States maintained its connective integrity, driven largely by a regional fleet. Yet, as critical as this essential service of maintaining connectivity amid a crisis may be, it is not the core role of regional aviation. Regional aviation exists to compound airline presence, to be a competitive instrument, and most importantly, to be profitable.

    Even as the demographic of the U.S. domestic traveler has become increasingly leisure-oriented, so too have the networks shifted to larger aircraft in order to connect many vacationers with the few vacationheavy destinations. Tourist destinations such as Florida, Colorado, and Las Vegas saw robust recoveries, driven by larger jets full of passengers paying low fares. Meanwhile, the high-yield business traveler remains elusive.

    For a regional industry so dependent upon the value brought from connectivity rather than simply discounted fares, the slow return of the business traveler might seem concerning. However, no evidence suggests that ultra-low business travel is here to stay.

    Leisure demand has recovered, fulfilling much of the demand present prior to the pandemic. However, the long-awaited real recovery is expected to be business and international demand-driven, where the greatest opportunity for regrowth remains.

    Analysis of market concentration strongly suggests that the regional aircraft in the United States will once again signal a strong competitive advantage, just as it did in 2017.

    This anticipated growth in business and international demand is highly dependent upon network connectivity - precisely the competitive advantage brought by a robust regional network.

    THE COMPETITIVE ADVANTAGE OF REGIONAL AIRCRAFT

    courtney-2

    The breadth of an airline’s network can be best described by its market concentration. The higher the market concentration, the more passengers will be required to find alternative airports to complete their travel. This becomes critical for small and medium-sized communities where larger aircraft may fly to the vacation hot-spot; however, any other travel requires a drive to the larger airport.As such, the competitive nature of a market to capture the business traveler for an airline can be illustrated by market concentration. To measure concentration, we use the Herfindahl-Herschman Index (HHI), a long-standing metric comparing the market size to the market breadth. In the context of air travel, a higher HHI indicates passenger traffic with few options, whereas a low HHI indicates strong market breadth and a diversified network.Whencomparing HHI values of actual itineraries flown during Q2 2021, the competitive nature of the regional network stands out. In markets where regional jets were a part of the itinerary, market concentration was one-fourth of the itineraries operated by narrowbody aircraft. This staggering increase in market breadth the regional aircraft illustrates just how competitive a full network can be, once travel expands beyond the few leisure destinations.

    courtney-3

    MORE PASSENGERS RELYING ON REGIONAL AVIATION

    Over the course of the pandemic, the market concentration for narrowbody aircraft has further increased, reflecting the increasing leisure demand and fewer connecting options. Compared to 2019, narrowbody networks have increased network concentration by 2.7%.

    Conversely, the reliance on the regional aircraft to maintain a competitive network has increased. Market concentration of itineraries involving regional aircraft fell by almost 9% since 2019, showing how much more passengers rely on regional aviation to travel to all but the most popular destinations.

    PREPARING FOR BUSINESS TRAVEL GROWTH

    Today, with the recovery in the high-value business and international traveler just beginning, this competitive network advantage the regional airlines bring has not yet been realized. Further, a pilot shortage impacting the regional airlines is putting pressure on available capacity to maintain this low concentration and high market breadth.

    These two factors are working together to create a shift toward the leisure passengers who have returned, at the risk of not being competitive for the business travelers who are about to return.The result is difficult to see from within a currently depressed business travel environment, however, the airlines which maintain and grow their regional networks today will be in a position to corner the business travel market tomorrow.

    Just as network connectivity was paramount in 2017, so too will it be paramount as the recovery continues. Market concentration for larger aircraft continues to increase, but it is up to the regional networks, which have increasingly been relied upon, to maintain a connection to the world’s air transportation system. The competitive advantages are only set to continue.

    We are happy to bring you this special contribution from Courtney Miller, Founder and Managing Partner of Visual Approach. Courtney has over 20 years of aviation analysis experience. A particularly talented storyteller, he finds insights and trends in the aircraft, network, and financial segments of the industry and presents them in an intuitive way. His data and analysis can be seen regularly in The Air Current and Cranky Network Weekly. You can contact him at: courtney@visualapproach.io, and learn more about Visual Approach Analytics at: https://visualapproach.io.

     

    Contributor: Courtney Miller, Founder and Managing Partner of Visual Approach

    8 MIN.

    THE COMPETITIVE ADVANTAGE OF REGIONAL AIRCRAFT

    THE COMPETITIVE ADVANTAGE OF REGIONAL AIRCRAFT
    THE COMPETITIVE ADVANTAGE OF REGIONAL AIRCRAFT

    2017 was a different time. Barely five years past, the intense competition for the business passenger seems a story for a bygone era.

    In the world’s largest market, the fight amongst the U.S. network airlines was for the high yield passenger. Increasing connectivity brought new corporate accounts, higher fares, and increased profitability. There was no better place to find these advantages than in the regional networks.

    REGIONAL CONNECTIVITY SURVIVES AND THRIVES

    In April of 2017, United Airlines made a decisive move to increase its competitive network by adding 65 50-seat CRJ200 aircraft from Air Wisconsin to its United Express fleet. Contrary to the long-expected sunset of the 50-seat jet, the ability for the aircraft to increase connectivity through United’s Chicago and Washington D.C. hubs proved critical in the fight for the business passenger. The fight for the business passenger, network connectivity, and higher fares reached a fever pitch.Of course, March 2020 changed everything. The idea of optimizing revenue on full aircraft gave way to empty seats and a scramble to save costs. Even as the first signs of the recovery started to appear in Summer 2020, the business traveler was nowhere to be found. Leisure travel ruled the skies, and the airline networks adjusted quickly to accommodate. Today, regional connectivity continues, even without the highly sought-for business passenger who so demanded the service.

    It is through the lens of connectivity, and the competitive advantages which were once so highly sought, that we assess the impact of the regional aircraft through the drastic changes of the pandemic.

    Beyond the fact that regional aviation was able to maintain connectivity during the most difficult times, and even though we are in an early recovery phase today, we now look to the future, and how regional aviation is expected to, once again, become the competitive differentiator in the United States.

    courtney-1

     

    A NEW NICHE FOR REGIONAL FLEETS

    For airlines around the world, the objective of Spring 2020 was brutally simple - survive. As air travel plummeted 97% in April, entire fleets of aircraft were parked in a bid to save precious cash. As larger mainline aircraft which remained active found themselves flying with mostly-empty seats, the protective role of the country’s regional aviation network became apparent

    Despite the unprecedented drop in travel demand, the air transportation system in the United States maintained its connective integrity, driven largely by a regional fleet. Yet, as critical as this essential service of maintaining connectivity amid a crisis may be, it is not the core role of regional aviation. Regional aviation exists to compound airline presence, to be a competitive instrument, and most importantly, to be profitable.

    Even as the demographic of the U.S. domestic traveler has become increasingly leisure-oriented, so too have the networks shifted to larger aircraft in order to connect many vacationers with the few vacationheavy destinations. Tourist destinations such as Florida, Colorado, and Las Vegas saw robust recoveries, driven by larger jets full of passengers paying low fares. Meanwhile, the high-yield business traveler remains elusive.

    For a regional industry so dependent upon the value brought from connectivity rather than simply discounted fares, the slow return of the business traveler might seem concerning. However, no evidence suggests that ultra-low business travel is here to stay.

    Leisure demand has recovered, fulfilling much of the demand present prior to the pandemic. However, the long-awaited real recovery is expected to be business and international demand-driven, where the greatest opportunity for regrowth remains.

    Analysis of market concentration strongly suggests that the regional aircraft in the United States will once again signal a strong competitive advantage, just as it did in 2017.

    This anticipated growth in business and international demand is highly dependent upon network connectivity - precisely the competitive advantage brought by a robust regional network.

    THE COMPETITIVE ADVANTAGE OF REGIONAL AIRCRAFT

    courtney-2

    The breadth of an airline’s network can be best described by its market concentration. The higher the market concentration, the more passengers will be required to find alternative airports to complete their travel. This becomes critical for small and medium-sized communities where larger aircraft may fly to the vacation hot-spot; however, any other travel requires a drive to the larger airport.As such, the competitive nature of a market to capture the business traveler for an airline can be illustrated by market concentration. To measure concentration, we use the Herfindahl-Herschman Index (HHI), a long-standing metric comparing the market size to the market breadth. In the context of air travel, a higher HHI indicates passenger traffic with few options, whereas a low HHI indicates strong market breadth and a diversified network.Whencomparing HHI values of actual itineraries flown during Q2 2021, the competitive nature of the regional network stands out. In markets where regional jets were a part of the itinerary, market concentration was one-fourth of the itineraries operated by narrowbody aircraft. This staggering increase in market breadth the regional aircraft illustrates just how competitive a full network can be, once travel expands beyond the few leisure destinations.

    courtney-3

    MORE PASSENGERS RELYING ON REGIONAL AVIATION

    Over the course of the pandemic, the market concentration for narrowbody aircraft has further increased, reflecting the increasing leisure demand and fewer connecting options. Compared to 2019, narrowbody networks have increased network concentration by 2.7%.

    Conversely, the reliance on the regional aircraft to maintain a competitive network has increased. Market concentration of itineraries involving regional aircraft fell by almost 9% since 2019, showing how much more passengers rely on regional aviation to travel to all but the most popular destinations.

    PREPARING FOR BUSINESS TRAVEL GROWTH

    Today, with the recovery in the high-value business and international traveler just beginning, this competitive network advantage the regional airlines bring has not yet been realized. Further, a pilot shortage impacting the regional airlines is putting pressure on available capacity to maintain this low concentration and high market breadth.

    These two factors are working together to create a shift toward the leisure passengers who have returned, at the risk of not being competitive for the business travelers who are about to return.The result is difficult to see from within a currently depressed business travel environment, however, the airlines which maintain and grow their regional networks today will be in a position to corner the business travel market tomorrow.

    Just as network connectivity was paramount in 2017, so too will it be paramount as the recovery continues. Market concentration for larger aircraft continues to increase, but it is up to the regional networks, which have increasingly been relied upon, to maintain a connection to the world’s air transportation system. The competitive advantages are only set to continue.

    We are happy to bring you this special contribution from Courtney Miller, Founder and Managing Partner of Visual Approach. Courtney has over 20 years of aviation analysis experience. A particularly talented storyteller, he finds insights and trends in the aircraft, network, and financial segments of the industry and presents them in an intuitive way. His data and analysis can be seen regularly in The Air Current and Cranky Network Weekly. You can contact him at: courtney@visualapproach.io, and learn more about Visual Approach Analytics at: https://visualapproach.io.

     

    Contributor: Courtney Miller, Founder and Managing Partner of Visual Approach

    8 MIN.
  • PROFILES IN REGIONAL RESILIENCE: SKYWEST AIRLINES

    PROFILES IN REGIONAL RESILIENCE: SKYWEST AIRLINES

    PROFILES IN REGIONAL RESILIENCE: SKYWEST AIRLINES

    Contributor: Pierre Gagnon, Director, Business Development, Aftermarket Commercial Services

    The COVID-19 pandemic changed the landscape of the aviation industry and tested the mettle of the airlines everywhere. While many carriers were forced to cease all passenger operations during 2020, SkyWest stayed proactive, maintained its focus, and learned invaluable lessons to adapt to the environment and keep its people, passengers, and business safe.

    Based in St. George, Utah, SkyWest Airlines operates through partnerships with United Airlines, Delta Air Lines, American Airlines and Alaska Airlines. A regional carrier, SkyWest connects passengers to 230 destinations throughout North America and has some 13,000 employees. By number of aircraft, it is one of the largest airlines in the world: they own or lease a total of 600 aircraft (roughly two-third CRJs), with 468 in service. In addition to these, SkyWest has 149 aircraft that are either leased or parked temporarily, including two CRJ200s, 34 CRJ550s and five CRJ900s that are leased to other carriers by SkyWest Leasing.

    STAYING AHEAD OF THE CURVE

    Against the challenging backdrop of 2020, SkyWest made several strategic moves that enabled it to weather the storm and ultimately, be well-positioned for the industry recovery. Focusing on assets within their operating footprint, SkyWest rightsized their fleet, acquiring additional aircraft while removing others. It was also one of the first regional airlines to successfully resume continued qualification training with expanded COVID testing across the operation. In anticipation of the eventual return to flight, SkyWest maintained its robust pilot-hiring pipeline with more than 300 flight-training schools and universities. One year later, SkyWest is poised for takeoff.

    SkyWest’s strategic partnership with the MHIRJ Aftermarket group has also paid off: for years it has performed all its heavy maintenance work with MHIRJ US Service Centers in Bridgeport, West Virginia and Tucson, Arizona and SkyWest’s Operations team used the reduced utilization flying period to further prepare its CRJ fleet for the majors’ return to full schedule later this summer. At the same time, its delivery acceptance team travelled to MHIRJ’s Mirabel facility in Canada to intake incremental CRJ900 ATMOSPHÈRE aircraft ordered by Delta Air Lines.

    LOOKING AT BLUE SKIES

    Blue skies are on the horizon for SkyWest. As a domestic regional airline, SkyWest flies to and from smaller cities and routes that can’t fill the seats of larger airliners. Also, during the pandemic the regional sector has been more resilient and faster to recover as major airlines can maintain a competitive market share by using regional aircraft, particularly with SkyWest who was ready to develop flexible solutions with their partners. Leisure travellers are also taking to the skies again as vaccinations roll out nationwide and pandemic cases decline. To meet this growing need, SkyWest has resumed hiring flight attendants and maintenance technicians. The airline has also resumed hiring pilots to be fully ready for what is expected to be an active summer. Looking ahead, SkyWest expects to be back to 2019 flying levels by the end of 2021.

    THE EPITOME OF REGIONAL GRIT AND DETERMINATION

    In many ways, SkyWest epitomizes the resiliency of the aviation industry. Even during the most difficult year in our industry’s history, SkyWest showed it has what it takes to succeed, and was recognized for it. For the second year in a row, SkyWest received the Glassdoor Employees’ Choice Award – the only regional airline company on the list. In addition, SkyWest was named to Forbes’ America’s Best Employers list for 2021. Once again, it was the only regional airline to receive that honor.

    At the end of the day, emerging out of the pandemic strong and confident took people working together to rise to the challenge. “The past year has challenged our industry, our business, and our people beyond what anyone could have anticipated,” said Chip Childs, Chief Executive Officer of SkyWest. “We responded quickly and aggressively to protect our people, our partners, and our business. I’m incredibly proud of the SkyWest team’s great work and the flexibility they continue to demonstrate. We believe we’re in a strong position to play a key role in the industry’s recovery and we remain committed to positioning SkyWest for future success.”

    By being proactive and setting its key priorities early last year, SkyWest ensured it would successfully emerge from the crisis and play a key role in the recovery. At MHIRJ, we are proud to partner with industry leaders like SkyWest and come through the clouds together to brighter skies.

    american

     

    CRJ200

    CRJ900

    SkyWest operates the CRJ200, CRJ700 and CRJ900 for United Airlines, Delta Air Lines and American Airlines plus more.

    4 MIN.

    PROFILES IN REGIONAL RESILIENCE: SKYWEST AIRLINES

    PROFILES IN REGIONAL RESILIENCE: SKYWEST AIRLINES
    PROFILES IN REGIONAL RESILIENCE: SKYWEST AIRLINES

    Contributor: Pierre Gagnon, Director, Business Development, Aftermarket Commercial Services

    The COVID-19 pandemic changed the landscape of the aviation industry and tested the mettle of the airlines everywhere. While many carriers were forced to cease all passenger operations during 2020, SkyWest stayed proactive, maintained its focus, and learned invaluable lessons to adapt to the environment and keep its people, passengers, and business safe.

    Based in St. George, Utah, SkyWest Airlines operates through partnerships with United Airlines, Delta Air Lines, American Airlines and Alaska Airlines. A regional carrier, SkyWest connects passengers to 230 destinations throughout North America and has some 13,000 employees. By number of aircraft, it is one of the largest airlines in the world: they own or lease a total of 600 aircraft (roughly two-third CRJs), with 468 in service. In addition to these, SkyWest has 149 aircraft that are either leased or parked temporarily, including two CRJ200s, 34 CRJ550s and five CRJ900s that are leased to other carriers by SkyWest Leasing.

    STAYING AHEAD OF THE CURVE

    Against the challenging backdrop of 2020, SkyWest made several strategic moves that enabled it to weather the storm and ultimately, be well-positioned for the industry recovery. Focusing on assets within their operating footprint, SkyWest rightsized their fleet, acquiring additional aircraft while removing others. It was also one of the first regional airlines to successfully resume continued qualification training with expanded COVID testing across the operation. In anticipation of the eventual return to flight, SkyWest maintained its robust pilot-hiring pipeline with more than 300 flight-training schools and universities. One year later, SkyWest is poised for takeoff.

    SkyWest’s strategic partnership with the MHIRJ Aftermarket group has also paid off: for years it has performed all its heavy maintenance work with MHIRJ US Service Centers in Bridgeport, West Virginia and Tucson, Arizona and SkyWest’s Operations team used the reduced utilization flying period to further prepare its CRJ fleet for the majors’ return to full schedule later this summer. At the same time, its delivery acceptance team travelled to MHIRJ’s Mirabel facility in Canada to intake incremental CRJ900 ATMOSPHÈRE aircraft ordered by Delta Air Lines.

    LOOKING AT BLUE SKIES

    Blue skies are on the horizon for SkyWest. As a domestic regional airline, SkyWest flies to and from smaller cities and routes that can’t fill the seats of larger airliners. Also, during the pandemic the regional sector has been more resilient and faster to recover as major airlines can maintain a competitive market share by using regional aircraft, particularly with SkyWest who was ready to develop flexible solutions with their partners. Leisure travellers are also taking to the skies again as vaccinations roll out nationwide and pandemic cases decline. To meet this growing need, SkyWest has resumed hiring flight attendants and maintenance technicians. The airline has also resumed hiring pilots to be fully ready for what is expected to be an active summer. Looking ahead, SkyWest expects to be back to 2019 flying levels by the end of 2021.

    THE EPITOME OF REGIONAL GRIT AND DETERMINATION

    In many ways, SkyWest epitomizes the resiliency of the aviation industry. Even during the most difficult year in our industry’s history, SkyWest showed it has what it takes to succeed, and was recognized for it. For the second year in a row, SkyWest received the Glassdoor Employees’ Choice Award – the only regional airline company on the list. In addition, SkyWest was named to Forbes’ America’s Best Employers list for 2021. Once again, it was the only regional airline to receive that honor.

    At the end of the day, emerging out of the pandemic strong and confident took people working together to rise to the challenge. “The past year has challenged our industry, our business, and our people beyond what anyone could have anticipated,” said Chip Childs, Chief Executive Officer of SkyWest. “We responded quickly and aggressively to protect our people, our partners, and our business. I’m incredibly proud of the SkyWest team’s great work and the flexibility they continue to demonstrate. We believe we’re in a strong position to play a key role in the industry’s recovery and we remain committed to positioning SkyWest for future success.”

    By being proactive and setting its key priorities early last year, SkyWest ensured it would successfully emerge from the crisis and play a key role in the recovery. At MHIRJ, we are proud to partner with industry leaders like SkyWest and come through the clouds together to brighter skies.

    american

     

    CRJ200

    CRJ900

    SkyWest operates the CRJ200, CRJ700 and CRJ900 for United Airlines, Delta Air Lines and American Airlines plus more.

    4 MIN.
  • GROWING FROM THE GROUND UP WITH CRJ SERIES AIRCRAFT -

    GROWING FROM THE GROUND UP WITH CRJ SERIES AIRCRAFT -

    GROWING FROM THE GROUND UP WITH CRJ SERIES AIRCRAFT -

    air_nostrum

    AIR NOSTRUM

    FOUNDED IN 1994 IN VALENCIA, SPAIN.

    SETTING THE GROUNDWORK FOR GROWTH

    Air Nostrum’s journey with regional jets began a few months after signing the 1997 franchise agreement with Iberia that allowed it to market its flights under the brand “Iberia Regional Air Nostrum.” That year, the Air Nostrum received its first jet—a fifty-seat CRJ200. The CRJ200 jet perfectly matched the company’s business model allowing the airline to increase the frequency of regional flights that were aimed at business travellers. They helped the airline expand profitably, by allowing it to compete with low-cost European carriers due to their lowest cost-per-seat advantage. “CRJ regional jets have been a very valuable tool for the development of Air Nostrum,” said Carlos Bertomeu, Executive President at Air Nostrum. “The introduction of the CRJ200 resulted in a qualitative leap forward in Spanish regional aviation thanks to its outstanding customer service for passengers and the aircraft’s excellent performance.” 

    OVER 75,000 ANNUAL FLIGHTS. 5.2 MILLION ANNUAL PASSENGERS. 200 DAILY FLIGHT OPERATIONS TO AND FROM SOME 50 AIRPORTS LOCATED IN 7 EUROPEAN AND NORTH AFRICAN COUNTRIES.

    tcp_0077

    Over the past 25 years, CRJ Series regional jets have transformed the airline industry, becoming synonymous with growth. These innovative aircraft rose to popularity due to their distinct operational advantages, including optimized seating capacity, cost and fuel-efficiency, and flexibility of route development. For Air Nostrum, CRJ aircraft was, and is, the path to the future.

    EXPANDING PASSENGER CAPACITY

    The strategy for the airline’s next phase in growth was to increase passenger capacity. And so, in 2005 Air Nostrum purchased its first 90-seat jet, the CRJ900 and followed in 2009 by another important order of its larger version, the CRJ1000, seating up to 100 passengers.

    Trabajadores

     

    In 2010, Air Nostrum welcomed the first 100-seat jet, the CRJ1000, which was the most modern and advanced regional aircraft on the market.

    Air Nostrum became a launch carrier for the CRJ1000, enabling it to establish itself as the leading regional airline in Spain and one of the first regional players in Europe.

    STRATEGICALLY EXPANDING ITS CRJ FLEET

    Experience with CRJ aircraft continued to confirm Air Nostrum’s expectations, and in 2012 the airline signed an agreement for the total renewal of its fleet - an investment of more than 800 million euros. The project involved the gradual incorporation of 44 CRJ jets, making Air Nostrum the regional airline with the most modern fleet in Europe. Made amid a global crisis, these acquisitions were a bold move that worked to the airline’s advantage.

    crj1000

    CRJ 1000 aircraft offer impressive performance and high profit per seat.

    The CRJs were intended to fly on higher density routes and routes connecting French airports with the T4 hub at Adolfo Suárez Madrid-Barajas. Air Nostrum had anticipated the demands of a new market in the European aviation sector and stayed competitive. More recently, Air Nostrum has looked to CRJ aircraft to meet the company’s sustainability challenge. Their lower maximum take-off weight per seat has resulted in savings in airport charges, less fuel consumption, and lower CO2 emissions. The CRJ family of aircraft has also played an important role in the company’s standards of timeliness and regularity. In total, Air Nostrum has won nine inservice reliability awards. throughout its history. This record consolidates its leadership in European regional aviation as the company with the highest level of reliability in these aircraft models.

    REBOUNDING WITH STRENGTH

    The Air Nostrum fleet was at times either fully or at least partially idle due to COVID-19. The activity levels have steadily rebounded since and are now exceeding 80% of those noted in the summer months of 2019. From January to March 2021, Air Nostrum topped the list of companies with the most operations in the AENA network. The world’s leading airport management company, AENA manages 46 airports and 2 heliports in Spain and participates directly and indirectly in the management of a further 16 airports in Europe and the Americas, including Brazil, Mexico, Columbia, and Jamaica.

    The airline that began by offering regional flights has also developed opportunities for international growth thanks to CRJ aircraft. “We believe that there will be even more opportunities in the coming years for a strong regional carrier, as it has been noted that many regional routes are becoming undersupplied by their current carriers,” said Carlos Bertomeu. “Our commitment to the CRJ family has also led us to introduce these jets into the business initiatives that Air Nostrum partners have undertaken in Europe and South America.”

    As the world’s most successful family of regional jets, CRJ Series aircraft will continue to lead the regional jet market in the coming decades and help ensure a bright future for operators like Air Nostrum competing in a dynamic marketplace.

    Trabajadores

    Air Nostrum has dedicated one of its planes to the charitable organization Aviación Sin Fronteras. ASF volunteers accompanied several children on a surprise trip to Strasbourg where they got to spend a weekend with their parents at the city’s famous Christmas market

     

    6 MIN.

    GROWING FROM THE GROUND UP WITH CRJ SERIES AIRCRAFT -

    GROWING FROM THE GROUND UP WITH CRJ SERIES AIRCRAFT -
    GROWING FROM THE GROUND UP WITH CRJ SERIES AIRCRAFT -

    air_nostrum

    AIR NOSTRUM

    FOUNDED IN 1994 IN VALENCIA, SPAIN.

    SETTING THE GROUNDWORK FOR GROWTH

    Air Nostrum’s journey with regional jets began a few months after signing the 1997 franchise agreement with Iberia that allowed it to market its flights under the brand “Iberia Regional Air Nostrum.” That year, the Air Nostrum received its first jet—a fifty-seat CRJ200. The CRJ200 jet perfectly matched the company’s business model allowing the airline to increase the frequency of regional flights that were aimed at business travellers. They helped the airline expand profitably, by allowing it to compete with low-cost European carriers due to their lowest cost-per-seat advantage. “CRJ regional jets have been a very valuable tool for the development of Air Nostrum,” said Carlos Bertomeu, Executive President at Air Nostrum. “The introduction of the CRJ200 resulted in a qualitative leap forward in Spanish regional aviation thanks to its outstanding customer service for passengers and the aircraft’s excellent performance.” 

    OVER 75,000 ANNUAL FLIGHTS. 5.2 MILLION ANNUAL PASSENGERS. 200 DAILY FLIGHT OPERATIONS TO AND FROM SOME 50 AIRPORTS LOCATED IN 7 EUROPEAN AND NORTH AFRICAN COUNTRIES.

    tcp_0077

    Over the past 25 years, CRJ Series regional jets have transformed the airline industry, becoming synonymous with growth. These innovative aircraft rose to popularity due to their distinct operational advantages, including optimized seating capacity, cost and fuel-efficiency, and flexibility of route development. For Air Nostrum, CRJ aircraft was, and is, the path to the future.

    EXPANDING PASSENGER CAPACITY

    The strategy for the airline’s next phase in growth was to increase passenger capacity. And so, in 2005 Air Nostrum purchased its first 90-seat jet, the CRJ900 and followed in 2009 by another important order of its larger version, the CRJ1000, seating up to 100 passengers.

    Trabajadores

     

    In 2010, Air Nostrum welcomed the first 100-seat jet, the CRJ1000, which was the most modern and advanced regional aircraft on the market.

    Air Nostrum became a launch carrier for the CRJ1000, enabling it to establish itself as the leading regional airline in Spain and one of the first regional players in Europe.

    STRATEGICALLY EXPANDING ITS CRJ FLEET

    Experience with CRJ aircraft continued to confirm Air Nostrum’s expectations, and in 2012 the airline signed an agreement for the total renewal of its fleet - an investment of more than 800 million euros. The project involved the gradual incorporation of 44 CRJ jets, making Air Nostrum the regional airline with the most modern fleet in Europe. Made amid a global crisis, these acquisitions were a bold move that worked to the airline’s advantage.

    crj1000

    CRJ 1000 aircraft offer impressive performance and high profit per seat.

    The CRJs were intended to fly on higher density routes and routes connecting French airports with the T4 hub at Adolfo Suárez Madrid-Barajas. Air Nostrum had anticipated the demands of a new market in the European aviation sector and stayed competitive. More recently, Air Nostrum has looked to CRJ aircraft to meet the company’s sustainability challenge. Their lower maximum take-off weight per seat has resulted in savings in airport charges, less fuel consumption, and lower CO2 emissions. The CRJ family of aircraft has also played an important role in the company’s standards of timeliness and regularity. In total, Air Nostrum has won nine inservice reliability awards. throughout its history. This record consolidates its leadership in European regional aviation as the company with the highest level of reliability in these aircraft models.

    REBOUNDING WITH STRENGTH

    The Air Nostrum fleet was at times either fully or at least partially idle due to COVID-19. The activity levels have steadily rebounded since and are now exceeding 80% of those noted in the summer months of 2019. From January to March 2021, Air Nostrum topped the list of companies with the most operations in the AENA network. The world’s leading airport management company, AENA manages 46 airports and 2 heliports in Spain and participates directly and indirectly in the management of a further 16 airports in Europe and the Americas, including Brazil, Mexico, Columbia, and Jamaica.

    The airline that began by offering regional flights has also developed opportunities for international growth thanks to CRJ aircraft. “We believe that there will be even more opportunities in the coming years for a strong regional carrier, as it has been noted that many regional routes are becoming undersupplied by their current carriers,” said Carlos Bertomeu. “Our commitment to the CRJ family has also led us to introduce these jets into the business initiatives that Air Nostrum partners have undertaken in Europe and South America.”

    As the world’s most successful family of regional jets, CRJ Series aircraft will continue to lead the regional jet market in the coming decades and help ensure a bright future for operators like Air Nostrum competing in a dynamic marketplace.

    Trabajadores

    Air Nostrum has dedicated one of its planes to the charitable organization Aviación Sin Fronteras. ASF volunteers accompanied several children on a surprise trip to Strasbourg where they got to spend a weekend with their parents at the city’s famous Christmas market

     

    6 MIN.
  • HOW WILL THE 50-SEATER FIT INTO THE FUTURE?

    HOW WILL THE 50-SEATER FIT INTO THE FUTURE?

    HOW WILL THE 50-SEATER FIT INTO THE FUTURE?

    A snapshot of today’s situation clearly shows that the US 50-seater fleet is aging and is facing immediate risk of retirement. The COVID crisis might just precipitate things and accelerate the retirement rate. This raises the question of can we replace these aircraft, and how?

    What is the future of the 50-seater market in the US post-COVID and can the Big 3 afford to lose $1B in annual revenue?

    - Produced by MHIRJ Aero Advisory Services

    Pre-COVID-19, the Big 3 (Delta, American, and United) flew a fleet of over 650 50-seater regional jets. This massive fleet has played the critical role of feeding hubs in their respective networks. During the current crisis, many of these aircraft have been parked and the question of their return to service is top of mind for many people in the industry. So, what does the future of the 50-seater market look like in the US post-COVID?

    AN AGING FLEET

    Bombardier and Embraer both have stopped production of their 50-seater regional jets a long time ago and no new program has been launched since then. The only aircraft still currently manufactured that would match the cabin size of these aircraft is the ATR42. But turboprop aircraft do not seem to be a desired solution for any of the Big 3. There is practically no appetite in the US market for turbo-propellers

    Because of this lack of solution to replace the aging the 50-seater fleet, couldn’t the Big 3 simply drop these markets? The short answer is no.

    8-1_charts

    FIGURE 1 - Status of the US 50-seaters fleet as of September 2020 (Source: CIRIUM Diio)

    THE COSTS OF REMOVING THE 50-SEATER MARKET

    Regional aviation and the 50-seater segment in particular is often misjudged when it comes to its revenue generation potential. The revenue allocated to the leg flown by regional aircraft is just the tip of an iceberg made of a substantial feed which supports the entire airline network. When considering the upstream revenue enabled by the feed, no less than 30% of the Big 3 revenue is dependent on regional aircraft operations (see figure 2). Simply pulling the plug of regional aviation is unrealistic. The exact same principles apply to the 50-seater market, removing them from the picture would mean ~$1B loss of revenue per year for Delta, American and United together.

    8-2_charts

    FIGURE 2 - Big 3 Fleet composition, revenue, and dependent revenue (Source: CIRIUM Diio, September 2019 data)

    TAKING BACK THE SKIES

    Not all three Majors are impacted in the same way, but a more in-depth analysis of their networks and bases again emphasize the contribution 50-seaters bring at a network level (See figure 3 for examples). Removing them would lead to a snowball effect where other parts of the network (long-haul for instance) will suddenly not look as profitable as before.

    8-3_charts

    FIGURE 3 - Network Contribution of 50-Seaters aircraft by base (Source: CIRIUM Diio, year 2018)

    8-6_charts

    8-7_charts

    8-8_charts

    FIGURE 4 - 50-Seaters route sorted by frequency of operation (left = current status, right = realistic view if replaced by 76-seaters at iso-capacity)

    DDMH0028

    50-seat CRJ200 in flight

    REPLACING 50-SEATERS WITH 76-SEATERS

    For all the reasons explained above, and because no imminent replacement solution exists, it is very likely that the Big 3 will try to operate their 50-seater as long as possible. Eventually they will try to address this denser part of the network by replacing retired aircraft with available 76-seats regional jets.

    The new question which arises is, can the entire 50-seater market be taken over by 76-seater aircraft? To answer this question, we must look to the current frequency offering on the 50-seater network (see figure 4 on the left). As explained above, the feed is a huge component (70% or more) of the traffic carried by 50-seater aircraft (see figure 5). It comes as no surprise that the average frequency on routes operated by small regional jets is high, which is done to optimize connections at the hubs. In order to preserve load factors, replacing 50-seater aircraft by 76-seater aircraft maintaining overall capacity will logically lead to frequency reductions

    We can realistically assess that the routes maintaining at least a daily frequency after switching to large RJ operation will remain viable and as a result fall in the “Can besaved” bucket. On the other hand, a route that will fall below the critical threshold of a daily service can be considered lost (red column). Not only will the point-to-point traffic from these routes be lost, but the revenue generated on other legs thanks to the feed they bring to the network will be lost as well.

    This is the first effect of the transfer of the 50-seater market to large RJ, but it is not the only one. Indeed, the average drop of frequency will also impact the quality and quantity of passenger connections and negatively impact the feeding traffic.

    THE VALUE OF FEEDING THE NETWORK

    If we look at the ratio of feed versus pointto-point traffic, we see that the higher the frequency, the more feed. This makes sense as more frequencies mean more possibilities to connect with more flights at the airline hub. Note the extremely high ratio of feed, beyond 80% on triple daily routes for Delta, hence the concept of iceberg we were referring to earlier: the value of the 50-seaters network resides in the feed they bring to the network.

    Sadly, switching from a 50-seater operation to a 76-seater will lead to a reduction of frequencies, as we saw in figure 4. Consequently, we can also expect a degradation of the feed. Our estimates are losses of ~2% of the feed revenue for Delta, and 4% to 5% for American and United. Those estimates are calculated combining the loss of frequency detailed in figure 4 with the degradation of connection quality as seen in figure 5.

    TOO IMPORTANT TO LET GO NOW

    In conclusion, the 50-seater market is just too big for Delta, American, and United to simply pull the plug. It is too big, especially because of the importance of the feed it brings to the respective airline networks. As no replacement solution is currently to be found from the OEM side, and because a switch to larger RJ will have a negative impact on the revenue generation, the Big 3 will have no other choice than to fly the current 50-seater fleet as long as possible. Eventually they will try to switch this part of their network to 76-seater operations. While for most of the routes this seems feasible (see figure 4), many markets will have to be dropped. All-in-all, three streams of income loss have to be expected when this switch happens: loss of point-to-point traffic on dropped routes, loss of the feed originally generated by these dropped routes, and loss of feed because of degraded frequencies on remaining routes. The estimated loss of revenue due to these 3 factors were evaluated at respectively 5%, 10% and 6% of the 50-seater dependent revenue for Delta, American and United. Considering 2019 results, that would represent ~$130M per year for Delta, $380M for American, and $350M for United: a near billion US dollars of lost revenue per year!

    Most likely the only way to preserve this revenue opportunity would be to replace the current 50-seaters with aircraft of similar or smaller cabin size. Could there be an electric solution? That’s a discussion for another day.

    8-9_charts

    FIGURE 5 - Ratio of Feed versus Point-to-Point passenger - 50-Seater Network (Source: CIRUIM Diio, September 2019

    imagePNG

    In conclusion, the 50-seater market is just too big for Delta, American, and United to simply pull the plug. It is too big, especially because of the importance of the feed it brings to the respective airline networks.

    8 MIN.

    HOW WILL THE 50-SEATER FIT INTO THE FUTURE?

    HOW WILL THE 50-SEATER FIT INTO THE FUTURE?
    HOW WILL THE 50-SEATER FIT INTO THE FUTURE?

    A snapshot of today’s situation clearly shows that the US 50-seater fleet is aging and is facing immediate risk of retirement. The COVID crisis might just precipitate things and accelerate the retirement rate. This raises the question of can we replace these aircraft, and how?

    What is the future of the 50-seater market in the US post-COVID and can the Big 3 afford to lose $1B in annual revenue?

    - Produced by MHIRJ Aero Advisory Services

    Pre-COVID-19, the Big 3 (Delta, American, and United) flew a fleet of over 650 50-seater regional jets. This massive fleet has played the critical role of feeding hubs in their respective networks. During the current crisis, many of these aircraft have been parked and the question of their return to service is top of mind for many people in the industry. So, what does the future of the 50-seater market look like in the US post-COVID?

    AN AGING FLEET

    Bombardier and Embraer both have stopped production of their 50-seater regional jets a long time ago and no new program has been launched since then. The only aircraft still currently manufactured that would match the cabin size of these aircraft is the ATR42. But turboprop aircraft do not seem to be a desired solution for any of the Big 3. There is practically no appetite in the US market for turbo-propellers

    Because of this lack of solution to replace the aging the 50-seater fleet, couldn’t the Big 3 simply drop these markets? The short answer is no.

    8-1_charts

    FIGURE 1 - Status of the US 50-seaters fleet as of September 2020 (Source: CIRIUM Diio)

    THE COSTS OF REMOVING THE 50-SEATER MARKET

    Regional aviation and the 50-seater segment in particular is often misjudged when it comes to its revenue generation potential. The revenue allocated to the leg flown by regional aircraft is just the tip of an iceberg made of a substantial feed which supports the entire airline network. When considering the upstream revenue enabled by the feed, no less than 30% of the Big 3 revenue is dependent on regional aircraft operations (see figure 2). Simply pulling the plug of regional aviation is unrealistic. The exact same principles apply to the 50-seater market, removing them from the picture would mean ~$1B loss of revenue per year for Delta, American and United together.

    8-2_charts

    FIGURE 2 - Big 3 Fleet composition, revenue, and dependent revenue (Source: CIRIUM Diio, September 2019 data)

    TAKING BACK THE SKIES

    Not all three Majors are impacted in the same way, but a more in-depth analysis of their networks and bases again emphasize the contribution 50-seaters bring at a network level (See figure 3 for examples). Removing them would lead to a snowball effect where other parts of the network (long-haul for instance) will suddenly not look as profitable as before.

    8-3_charts

    FIGURE 3 - Network Contribution of 50-Seaters aircraft by base (Source: CIRIUM Diio, year 2018)

    8-6_charts

    8-7_charts

    8-8_charts

    FIGURE 4 - 50-Seaters route sorted by frequency of operation (left = current status, right = realistic view if replaced by 76-seaters at iso-capacity)

    DDMH0028

    50-seat CRJ200 in flight

    REPLACING 50-SEATERS WITH 76-SEATERS

    For all the reasons explained above, and because no imminent replacement solution exists, it is very likely that the Big 3 will try to operate their 50-seater as long as possible. Eventually they will try to address this denser part of the network by replacing retired aircraft with available 76-seats regional jets.

    The new question which arises is, can the entire 50-seater market be taken over by 76-seater aircraft? To answer this question, we must look to the current frequency offering on the 50-seater network (see figure 4 on the left). As explained above, the feed is a huge component (70% or more) of the traffic carried by 50-seater aircraft (see figure 5). It comes as no surprise that the average frequency on routes operated by small regional jets is high, which is done to optimize connections at the hubs. In order to preserve load factors, replacing 50-seater aircraft by 76-seater aircraft maintaining overall capacity will logically lead to frequency reductions

    We can realistically assess that the routes maintaining at least a daily frequency after switching to large RJ operation will remain viable and as a result fall in the “Can besaved” bucket. On the other hand, a route that will fall below the critical threshold of a daily service can be considered lost (red column). Not only will the point-to-point traffic from these routes be lost, but the revenue generated on other legs thanks to the feed they bring to the network will be lost as well.

    This is the first effect of the transfer of the 50-seater market to large RJ, but it is not the only one. Indeed, the average drop of frequency will also impact the quality and quantity of passenger connections and negatively impact the feeding traffic.

    THE VALUE OF FEEDING THE NETWORK

    If we look at the ratio of feed versus pointto-point traffic, we see that the higher the frequency, the more feed. This makes sense as more frequencies mean more possibilities to connect with more flights at the airline hub. Note the extremely high ratio of feed, beyond 80% on triple daily routes for Delta, hence the concept of iceberg we were referring to earlier: the value of the 50-seaters network resides in the feed they bring to the network.

    Sadly, switching from a 50-seater operation to a 76-seater will lead to a reduction of frequencies, as we saw in figure 4. Consequently, we can also expect a degradation of the feed. Our estimates are losses of ~2% of the feed revenue for Delta, and 4% to 5% for American and United. Those estimates are calculated combining the loss of frequency detailed in figure 4 with the degradation of connection quality as seen in figure 5.

    TOO IMPORTANT TO LET GO NOW

    In conclusion, the 50-seater market is just too big for Delta, American, and United to simply pull the plug. It is too big, especially because of the importance of the feed it brings to the respective airline networks. As no replacement solution is currently to be found from the OEM side, and because a switch to larger RJ will have a negative impact on the revenue generation, the Big 3 will have no other choice than to fly the current 50-seater fleet as long as possible. Eventually they will try to switch this part of their network to 76-seater operations. While for most of the routes this seems feasible (see figure 4), many markets will have to be dropped. All-in-all, three streams of income loss have to be expected when this switch happens: loss of point-to-point traffic on dropped routes, loss of the feed originally generated by these dropped routes, and loss of feed because of degraded frequencies on remaining routes. The estimated loss of revenue due to these 3 factors were evaluated at respectively 5%, 10% and 6% of the 50-seater dependent revenue for Delta, American and United. Considering 2019 results, that would represent ~$130M per year for Delta, $380M for American, and $350M for United: a near billion US dollars of lost revenue per year!

    Most likely the only way to preserve this revenue opportunity would be to replace the current 50-seaters with aircraft of similar or smaller cabin size. Could there be an electric solution? That’s a discussion for another day.

    8-9_charts

    FIGURE 5 - Ratio of Feed versus Point-to-Point passenger - 50-Seater Network (Source: CIRUIM Diio, September 2019

    imagePNG

    In conclusion, the 50-seater market is just too big for Delta, American, and United to simply pull the plug. It is too big, especially because of the importance of the feed it brings to the respective airline networks.

    8 MIN.