By Rebecca Rayko,
AWN Editor
SAN ANTONIO, Texas - The Regional Airline Association marked its 25th anniversary at this year's annual meeting in San Antonio on May 1-3.
Over those 25 years, the regional airline industry has evolved dramatically from the six-seat piston twins of the 1970s-era commuters to the state-of-the-art regional jets of today, now boasting capacity of 90 seats and beyond.
In celebrating this milestone year, a number of new trends emerged at RAA 2000, along with a number of new faces. The RAA welcomed new president Debby McElroy, who succeeded longtime president Walt Coleman, who retired earlier this year. Also making his first official industry appearance was Chuck Pieper, the new chairman and CEO of Fairchild Aerospace.
The popularity of the regional jet is showing no signs of slowing. In fact, the manufacturers spoke confidently about the promising 90+ seat market. Joining the Big 3 RJ makers at the convention was a contingency from Boeing, which was there to tout the 717.
Manufacturers say they are also seeing signs of change in the way regional aircraft will be ordered. Expect to see more orders along the lines of the $10 billion Delta Air Lines mega-order last month (see related story) due to the high demand for regional jets. Future orders for regional aircraft will tend to be in high quantities similar to Delta's order from Bombardier, which was the largest order to date.
The sheer size and dollar value of these large orders puts enormous pressure on the manufacturers to compete, and competition is expected to increase dramatically in the next few years.
This larger scale order trend will be supported by regional air traffic growth, which will continue over the next 20 years. Market developments will also push aircraft requirements even higher than previously predicted, according to a forecast released by Fairchild last week (see related story).
Although there weren't any orders of this magnitude at this year's RAA, there were a handful of orders and leasing deals announced by Embraer, Fairchild, Bombardier, and others (see story).
Another interesting trend at RAA was the introduction of two industry-focused B2B websites. Skyfish.com came to announce its first round of financing and outline its business plan, while aviationX, founded by former Saab Aircraft executives, launched a series of e-commerce tools at RAA (see related story). Both companies revealed interesting ways they plan to differentiate themselves from the numerous aerospace e-commerce ventures that have cropped up in recent months.
Regional airlines, flush with healthy 1999 performances, made a strong showing at RAA. The RAA now has 60 airline members and 388 associate members. Horizon Aviation (Virginia), North-South Airways (Georgia) and Skymark (Washington) joined at this year's convention.
Member airlines in the US continue to record unprecedented growth, last year boarding 78.1 million passengers, up 10% from 1998.
The US regional fleet stands at 2,187 aircraft, and for the first time ever a regional jet (the Bombardier CRJ) took the number-one position as the fleet leader with the most regional lift capacity (14%). Regional jets accounted for 31% of all regional lift in 1999.
For all the growth and economic success the regional jet has brought to this industry segment, the flipside has been labor strife at many of the major airlines with which the regional airlines are partnered. Scope clauses continue to restrict the number and amount of flying done by RJs and could have a dramatic effect on the new, high capacity models (see story).
Most are predicting some sort of movement on the scope clause to occur this year, and manufacturers remain bullish on orders. The major battleground for marketshare will be over the 70- to 90-seat RJs coming into the market over the next 2-3 years.
