JSX, ATR, and Turboprops in America

This week, the turboprop took another shot at the US airline market. This attempt differs from previous ones. But what does the market look like? Is there data to guide us? Fortunately, there is data to guide us. Spoiler alert: Americans don't like turboprops. Now, the instant response to that statement is "but this is different." It always is, and then, later on, it isn't. Looking only at markets with a 500-mile stage length, this is what the DOT T-100 shows through October last year. [caption id="attachment_186644" align="aligncenter" width="580"] DOT T-100; AirInsight[/caption] Regardless of the hoopla associated with a fresh attempt, these are the facts. The trend is clearly not new. The US market has vast distances- but the chart is limited to 500 miles. Still, turboprops have steadily lost favor. JSX might be able to turn a profit with 22 passengers, but we can't say for sure. What we can say with confidence, JSX must be looking at very low acquisition costs. They are using secondhand aircraft (remember Silver Airways?), but they still need refurbishing, so they're not that cheap. Let's be positive and say JSX does well. Great news, but that news won't be ignored. JSX doesn't live in its own universe. Success means regional airlines will pounce, and they are the hungriest airlines out there. What does the data show us about regionals? [caption id="attachment_186645" align="aligncenter" width="580"] DOT T-100; AirInsight[/caption] Regionals flying up to 500-mile segments are upsizing steadily. That's no deep insight, as the 50-seater is no longer economical. This is the base for the ATR case in the US market. They argue that because the 50-seater regional jet doesn'twork, their airplane does. That argument is fair, but the missing part is why regionals use jets. They have to use jets because they feed majors that use jets. They are in a network, and that network has a rhythm running at Mach 0.8. Speed is the killer app for regionals. The Dash 8 had the speed and paid for it in fuel burn. ATRhas been successful everywhere, provided they don't need to feed a network. If they feed a network, connection times are much longer than when a regional jet is deployed. A passenger will have to miss a bank and catch the next one. At US hubs, that 'miss' can add two hours to your travel time and won't save you any ticket cost. Attractive? No. The US Regional Conundrum JSX may be able to do great things with the ATR. Big successes will be copied, probably limiting the upside. The big focus has to be on US regional airlines. The US regional market is at an interesting stage. There’s nothing new to help operators lower fuel burn in a fuel-intensive business Scope Clause is the primary factor – but that’s a reality one has to work around Complications are plain to see. Regional airlines must reduce fuel burn, but are stuck with 20-year-old aircraft technology Along with the Scope Clause, the industry is stuck. Consolidation is a panacea, not a long-term solution The market is desperate for fresh ideas and a technology breakthrough From our perspective, the path forward is a mix of talent, technology, and vision. Operators need a solution, and they are desperate for something The market needs a leader to step forward and share a vision that operators can rally around That leader needs the insight, data, and support to be persuasive Market wariness There have been so many failures. Operators, banks, and investors are wary Big OEMs failed: Bombardier, Mitsubishi, Dornier, Fokker, Heart Aerospace, and the list goes on. But Boom and Blake Scholl offer a lesson. A persuasive message wrapped in a compelling vision. The product is unrealistic, and yet investors and customers have embraced the concept. The message the market wants to hear: We have a low-risk solution that offers state-of-the-art fuel efficiency at the lowest seat cost. Interesting Programs There are two we know of that bear watching. MaeveJet in Amsterdam and EVIO in Montreal. Both are talking about a step change in economics. That is a crucial first step because it's the economics that are driving regionals up against the Scope Clause. But both programs need investors to carry them through their planning, certification, and entry into service. To date aerospce investors have been attracted to Mr. Scoll's vision. Partly, no doubt, because both airlines and investors believe passengers for this aircraft are going to pay huge premiums. The regional picture doesn't create quite the same buzz, does it? The Alpine Hurdle But we see US regionals, particularly SkyWest, are interested. SkyWest is involved with MaeveJet, as is Delta. There is an opportunity. But the hurdle to overcome is Alpine. The lower end of the market needs a visionary voice to explain and persuade. Because the problem is plain to see. The path to the solution is equally plain to see. Where is that visionary?

US Flight Planner - US DoT On-Time Data	Airbus vs Boeing - Official OEM Data
US Airline Schedule Performance - US DoT Data	Daily OEM Production & Deliveries -

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