Projections for 2006 show stage lengths doubled in a decade and Delta Connection carriers will account for more than a quarter of all regional available seat miles (ASMs) by year's end, according to a BACK Aviation Solutions analysis commissioned for Regional Aviation News.

The top 20 regionals accounted for 96 percent of industry passengers and flew 98.5 percent of regional revenue passenger miles (RPMs) during the first quarter, according to the Regional Airline Association (RAA), which released its statistics last week.

Meanwhile, the U.S. Department of Transportation Bureau of Transportation Statistics (BTS) reported the seven largest regionals experienced a 9.1 percent profit margin for the first quarter of 2006, besting both the seven network carriers and low cost carriers (LCCs) the organization tracks. Network carriers narrowed their collective loss during the quarter to a 4.2 percent loss margin and LCCs posted a 7.4 percent profit margin (without ATA).

Passenger trip length is increasingly gaining interest, as airlines such as Continental (CAL) suggest that RJs work best in the two to three-hour range maximum. Continental Chairman and CEO Larry Kellner said recently, "As we try to go beyond that, we worry that the passenger does not have the capacity to do that." (RAN, June 19)

Continental's regional stage length has grown in the past several years. ExpressJet (XJT), operating as Continental Express, is expected by the end of 2006 to lead the industry in terms of stage length at 550 miles, a flight of about 2 hours. Indeed, average stage length seems to have nearly doubled in the last decade.

BACK Aviation Solutions forecasts that ExpressJet will finish first in 2006 in terms of ASMs with SkyWest (SKYW), American Eagle and Atlantic Southeast following close behind.

By year-end, Delta (DALQ) will account for more than a quarter of regional ASMS at 28.37 percent, followed by United (UAUA) at 16.96 percent, American (AMR) at 16.15 percent, and Continental at 15.15 percent. US Airways (LLC) will account for 15.10 percent, while Northwest (NWACQ) will have the fewest in the industry at 8.28 percent.

The regional carrier group tracked by BTS reported a 9.1 percent profit margin in the first quarter of 2006, up 0.6 percent from the 8.5 percent profit margin reported in the first quarter of 2005. The seven regionals reported a $213 million operating profit during the first quarter.

BTS Reports

The top operating profit margin was reported by Atlantic Southeast followed by Pinnacle (PNCL) and American Eagle.

Regionals also took the highest spots in terms of unit revenues in the first quarter at 15.4 cents per ASM (RASM) compared with 14.4 cents for network carriers and 9.5 cents for Low Cost Carriers (LCCs). American Eagle and Comair topped the list for highest unit revenues at 16.8 cents and 16.7 cents, respectively.

Comair posted the highest unit cost (CASM) for the industry at 16.4 cents, while ExpressJet reported the lowest first quarter unit costs at 12.2 cents, compared to Mesa's (MESA) 12.7 cents and SkyWest's 14.4 cents. American Eagle posted a 15 cent unit cost for the quarter.

Although regional domestic passenger yield dropped in comparison to the 2005 period, the group still reported the highest average yield at 20.6 cents per RPM.

RAA Reports

Regionals carried 35,457,892 passengers during the first quarter of 2006, a 4.6 percent increase over the 2005 period, according to RAA. During this period, the industry flew 15.9 billion RPMs, a 10.1 percent increase over the year-ago-period. At the same time, ASMs were up 2.2 percent to 22.1 billion.

Industry departures were down 2.6 percent to 1.2 million, while load factor was up 5.1 points to 71.8 percent. Passengers per departure experienced a 7.3 percent increase to 28.8 percent. The average passenger trip length increased 5.3 percent, to 449.1 miles.

SkyWest, serving as a Delta Connection and United Express, was the largest carrier for the period, said RAA, accounting for 12.6 percent of industry passengers at 4.4 million and 13.2 percent of industry RPMs at 2.1 billion. It was followed by American Eagle, Continental Express carrier ExpressJet, Mesa, and Atlantic Southeast in the top five spots. GoJet was the smallest, accounting for 0.6 percent of passengers at 221,746 and 0.8 percent of RPMs at 123,478.

Contacts: Frederick Roe, BACK Aviation Solutions, (203)752-2000; BTS, http://www.bts.gov; RAA, (202)367-1170