CAROLE SHIFRIN SAO PAULO AND DAVID FIELD WASHINGTON
The regional jet (RJ) is becoming a strategic weapon for the US majors as they reduce their own mainline system capacity and park older aircraft.
"So far, RJs have been an offensive weapon," says Byron Bohlman, RJ manufacturer Embraer's vice-president for marketing analysis. "I think we will now see RJs being used for the first time as a defensive weapon where management makes the strategic decision to protect their position in key markets while also reducing capacity."
In sharp contrast to the crisis after the Gulf War, when RJs were not available, around 800 are now flying in North America, Bohlman says. Reflecting a more mainstream role, Embraer has changed the designations of the new aircraft family and dropped the RJ; the ERJ 170, for instance, is now simply the Embraer 170.
Mauricio Botelho, Embraer's president, speaking at the roll-out of the first 70-seat Embraer 170 in Sao Paulo, says the name change reflects his belief that the new aircraft increasingly will be flown by major airlines as substitutes for older, larger jets, not just by regionals. He also announced a fourth aircraft in its new $1 billion family of 70-108 seaters, the 78-seat Embraer 175.
Bombardier programme strategy director Barry MacKinnon also foresees that newer 60- and 70-seat regional jets will increase the trend as RJs replace aircraft in the 50-100 seat range as carriers retire DC-9 series equipment.
UBS Warburg analyst Jamie Baker thinks majors will seek to extract savings from their regional partners, asking for lower departure rates. He sees cuts in the region of 5-10% being negotiated. Of the regionals, only Mesa has confirmed that it has been approached for such reductions by its senior partners, in this case America West and US Airways.
At US Airways, where the issues of scope and RJ flying have been more contentious than at most, the Air Line Pilots Association in mid-November offered to let the carrier more than double its RJ fleet from 70 to 189 in return for a no-furlough promise. The offer is a major step by the union, but the airline has said it wants to fly more than 200 RJs and use them on trunk routes.
Meanwhile the RJ coalition backed by the Regional Airline Association has become active after a five-month standstill forced on it by the strike at Comair, the Delta Connection carrier. Now called the Regional Air Service Initiative, the group's major presence is a highly detailed web site created by Doug Abbey of AvStat Associates that covers issues of scope and service.
Source: Airline Business
