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Canadian Investing / Bombardier Aerospace

URL:  http://boards.fool.com/quotthe-operator-does-not-promise-the-30151865.aspx

Subject:  Re: New Learjet 70 and 75 Date:  7/16/2012  5:43 PM
Author:  jammerh Number:  2875 of 2881

"...The operator does NOT promise the availability of a specific aircraft and crew. Like a major airline, the operator maintains enough aircraft and crews to meet this contractual obligation, knowing that all of its customers will not need aircraft at the same time. The operator then schedules aircraft and crews as its customers request their availability, keeping track of each customer's actual hours of use. Of course, the operator also must schedule each aircraft for maintenance. Like a commercial airline, each FAA "type" of aircraft in its fleet requires a separate pool of pilots and technicians and a separate inventory of spare parts."

Yes, from what I understand, Santilli, who started Netjets did a lot of research into algorythms in an effort to come up with a formula that helps serve a maximum number of clients with a minimum number of aircraft. But my guess is that empty flights - to get aircraft where and when - they're needed must still present a problem.

I also get the impression fractional operators don't pay their pilots commercial pilot salaries and pension benefits.

"Historically, I think that Bombardier started the Flexjet operation before NetJets took off. Once you have signed contracts with customers, it's rather difficult to shut down the business. A merger with a competitor, following either a sale or an acquisition, would be the most economical way to do it."

Well, that's an interesting possibility. My impression was that Netjets started things, the Flight Options, and Bombardier followed suit. But this is something that should be verifiable.

"I don't foresee that in North America. If given a choice, most airline passengers will choose a jet over a turboprop every time, so long as there's a choice. This was manifest in the mid-1990's, when Comair's passengers consistently chose flights operated with regional jets over flights on the same routes times operated with turboprops, even when the latter were at more convenient times -- and other regional airlines' passengers started flocking to Comair to fly on regional jets, too."

A lot depends on fuel costs. You'll see more turboprops in North America if fuel costs rise dramatically in the years ahead. And a lot depends on developments in the pipeline with regard to new engine technologies. As you may realize engine makers for both turboprop engines and jet engines have new designs under development.

Eventually, we may even see some new engine type, or variation added to the mix. Voltaire, on his deathbed is said to have remarked, "Je vais voire la grande peut-etre.", or "I'm going to see the big maybe." New engine technologies now under development might be thought of that way.

"Yes, and turboprops have one major drawback. Passengers avoid them whenever there is an alternative, so they will fly nearly empty on routes where there is a competitor with regional jets. They don't generate revenue when they fly nearly empty!"

Passengers also avoid regional jets due to the perception at least, that they're cramped and less comfortable than larger commercial jet aircraft.

"As best I can tell, the "newer, cleaner, quieter, more fuel-efficient turboprops" still operate at slower speed and lower altitude, with more susceptibility to turbulence, and are still not as quiet as regional jets. While the speed and the altitude might not be as significant on routes under two hundred miles or so, the susceptibility to turbulence and the thumping noise are still a very significant factor for passenger comfort."

Any aircraft that flies shorter routes will experience some suceptability to turbulence because it can't easily attain the altitude required to avoid it.

A lot of the problem for turboprops involves perception versus the facts. Historically, turboprops have been much noisier than newer models such as Bombardier's QSeries with its proprietary noise-cancellation technology.
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