Pssst-Wanna Buy A Regional Jet Cheap?

22 May

American Eagle Embraer ERJ-145s at DFW Airport. Photo by Benet J. Wilson

I covered the regional aviation industry from 1993 to 2001.  During that time, I watched as regional carriers grew up and became almost mirror images of their larger airline partners.

I had a front row seat to the rise of the 50-seat regional jet.  The big players were Canada’s Bombardier, with its CRJ and Brazil’s Embraer ERJ-145.  The major airlines wanted them for several reasons.  One, they were constrained by pilot scope clauses that didn’t allow regional pilots to fly larger jets. Two, they saw the jets as a way bring service to cities that weren’t quite big enough for larger jet or even do some point-to-point hub bypass service.

During the RJ frenzy heyday, regional carriers couldn’t sign contracts fast enough.  Cincinnati-based Comair led the pack, becoming the U.S. launch customer for the CRJ, while Continental Express was the same for the ERJ-145.  Mesa Air Group (my former employer) became the first regional to operate both types in its fleet.

But now, regionals can’t get rid of them fast enough as fuel costs made them more expensive to operate and major airlines began cutting traditional RJ routes.  You can read my May 1 interview in Aviation International News with my former boss, Jonathan Ornstein, on how this affected Mesa.

So where are all those RJs going? An April 30 story in AIN sister publication Business Jet Traveler reports that the current RJ glut “presents a rare opportunity to acquire a relatively new large-cabin jet at near-turboprop prices.”  I wrote a blog post in Aviation Week’s Business Aviation Now on Sept. 11, 2009 on Dubai-based Project Phoenix, a company that turns CRJ-200s into VIP business jets.

According to BJT, by the end of 2011, nearly 400 RJs were grounded in the U.S., many of them less than 10 years old, including BAE 146/Avros; Bombardier CRJ100s, 200s and 900s; Dornier/Fairchild 328Jets; Fokker 100s; and Embraer ERJ-135/145s. And, the publication notes, the Chapter 11 filing of American Airlines could see hundreds more ERJs in the American Eagle fleet be put into storage.

If you’re looking for a pretty nice aircraft that is a little slower but tougher than the average business jet at a bargain basement price, a converted CRJ might be for you.  For a mere $10 million, according to BJT, you can have one with “all the bells and whistles,” with a range of 3000nm carrying eight passengers and bags.  A similarly sized super mid-sized jet, like the Bombardier Challenger 605 (a loose cousin of the CRJ) could cost  more than double.

The bigger question is what will happen to all those smaller regional jets?  Is there enough of a market for them to be a strong alternative to a new business jet? Is there a market for these aircraft in other parts of the world, including China, Africa and South America? Only time will tell.

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