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Wednesday, May 17, 2000

Small-, medium-size airports turn to jets
Business is booming for planes that are more efficient, quicker than turboprops
By David Sharp
Associated Press
PORTLAND, Maine - The days of taking a noisy prop airplane to Washington three times a month are over for attorney George Isaacson. He now flies on a faster, quieter jet that allows him to conduct business and converse without yelling. Best of all, it's nonstop.
   "The jets that they're using - it looks like something a presidential candidate and his entourage would be flying," he said.
   Regional jets like the Bombardier CRJ200 traveling between Portland and Washington Dulles International Airport mark a breakthrough for small- and medium-sized airports that cannot fill large jets on key routes. The planes are faster, more efficient and more pleasant than prop planes, and they are a rapidly-growing part of the airline industry.
   The regional jet business didn't exist less than a decade ago, but now it accounts for 11 percent of daily domestic jet departures, said Bill Swelbar, managing director of GKMG Consulting Services Inc. in Washington.
   The number of regional jets in the United States has swelled from just 29 in 1993 to a projected 560 by year's end, according to the Regional Airline Association. The Federal Aviation Administration predicts that number will triple over the next 10 years.
   The growth can be seen in places like Portland, where there was no jet service to Washington until United Express brought in regional jets. Now, Continental Express and Delta Air Lines are seeking to offer regional jet flights to New York. Regional jets also serve Detroit and Cleveland.
   (At Corpus Christi International Airport, American Eagle replaced three of its eight turboprop flights with jets in April. ASA Delta Connection began two daily nonstop flights to Atlanta in May 1999, flying regional jets.
   (Continental Express added a regional jet to its Houston-to-Corpus Christi link in May 1999, the first addition of a new jet to the route by the airline since 1997. The changes brought the airline up to six daily jet departures and five daily turboprop departures for the regional subsidiary for Continental Airlines. Southwest Airlines operates eight flights a day on Boeing 737s to Houston Hobby. )
   At the Portland airport, serving a region of only 275,000 people, the 50-seat regional jets are a welcome addition on routes that otherwise would be relegated to smaller propeller-driven aircraft.
   "It is so hard to fill a jet with 120 to 150 seats every single day, three times a day. So this is the opportunity to still have the jet service," said Jeff Schultes, the airport manager.
   That was exactly the vision of David Siebenburgen, who was head of the Cincinnati-based regional airline Comair Inc. when he began asking aircraft makers to design a small passenger jet. At the time, conventional wisdom was that small jets with only 50 seats would be too expensive to operate.
   Siebenburgen talked the Brazilian aircraft maker Embraer into designing such an aircraft, but the deal fell through. Comair then agreed to buy 20 Canadair Regional Jets from the Canadian company Bombardier Aerospace in 1992. Comair went into the regional jet business a year later.
   "People thought we were crazy. They thought we were going to fail. Lots of our shareholders sold their stock," said Siebenburgen, now president and chief executive officer of Delta Connection, which coordinates Delta's regional carriers, including Comair. "Lots of others bought our stock and became believers."
   With the new jet service, Comair went from hauling between 1 million and 2 million passengers a year to more than 8 million, and it expanded the number of cities it served from 25 to nearly 100. By year's end, its main hub in Cincinnati will consist entirely of regional jets.
   Nationwide, the number of daily regional jet departures grew from 69 in 1994 to 2,419 in the first quarter of 2000, and the number of cities served grew from 15 in 1993 to 159 last year, Swelbar said. The Proposition RJ Coalition, whose founding members include 14 airports and airport authorities seeking to promote regional jets, has identified 1,450 unserved markets that could benefit from the jets, he said.
   While regional jet service is enjoying phenomenal growth, it has some limitations, including pilots' union agreements with major airlines that curb the number of smaller aircraft that can be operated, said Candace Browning, an airline analyst for Merrill Lynch in New York. "It's never going to take over the bread-and-butter large jet airline business," she said.
   Nonetheless, the market is hot enough for plane manufacturers including Embraer and Fairchild Aerospace of Texas to begin producing regional jet models. Bombardier (pronounced Bom-BAR'-dee-ay), meanwhile, is now building a 70-seat jet and researching the possibility of a 90-seat plane.
   "Comair certainly proved the effectiveness of this aircraft in terms of operations and in terms of the financial aspects. They took a big risk in doing so and have reaped the benefits in doing so," said Debby McElroy, spokeswoman for the Regional Airline


Business writer Andrea Jares contributed to this report. She can be reached at 886-3678 or by e-mail at jaresa@caller.com

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