PAUL LEWIS / WASHINGTON DC
Chautauqua Airlines has become the latest US regional carrier to announce plans for an initial public offering (IPO)following quickly on the heels of Continental ExpressJet and Express I. The carrier hopes to raise $85 million to allow it to further expand its feeder services with America West Airlines, American Airlines and US Airways and seek possible new partnerships.
The privately owned company, the tenth largest regional carrier in the USA, was the fastest expanding US airline with annual growth of 87% before 11 September. Since his appointment as chief executive in 1999, Bryan Bedford has forged new regional partnerships with American - formerly through TWA - and America West, and by next year will have transferred all of its operating agreements to financially more stable fixed-fee flying.
Chautauqua last year generated revenues of $239 million and a net profit of $6 million, despite a $2.4 million loss in the final quarter of the year. This compares to $147 million revenue and a $2.5 million net profit the previous year.
Chautauqua has continued to take delivery of new Embraer regional jets since September at roughly two aircraft per month, expanding its fleet of 38 ERJ-145s and eight 44-seat ERJ-140s. Growth plans call for 44 more jets to be added by 2007, including seven ERJ-140s already on order for delivery over the next eight months.
The additional aircraft will replace ERJ-145s in service with American Connection, which will then be transferred to America West Express, expanding its operation to 12 aircraft. The remaining 37 aircraft are held on option to be exercised by 2004. Chautauqua's future growth at American and US Airways, however, is subject to the two mainline carriers amending contentious scope-clause agreements with their pilot unions.
In the face of a 25-40% decline in turboprop flying and pressure from mainline carriers to reduce capacity in order to remain within scope clause limits, Chautauqua has withdrawn 13 of its Saab 340s.
Source: Flight International
