Quote:
Originally Posted by Adam P.
The gamble that DJ are taking, however, is whether the market is big enough to sustain a jet. If Virgin Blue think they can attract enough bums on seats to make it viable, fair play to them. The fact remains though that a Saab can break even with a seat factor of about 30% (in rough figures 10 pax). You simply cannot beat turboprop economics for the lower passenger numbers and stage lengths typical on Australian regional routes.
|
Adam - the difference is that for larger carriers (QF/DJ) the regional routes are meerly there to feed the more lucerative routes (domestic trunk & international) & offer passengers the ability to fly on one carrier acorss the entire network. They don't actually have to make a profit on the MQL/MEL flight if on carriage pax from that flight onto other domestic/intl routes leads to an overall profit for the passenger on the network. Opening up regional routes allowes passengers seemless travel on one airline (bags/FF points/1 check-in etc) rather then swapping between carriers. The increased brand awareness in the regional ports also leads to increased loads on other routes as well.
The dangar Rex faces is that QF/DJ can endulge in long term losses on these flights through price wars as at the end of the day it benefits their overall network - for Rex, this is their network & they can't afford the losses long term.