Nonstop routes served by turboprops have dropped by 58 percent since 1996 and departures have fallen 69 percent, according to Nicole Reider, an analyst with Back Aviation Solutions, who presented her findings at the AAAE National Air Service Conference March 31. The routes dropped from 1,347 to 565 between the second quarter of 1996 and the second quarter of 2006, resulting in a loss of billions of dollars in economic activity at these points.

These statistics and the growing crisis at small airports sparked the creation of the Community Air Service Coalition (CASC), which aims to improve air service to small and rural airports. The group also raises concerns facing disadvantaged airport communities and brings them to legislators and policymakers. A nonprofit corporation, the CASC, with Robert Bryant, Salisbury-Ocean City Airport manager as its chair, is open to any airport suffering from inadequate access to the national air transportation system.

While the number of routes has decreased, they are not ripe for exploitation by a new-generation of regionals, according to CommutAir President John Sullivan. The vast majority are thin routes that, combined with high operating costs of even small turboprops, makes them uneconomical, especially when they compete with alternative airports that have service from low-cost carriers such as JetBlue [JBLU] or Southwest [LUV].

This industry is facing another shakeup because of the proliferation of the 50-seat regional jet, Reider said. "They have become overextended with the revamping of networks, high fuel prices and competitive pressures," she said. "The current economic environment no longer supports the RJ as a turboprop replacement."

Reider also indicated that more turboprop markets will be dropped even if they are financially viable as fleets are reassigned. "Many communities have already lost all scheduled service and many more are vulnerable to this same fate." Thirty-five airports with at least five weekly flights in January 2001 had completely dropped off the scheduled route map as of January 2006. Over half of U.S. airports depend on only one or two destinations to connect to the national air transportation system and nearly 100 airports nationwide have connections to only a single destination.

Unsurprisingly, the shortest hops drop off first due to the competition from cars, buses and trains, as well as alternate airports with low-cost carriers. Indeed, markets under 300 statute miles have dropped by more than 20 percent, Reider said. While the economics of the RJs may no longer work in today's economic environment for regionals, their larger counterparts are changing the landscape by allowing low-cost carriers to go into smaller and smaller markets, further threatening the viability of the regional markets. "When there is an alternative airport with a low-cost carrier, there is no motivation to stay at the small airport," said Reider, who added that JetBlue is now operating 10 Embraer [ERJ] 190s but has 90 more on order.

"The RJs worked when the average fare was $1,000, but it is less than half that now," said Tulinda Larsen, vice president of Back Aviation Solutions. "Look at Ithaca, which has a solid base of traffic, but passengers can now go to Syracuse and catch JetBlue, Buffalo for Southwest and Rochester for AirTran [AAI]. Airlines are competing on service options using airports, and the low fares are sucking passengers out of markets. Studies indicate the leisure passenger will drive up to three hours to get the low fares."

The high cost of operations today is the main reason some of these markets won't work, Sullivan said. "Everything started to change when all Part 135 carriers were required to become Part 121 operators," dramatically increasing operating costs, he said. "Fuel has increased 400 percent since 2002 and smaller operators can't hedge. We don't have the capital. So the model is broken. The only thing that works is cost-plus where the capacity is purchased by a major carrier. That is not available in the 19-seat market because majors want cabin-class equipment."

Further complicating this is the increased maintenance costs of turboprops, many of which are now seen as older equipment. "Add to that lower yield, security charges, passenger facility charges and taxes, and it becomes a challenge to even make the 19-seater work," said Larsen. "You don't have people coming in to replace the carriers who have abandoned these markets because the cost to start a carrier is so high and the capital isn't there. I see it as the hole in the donut surrounding the hub is getting bigger, with few connecting opportunities to the hub. What is really disturbing is the fact that if you overlay what is happening in the airline industry with what is happening with Greyhound, many of these markets are being totally left out of the transportation system."

CommutAir has tried everything to attract passengers, with little success, Sullivan added. At Plattsburgh, N.Y., near the Burlington, Vt., airport, he charged a common rate that made the Plattsburgh segment to Burlington free. Pointing to the traditional formula for success - frequency - he noted, "We tried eight flights per day and as few as two flights per day, and nothing worked," he said. "Back in the mid '90s, when fuel was 60 cents, we had load factors in the 30s and 40s and our break-even was in the high 20s to mid 30s. Now break-even load factors are much higher and the load factor is much lower, with one route at 18 percent. I doubt many of these points will ever build beyond a certain point."

>>Contacts: Nicole Reider, Back Aviation, (202) 355-1166; Tulinda Larsen, Back Aviation, (202) 283-5052; John Sullivan, CommutAir, (518) 562- 2700<<