The regional jet has the shallowest penetration rate in the South American regional aircraft market than any other major world market.

There are 18 regional jets in the active fleet of 261 aircraft flown by more than 50 carriers. There are only six carriers that fly RJs and Icaro Express has the largest fleet with four Fokker 28s. This minimal RJ activity is on the same continent where Brazil's Embraer [ERJ] builds its RJs.

By contrast, in both the United States and in Europe more than half of the regional fleets are composed of RJs. In Asia, about one-third (98) of the 301 airplanes flown by 16 different carriers in nine nations are RJs. There are 25 RJs on order in Asia while just one is on order in all of South America.

The regional operators are highly fragmented with more than 50 carriers - the largest being Argentina's Lade with 14 turboprops and two Fokker 28s (see table next page.)

Commuter carriers, not regional airlines, would be a better description of the South American market. "All the routes are short distances. They are hop, skip and a jump. There are very few long trips," said Frederick Roe, an analyst at BACK Aviation Solutions. BACK prepared an exclusive statistical profile of the South American market for Regional Aviation News. Very few of the commuter routes cross an international border, and, if they do, these routes are just into a neighboring country.

The medium trip length for South America's four piston planes and the 246 turboprops is 170 miles. The medium RJ trip stage length is 312 miles - the bottom-rung for an efficient RJ route. The RJs have not been deployed on routes that have the best economics, Roe noted.

There are only two regional carriers are all-jet carriers serving South American cities - Copa Airlines and Air Caraibes. Copa serves South America, but is it a Panamanian airline, and Air Caraibes is based in Pointe-a-Pitre on the Caribbean island of Guadeloupe.

South America's topography of the Amazon and its vast rainforests and the Andes would seemingly foster air travel over highways or trains, but its air traffic growth lags behind the global average, according to a recent market analysis by Unisys R2A. Most countries still have national carriers for international flights. South America, with a limited number of free-trade zones, has not adopted an open border concept similar to the European Union. Long periods of political and economic instability created an environment that has hampered the development of the airline industry on the continent.

In some cases, Roe said, airlines are leap-frogging technological development as carriers are skipping RJs and going straight to narrow-body aircraft. In Brazil, for example, commuter carriers fly only along the Atlantic Coast and a short distance inland. However, if you were to overlay the route map for GOL [GOL], you can see the four-year-old low-fare carrier is flying Boeing [BA] 737s to numerous points, including Brasilia and far inland cities. GOL in four years has captured 29 percent of Brazil's domestic traffic.

South America's regional fleet is old - and getting older. All aircraft types - piston-powered, turboprops and RJs - are older than their counterparts anywhere else in the world. Roe noted that in the last two years, the average fleet has aged by almost a decade as the carriers shed newer aircraft. The six operators of RJs have shed relatively new Bombardier [BBD] CRJs while holding onto Fokker 28s and ERJ 145s. Only two new planes are on order, an Embraer 190 for Tame Ecuador and a PZL- Mielec M-28, a turboprop, for Air Guyane.

Of the top 10 aircraft types flow in South America, which account for 77 percent of the fleet, only the ATR is still being built.

>>Contact: Frederick Roe, BACK Aviation Solutions, (203) 752-2000.<<