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Monday, November 17, 2003

Regional Jets 'Critical' In U.S. Airlines' Return To Profitability

U.S.-based operators of regional jets (RJs) now serve 240 North American airports, with 15 receiving first-ever schedules during the first nine months of 2003, according to an analysis of the regional airline schedule announcements by the Regional Air Service Initiative (RASI).

The expansion of RJ schedules at already-served communities also grew rapidly during the first nine months of 2003. The number of different airline/hub options available at these airports increased by nearly 18 percent as regional carriers added a significant number of new nonstop schedule options to previously served points. More than 60 percent of all RJ route announcements made between January and September were for first-ever nonstop flights.

"As the legacy majors restructure, regional carriers continue to expand the choice of air service available at American cities, focusing on adding new market-pairs, the majority of which were never served nonstop before," said Doug Abbey, executive director of RASI. "Not surprisingly, the number of routes where RJs replaced major carrier jets accounted for only a small portion of all new service. This confirms that small capacity jets are critical if the U.S. airline industry is ever to return to profitable growth."

In the period studied, Jan. 1 through Sept. 30, U.S. regional carriers announced new RJ schedules on 137 airport-pairs -- a rate of three-and-a-half per week. While most of the routes were hub-based, the small jet industry also expanded point-to-point service options. Examples of new routes included: Baltimore-Milwaukee (AirTran [NYSE: AAI] Jet Connect), Columbus-Fort Myers (Delta [NYSE: DAL] Connection), Portland-Santa Barbara (Horizon Air), and Raleigh/Durham-Nassau, Bahamas (American Eagle Airlines).

First-ever nonstop schedules represented the largest category of regional jet service announcements in the first nine months of 2003, accounting for more than one-half of all routes added. The second largest group, termed "seasonal nonstop," represented 15 percent of all new RJ service, followed by "mainline supplement" with 13 percent, and "turboprop upgrade/replacement" with 7 percent, respectively.

Turbofan aircraft also were instrumental in expanding the scope of regional airline service options by flying increasingly longer stages. The average new route was 710 miles in length. Of the total, nearly one-half of all RJ service announcements in the first nine months of 2003 were on routes of 750 miles or longer. Eighteen of the new routes exceeded 1,000 miles, including the longest -- Los Angeles-Fayetteville, Ark., at 1,379 miles.

During the nine months studied, first-ever regional jet service was introduced to 15 airports, increasing the total number of points in North America served by RJs to 240. These new destinations were generally smaller in population and had traditionally relied on turboprop aircraft schedules in the past, including Eureka/Arcata, Calif.; Waterloo, Iowa; Lynchburg, Va.; Meridian, Miss.; State College, Pa.; and Pellston, Mich. Secondary markets in Mexico and Canada -- Aguascalientes, Cuidad del Carmen, Morelia, Manzanillo, and Fredericton -- also figured prominently in RJ air service expansion during the past nine months, the RASI analysis found.

Among U.S. RJ hubs operating for at least one year, Houston-Intercontinental (operated by Continental [NYSE: CAL] Express) achieved the greatest absolute expansion in the number of RJ spokes served, with 20 new markets announced between January and September. This was followed by Atlanta (Delta Connection) with 18, Washington-National (US Airways [Nasdaq: UAIR] Express) with 15, and Dallas/Ft. Worth (Delta Connection) with 13. During this period, Atlanta became the second U.S. RJ hub after Cincinnati to support more than 100 nonstop destinations.

In terms of percentage growth during 2003, regional hubs at Washington-National (US Airways Express) grew from 10 to 25 nonstop RJ destinations -- a 150 percent increase -- followed by Philadelphia (also US Airways Express) with 58 percent, Orlando (Delta Connection) with 53 percent, and Denver (Frontier [Nasdaq: FRNT] Jetexpress) with 40 percent.

>>Contact: Doug Abbey, AvStat Assoc., 202-338-1727, email: AvStatDC@aol.com; Kelly Murphy, Emerald Media, 703-716-0503, email: USEmerald@aol.com; Web: http://www.regionalairservice.org.<<