Study Could Steer the RJ Issue Away From Pilots

It's time for a rational discussion of restrictions on regional jets.
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Next Wednesday,

GKMG Consultants

in Washington, D.C., will release a study entitled "Proposition RJ: An Alliance to Enhance Competition." The study, which is endorsed by a coalition of communities and airport authorities that was formed earlier this year, will seek to provide rational, research-based reasons why regional jet service in the United States should be expanded.

From a passenger perspective, one of the most difficult problems affecting air travel today is the lack of efficient and reasonably priced air travel from many smaller communities. After deregulation and the airlines' creation of the mega hub and spoke systems, many smaller communities, such as Fargo, N.D., Sioux Falls, S.D., and Burlington, Vt., saw their access to air travel diminish dramatically. In some cases, entire regions have been completely cut off from affordable air travel.

For example, until last year, when

UAL's

(UAL) - Get Report

United Airlines

entered the market with its regional jet service, air passengers in Chattanooga were basically at the mercy of

Atlantic Southeast Airlines

ASAI is now a wholly owed subsidiary of

Delta Air Lines

(DAL) - Get Report

. Chattanooga is just one of many smaller cities in the U.S. that, because of its size or its geographical location, does not hit the radar screen in terms of mainline airline expansion.

However, Chattanooga is a perfect location for regional jet expansion. And Chattanooga is a member of the Proposition RJ coalition.

On routes where a major airline cannot justify a 737, the regional jet has proved a hit with both airline CFOs and passengers. Unlike their noisy turbo-prop cousins, the regional jets are quieter, and passengers perceive them as being safer. Last week, Traveling With Wings

focused on

Comair

(COMR)

, and its success in using the regional jet exclusively.

Delta Air Lines, Comair's mainline partner, has no restrictions on the number of regional jets Comair can fly on behalf of the airline -- which is the main reason Comair has enjoyed such a successful period of growth. On the flip side of the coin, the regional-jet feed that Comair provides Delta has actually increased the number of Delta's mainline passengers -- and allowed Delta to use its larger aircraft to make more money on other routes. So both sides have won financially. And passengers have won as a result.

This is not the case, though, with most of the major airlines -- and this is one of the main issues Proposition RJ seeks to address.

The main impediment to unrestricted growth of the regional jet in the United States is a little contract item known as the "scope clause." Scope clauses, found in contracts between airlines and pilots, dictate who will fly what aircraft and when. Unlike the situation with Delta and Comair, most major airlines are restricted to the number of smaller jets that either it or its regional partners can fly on its behalf.

The study that GKMG is preparing to release will seek to show that this restriction of airline service is not advantageous to the airline or its pilots, because it effectively restricts the overall growth of the industry. Most pilot groups and union officials have fought the use of regional jets, claiming that they were a threat to their own job security. But the study, a summary of which Traveling With Wings has reviewed, will show that this is not the case. Seldom does a regional jet replace what would be considered an opportunity for mainline flying. Rather, the regional jet supplements the existing route structure by providing additional feed into the system.

From a passenger viewpoint, it is all about access, according to William Swelbar, the managing director of GKMG. On Friday, Swelbar said that "the current limitations on regional-jet deployment mean that not all communities that could support air service are getting it." He went on to say, "We want to ensure that a community that can support air service is given the opportunity to have access to that air service."

Preliminary figures from the study indicate that as many as 1,000 additional city pairs, or routes, could be added if there were no restrictions on the amount of regional jet growth.

That's a lot of Fargo, N.D.s.

Traveling With Wings thinks it is time for the issue of regional jets to be discussed from this approach: rationally -- and backed up by hard data.

As it stands, the whole issue borders on restraint of trade. If the

Department of Justice

wants to sue

AMR's

(AMR)

American Airlines

over supposed predatory practices against smaller carriers, what about the fact that communities around the U.S. are being deprived of air service -- air service that could be profitable to the airlines and advantageous to passengers -- simply because of restrictions in pilot-management contracts?

Holly Hegeman, based in Dallas, pilots the Wing Tips column for TheStreet.com. At time of publication, Hegeman held no positions in stocks discussed in this column, although holdings can change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. You can usually find Hegeman, publisher of PlaneBusiness Banter, buzzing around her airline industry Web site at

www.planebusiness.com. While she cannot provide investment advice or recommendations, she welcomes your feedback at

hhegeman@planebusiness.com.