I’m packing my bag and heading to Aspen in the wee hours of the morning to cover the ever-quotable Michael Boyd’s annual aviation summit. With the memory of a certain United Airlines flight to LAX still fresh in my mind, I’ve opted to fly Southwest Airlines from BWI to Denver and make the scenic drive to Aspen.
I’ll have plenty to ponder during my four-hour car journey, such as how Sarah Palin unfortunately was not referring to tight abdominal muscles when she made her “Joe Six-Pack” comment during last night’s debate. You know – the important stuff.
Mostly, however, I’ll be thinking about the dire regional jet forecast that will be presented at the conference. While Boyd hasn’t divulged all the details, his latest “Hot Flash” alert is enough to make Bombardier and Embraer reach for the menopause meds (or a beer, for that matter).
“Just a couple years ago, fuel was less than 15% of the total RJ operations. North of $3.50 – where it’s been from time to time, fuel can approach 50% of costs,” warns Boyd. Here is his composite of CRJ and ERJ 50-seater costs based on a 500-mile stage length.
Lest you think things are all doom and gloom, there is some good news in store for Bombardier and Embraer. Over 35% of global airline demand in the next ten years will be in the 75-125 seat airliner categories. I’m glad to hear it, not least of all because it valiates a little regional aircraft feature I wrote in April.
“That means very strong demand for Embraer E-Jets. It also means that there is an opening for other entrants into these categories,” says Boyd.
Now how about that CSeries order, hmmm?