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January 25, 2021 - by Judson Rollins for www.leehamnews.com

As passenger travel trickles back to life, one trend that's already apparent is a long-term diminution of airline yields in most regions.

This is largely driven by a reduction in business travel, some of which is likely to never return.

Regional jets and small single-aisles like the Airbus A220 and Embraer's E2 family have higher unit cost, or cost per available seat-mile (CASM), than larger aircraft like the Boeing 737 or Airbus A320.

Achieving an operating profit with smaller jets requires high unit revenue, or revenue per available seat-mile (RASM). This will be difficult to achieve in a world where business travel is still down 70%-80% this year, even with a vaccine – and may be down 30% or more permanently.

What role will these smaller jets have after the pandemic? And will production match this new reality? A closer look is required.

Summary

• Regional jets and smaller single-aisles have higher unit costs.
• High costs require higher unit revenue to be profitable.
• Business travel likely slow to return, with some permanently impaired.
• Smaller jets previously used for routes now in danger of demand fragmentation...

Read more https://leehamnews.com/2021/01/25/small-jet-demand...