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Monday, September 26, 2005

RJ Growth At Busiest Airports Moderates

As the flight restrictions at Chicago O'Hare International Airport approach their first anniversary, the regional carriers and their regional jets are playing an even larger role.

Chicago is again the nation's busiest airport for regional carriers as 46.5 percent of its 2005 scheduled departures will be by regional carriers using RJs. A year ago, regional carriers had 41.5 percent of the scheduled flights, according to an analysis of scheduled flights performed by BACK Aviation Solutions for Regional Aviation News.

In its annual survey of the top regional markets, four of the five airports remain the same - although the pecking order has changed. BACK calculates that more than 670,900 regional flights this year will pass through Chicago, Denver, Dallas-Fort Worth, Atlanta and Los Angeles. New to the list this year is Denver, replacing Washington Dulles International Airport. Denver is debuting at No. 2 while Atlanta dropped from second to fourth and Los Angeles International dropped from fourth to fifth.

Collectively, regional traffic grew at the four airports by 0.4 percent over the 2004 scheduled flights.

The modest growth can best be attributed to the slower growth of RJs at the top five airports. There are 134,607 RJ flights scheduled for the fourth quarter, which is up 2.3 percent from 131,578 flown in the last three months of 2004, according to BACK's data. BACK analyst Frederick Roe noted that this year's projected growth is the slowest this decade. From 2003 to 2004, the growth rate had slowed to 3.6 percent compared to a 43.2 percent growth rate from 2002 to 2003.

The deployment of prop aircraft - both turboprop and piston-powered - at the five busiest airports had declined by 5.5 percent. The use of prop aircraft by regional carriers has been dropping since the introduction of regional jets. American Eagle [AMR], Atlantic Southeast Airlines (ASA) [SKYW] and SkyWest [SKYW] all have turboprops either in storage or leased out to other carriers.

Chicago

Beginning last December, the carriers at O'Hare agreed to cut back all flights to 88 per hour. The Federal Aviation Administration (FAA) cajoled the carriers into making the reductions because of complaints about congestion at the airport during peak travel periods. United Airlines [UALAQ] and American Airlines [AMR], the two dominant carriers at O'Hare, agreed to each cut their daily flights by 37. Since May, the FAA has been reviewing comments to a proposed set of rules that would continue the 88 flights per hour cap until April 2008 (RAN, May 30).

The shift from mainline jets to RJs was stark when BACK examined the fourth quarter flight schedules. With the regional carriers flying more, the mainline airlines have scheduled 9.1 percent fewer narrow-body and wide-body flights from O'Hare. There are 62,172 mainline flights on O'Hare's fourth quarter schedule.

American Eagle continues to have the largest market share of all regional carriers serving O'Hare. This year, BACK calculates that 18.8 percent of the regional flights will be on American Eagle - up 0.9 percent from 2004.

And for the third year in a row, O'Hare has shut its doors on turboprop passenger operations. Not one has been scheduled.

Denver

In cracking BACK's Top Five, Denver landed in the second spot with regional carriers flying 40.4 percent of all 265,596 scheduled flights.

In the fourth quarter, the number of RJ departures is projected to grow by 9.3 percent. The growth in regional flights can be attributed to the number of United Express operations flown by multiple carriers as well as the growth of the Frontier Express operation. Horizon Air [ALK] flies the Frontier Express flights out of Frontier Airlines' [FRNT] Denver hub.

SkyWest, flying as United Express, had the largest regional market share in Denver with 16.5 percent of the 2005 schedule.

Denver moved onto the list with its own growth and with shrinkage of Independence Air [FLYI] at Washington Dulles. A year ago, the new low-fare carrier - then based entirely on a fleet of 85 Bombardier [BBD] CRJ 200s - was flying nearly 300 flights a day. United Express was flying nearly as many. In the fourth quarter 2004, there were 50,300 RJ flights out of Dulles. Independence's growth proved to be too ambitious and it has been cutting back its flying. In the fourth quarter 2005, Independence is scheduled to fly 12,400 RJ departures from Dulles - about one-half of last year's.

Dallas

With the departure earlier this year of Delta Air Lines [DAL] - and its predominately RJ operation - the number of departures at Dallas-Fort Worth International Airport dropped by 6 percent this year. According to BACK's data, the number of RJ departures scheduled for the fourth quarter will be 21 percent less than last year. The number of mainline departures is also projected to drop, but by only 0.4 percent.

American Airlines, which has its home base in Dallas, has picked up some of the slack in the wake of Delta's departure. American Eagle now has 29.5 percent of the regional market in Dallas - up 7.9 percent from last year.

Atlanta

Delta's route restructuring earlier this year has held down regional growth to 0.4 percent at Atlanta Hartsfield-Jackson International Airport. The largest carrier in Atlanta, ASA, did increase its market share by 3 percent to 25.6 percent of 2005's scheduled regional flights, according to BACK's data analysis. In the fourth quarter, all RJ traffic is expected to grow by nearly 20 percent over the fourth quarter 2004. In Delta's new schedules, its other Delta Connection carriers are making more flights into Atlanta.

Los Angeles

Regional traffic increased by 1.1 percent at LAX in 2005 over 2004. SkyWest, flying for United, is again the largest regional carrier with 17.2 percent of the market share. Its market share increased by 0.5 percent over last year, according to BACK's data. However, in the fourth quarter the number of RJ flights is projected to decrease by 1.6 percent to 5,656 flights. LAX has the smallest penetration of the top airports by RJs.

LAX is the only airport among the top five that reported a growth in prop-powered traffic. The number of prop flights scheduled for the fourth quarter is up 4.6 percent over the same period last year.

>>Contacts: John Weber and Frederick Roe, BACK Aviation Solutions, (203) 752-2000.<<

Top Regional Carriers At The Top Five U.S. Airports
Airport Regional Flights Largest Regional Carrier Market Share
1. Chicago O'Hare
46.5%
American Eagle
18.8%
2. Denver
40.4%
United Express/SkyWest
16.5%
3. Dallas-Fort Worth
33.7%
American Eagle
29.5%
4. Atlanta
31.5%
Atlantic Southeast Airlines (ASA)
25.6%
5. Los Angeles International
27.5%
United Express/SkyWest
17.2%

Notes: Airports ranked by total departures. Regional fights include both regional jets and turboprops. Market share based on scheduled fourth quarter 2005 flights.

Fleets of Regional Carriers Serving Top Five Busiest Airports
Regional Airline Aircraft
Leased Out
Own
OnLease
Total
OnOrder
Average Age
Average Seats
Total Seats
American Eagle Airlines Saab 340B/340B
0
2
25
27
0
9.8 years
34
918
CRJ 700
0
25
0
25
0
2.5 years
70
1,750
ERJ 135
0
39
0
39
0
5.3 years
37
1,443
ERJ 140
0
59
0
59
0
3.3 years
44
2,596
ERJ 145
10
108
0
108
0
3.3 years
50
5,400
Saab 340B/340B (Stored)
0
45
9
54
0
13.8 years
34
1,836
Atlantic Southeast Airlines (ASA) CRJ 100/200/440
8
51
52
103
17
4.3 years
50
5,150
ATR 72-100/200
0
4
8
12
0
12.2 years
66
792
EMB 120 Brasilia (Stored)
0
15
0
15
0
14.3 years
30
450
CRJ 700
0
35
0
35
0
1.9 years
70
2,450
SkyWest Airlines EMB 120 Brasilia
0
20
49
69
0
10.2 years
30
2,070
CRJ 100/200/440
0
32
93
125
5
4 years
50
6,250
CRJ 700
0
9
27
36
16
0.9 years
70
2,520
EMB 120 Brasilia (Stored)
0
0
4
4
0
15.7 years
30
120
Fleets as of Sept. 12, 2005.

Top 5 Destination Markets From Top 5 Busiest Airports
Busiest Airport: Dominant Regional Carrier Top Five Destinations
Adjusted Number of Passengers
Average Fare
1. Chicago O'Hare: American Eagle
1. Columbus, Ohio
11,020
$98.62
2. Nashville, Tenn.
10,270
$84.52
3. Cleveland, Ohio
9,700
$91.85
4. Cincinnati, Ohio
7,220
$143.09
5. Pittsburgh, Pa.
6,540
$149.88
2. Denver: SkyWest
1. Salt Lake City, Utah
3,380%
$142.44
2. Tucson, Ariz.
2,110
$159.27
3. San Antonio, Texas
2,020
$230.84
4. St. Louis, Mo.
1,770
$172.07
5. Los Angeles, Calif.
1,180
$203.16
3. Dallas-Fort Worth: American Eagle
1. Houston, Texas
14,240
$85.89
2. Little Rock, Ark.
7,740
$86.40
3. Cleveland, Ohio
5,890
$236.29
4. Baton Rouge, La.
5,700
$131.52
5. Memphis, Tenn.
5,580
$195.21
4. Atlanta: Atlantic Southeast (ASA)
1. Houston, Texas
5,770
$148.02
2. Fayetteville, Ark.
5,430
$198.71
3. Myrtle Beach, S.C.
4,130
$134.31
4. Newport News, Va.
4,120
$109.93
5. Harrisburg, Pa.
4,000
$215.39
5. Los Angeles International: SkyWest
1. Sacramento, Calif.
3,670
$93.51
2. San Francisco, Calif.
3,510
$87.93
3. Salt Lake City, Utah
1,600
$98.00
4. Colorado Springs, Colo.
400
$199.16
5. Phoenix, Ariz.
350
$79.68

Notes: Adjusted number of passengers based on first quarter 2005 scheduled flights. Average fares are based a ODIA ticket sample, which is based on one-way tickets, frequent flyer, and includes taxes and fees