U.S. REGIONAL AIRLINES

U.S. REGIONAL AIRLINES

C/R AIRLINE NEWS EXECUTIVE FORUMNov. 1, 1999, Alexandria, VA USA

“The Regional Jet Service Debate”Debby McElroy, Vice PresidentDeborah_McElroy@dc.sba.comRegional Airline Association

U.S. REGIONAL AIRLINES

Recent Trends

Growth Projections

Constraints to Growth

REGIONAL AIRLINES

In 1998 there were 97 U.S. regional airlines

17 of the top 20 regional airlines have been providing scheduled service for over 10 years.

RECENT TRENDS

Number of regional airlines declined 57% since 1978

0

50

100

150

200

250

1978 1988 1997 1998

ENPLANEMENTS

Regional Passenger T raffic, 1970--1998Regional Passenger T raffic, 1970--1998

REGIONAL AIRLINE PASSENGERS

60 - 65% are business travelersPrefer boarding via loading bridgesDesire plane-side baggage checkingDesire regional and major partners

have adjacent gate areas

CODE SHARING

53 code-sharing agreements 13 regionals owned by

majors/nationals 3 partially owned by

majors 37 marketing

agreements Code-sharing

regionals transport 98 percent of industry passengers

OwnedCode-shareIndependent

AIRPORTS SERVED 1984-99

0

100

200

300

400

500

600

700

800

900

1984 1989 1994 1999

48 statesU.S.N. Amer.

AIRPORTS SERVED

773 in North America

717 in United States462 in 48 States288 airports in the

48 states (62%) are served exclusively by regional airlines

AIRCRAFT

Passenger Aircraft Operated, 1970--1998Passenger Aircraft Operated, 1970--1998

U.S. REGIONAL FLEET

Dis tribution of Fleet by Engine Type -- 1998Dis tribution of Fleet by Engine Type -- 1998

Total Fleet -- 2,150

AVERAGE SEATS PER AIRCRAFT

0

5

10

15

20

25

30

1978 1988 1993 1998

REGIONAL JETS

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100

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300

350

400

1996 1997 1998 Sep-99

Jets

REGIONAL JETS

0

50

100

150

200

250

300

1996 1997 1998 Sep-99

30 seat50 seat>50 seat

GROWTH PROJECTIONS

US Fleet Forecas tUS Fleet Forecas t

SOURCES OF GROWTH

Supplemental service with major partnerNew city pairsIncreased service to existing markets

(increased frequency/larger aircraft)Route transfers from major partners30 - 50 seat regional aircraft (jets and

turboprops) may be exempt from slot restrictions for service to cities with fewer than 2 million annual enplanements (FAA Reauthorization legislation)

REGIONAL JETS

Orders for 537 aircraft (as of September 30, 1999)

113 ERJ 135 55 Fairchild 328 30 Fairchild 428 52 ERJ 145 197 Bombardier RJ 82 Bombardier RJ700 8 Avro 85

REGIONAL JETS

“Options” for 804 aircraft 165 ERJ 135 95 Fairchild 328/ Fairchild 428 159 ERJ 145 257 Bombardier RJ 128 Bombardier RJ700

FUTURE PROJECTIONS

Fewer regional airlinesNumber of cities served

continues to declineLarger, faster aircraft

REGIONAL AIRLINE FLEET 2004?

Jets 44%

Piston 12%

Turboprop44%

CONSTRAINTS TO GROWTH

Constrained ATC System

Airport Capacity Limitations

Labor IssuesRegulatory CostsEnvironmental

Issues

LABOR ISSUES

Scope ClausesUnion

ContractsPilot HiringShortage of

Mechanics