Regional airline traffic figures for January generally continued to show solid growth figures for the new year, particularly in available seat miles (ASMs) resulting from the continuing acquisition of new aircraft as well as expanded route structures and from an even sharper increase in passenger traffic, resulting in higher revenue passenger miles (RPMs) and increased load factors.

ExpressJet, which is paid by Continental based on block hours flown, increased its block hours by 1.6 percent, from 41,998 in January 2002 to 42,650 last month. ExpressJet reported a 25.5 percent growth in RPMs against a 20.9 percent growth in ASMs, slightly improving its load factor by 2.1percent.

However, the critical item for ExpressJet was the growth in block hours, which increased its earning capacity.

The block hour growth is expected to increase to 5 percent for the first quarter of 2003 because of the addition of 12 new regional jets during the quarter.

Atlantic Coast Airline (ACA), which flies under fixed-fee-for-departure contracts for Delta and United, had a 27.9 percent growth in RPMs and a 6.1 percent growth in ASMs, giving it a 10.6 percent increase in load factor. However, its significant statistic was the increase in ASMs based on its fee for departure contract, since that is the primary source of revenue. The 6.1 percent increase in ASMs is expected to increase to 7 percent through the first quarter. ACA also had a 12.5 percent increase in block hours, from 32,936 in January 2002 to 37,056 last month. Unfortunately, ACA is still working under its 2002 agreement with United, its largest user.

It is generally expected that United will affirm its contract with ACA prior to the end of this quarter, which in turn should trigger a general recovery of regional airline stocks. The affirmation by United should result in orders for more, and perhaps larger, regional jets, which produce even greater growth in ASMs. ACA is already scheduled to receive 35 CRJs this year and 12 next year for operations with United. The growth of RJ fleets serving United, as well as the recently announced approval for US Airways to up its RJ fleets, should cause a general loosening of scope clauses that are artificially holding the major carriers back.

Mesa Air Group also had a large capacity growth in January, with ASMs up 37 percent over January 2002, a significant figure since roughly 75 percent of Mesa's earnings come from fixed-fee/cost-plus contracts. RPMs were up 37 percent for the month. A large order for RJs that will more than double its fleet will continue to increase ASMs throughout the next two years. Current firm orders will increase the RJ fleet by 52.9 percent, from 68 as Jan. 1 to 104 by the end of fiscal year 2004. Of the aircraft on order, 40 will be the larger RJs with up to 80 seats, producing more earnings per aircraft.

While most of the carriers reporting their traffic figures for January showed positive figures, a few fell into the negative column. Horizon Air reported strong double- digit growth, with demand exceeding capacity (36.5 percent vs. 22.1 percent). However, its 55 percent load factor dropped below the 58.1 percent load factor of a year ago, for a minus 3.1 points. Comair reported a faster growth in capacity (41 percent) than traffic demand (37.6 percent), giving it a lower load factor of 57.7 percent last month vs. 66.6 percent in January 2002.

US Airways Express carriers (Allegheny, Piedmont and PSA) continue to be hurt by guilt by association, recording negative growth figures in RPMs, ASMs and passengers carried. RPMs dropped 3.9 percent, while ASMs dropped 4.4 percent and passenger boardings dropped 6.3 percent. Only load factors increased, going from 43.1 percent to 43.4 percent. (Note: Traffic data provided by individual airlines. In some cases enplanement figures are not provided.)