    Aviation Competition: Regional Jet Service Yet to Reach Many Small
    Communities (Letter Report, 02/14/2001, GAO/GAO-01-344).

    The increasing numbers of regional jets (RJ) in operation have provided
    U.S. air carriers with opportunities to serve new and existing markets.
    With predominantly 50-seat aircraft, the carriers have initiated service
    to many large and medium-large communities but have provided less
    service to smaller communities. Service to small communities--to which
    the airlines now mostly operate turboprop aircraft--continues to be an
    important concern, because of the uncertainty about whether those
    markets may generate enough passenger traffic and revenue to be
    financially viable to sustain RJ operations. Eventually, smaller RJs may
    let carriers serve those smaller communities economically. Other
    questions also emerge about the impact of how the carriers will use
    their RJs. For example, the airlines could restrict capacity in a market
    by reducing service with larger mainline jets but increasing the number
    of RJ flights in a way that may inhibit entry by new competitors,
    allowing the airlines to charge fares higher than might exist in a more
    competitive market. Additionally, the growth in RJs has clearly
    contributed to an increasing problem with congestion, particularly in
    some locations like New York's LaGuardia Airport. But how the expected
    growth in RJs may continue to contribute to congestion and delay remains
    to be seen. Depending on how events unfold in the near future, these and
    other potential impacts of the airlines' RJ strategies may warrant
    continued oversight.

    --------------------------- Indexing Terms -----------------------------

     REPORTNUM:  GAO-01-344
         TITLE:  Aviation Competition: Regional Jet Service Yet to Reach
    	     Many Small Communities
          DATE:  02/14/2001
       SUBJECT:  Air transportation operations
    	     Airline regulation
    	     Airports
    	     Airline industry
    	     Commercial aviation
    	     Competition
    	     Cost effectiveness analysis
    	     Aircraft

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    GAO-01-344

    A

    Report to the Honorable Olympia J. Snowe, United States Senate

    February 2001 AVI ATI ON COMPETITION Regional Jet Service Yet to Reach Many
    Small Communities

    GAO- 01- 344

    Letter 3 Appendixes Appendix I: Objectives, Scope, and Methodology 36

    Appendix II: Regional Jets: Manufacturers, Characteristics, and Demand 40

    Appendix III: U. S. Cities With Regional Jet Service as of October 2000 48
    Appendix IV: GAO Contacts and Staff Acknowledgments 53 Tabl es Table 1:
    Overview of Restrictions on RJ Operations in Pilot Labor

    Agreements 23 Table 2: Comparison of Delta's and US Airways' RJ Deployment,

    October 2000 25 Table 3: Categories of Service Change 38 Table 4: RJ
    Operating Characteristics 41 Table 5: U. S. RJ Orders, Options, Deliveries,
    and Backlog, by

    Aircraft Type 47 Figures Figure 1: Number of RJs Operated by Major U. S.
    Airlines and Their Regional Affiliates, October 2000 9

    Figure 2: Locations of Cities Served by RJs, October 2000 10 Figure 3: Size
    of Cities Served by RJs, October 2000 11 Figure 4: Number and Population
    Category of Cities Receiving

    RJ Service, by Year 13 Figure 5: RJ Deployment by Service Type Since January
    1997 15 Figure 6: How RJs Expand the “Footprint” of Carriers'
    Hubs 18 Figure 7: RJ Markets Served by Delta Connection Carriers as of

    October 2000 26 Figure 8: RJ Markets Served by US Airways Express Carriers
    as of

    October 2000 27 Figure 9: Bombardier CRJ200 42 Figure 10: Bombardier CRJ700
    42 Figure 11: Embraer ERJ- 135 43 Figure 12: Embraer ERJ- 145 43 Figure 13:
    Embraer ERJ- 170 44 Figure 14: Fairchild Dornier 328Jet 45 Figure 15:
    Fairchild Dornier 728Jet 46

    Abbreviations

    AIR- 21 Aviation Investment and Reform Act for the 21st Century, P. L. 106-
    181 DOT U. S. Department of Transportation FAA Federal Aviation
    Administration MSA metropolitan statistical area O& D origin and destination
    RJ regional jet

    Lett er

    February 14, 2001 The Honorable Olympia J. Snowe United States Senate

    Dear Senator Snowe: Many aviation experts view U. S. airlines' growing use
    of small “regional jets” 1 as a revolutionary development that
    is significantly changing the aviation marketplace. Because jets are
    generally faster, quieter, smoother, and perceived to be safer than
    turboprop aircraft, the public tends to prefer travel by jet. Additionally,
    because regional jets (typically seating between

    32 and 70 passengers) tend to have lower operating costs than larger
    “mainline” jets (e. g., the Boeing 737, which may seat 110
    passengers or more), expectations rose that air carriers would provide
    regional jet service to smaller communities that could not profitably
    support mainline service. And because regional jets can fly farther than
    turboprop aircraft, their use holds the potential for small communities to
    obtain new service on longer routes to more distant airports- thereby
    perhaps offering new

    service options to those small communities. The Wendell H. Ford Aviation
    Investment and Reform Act for the 21st Century (AIR- 21) further fueled
    small communities' expectations of improved air service through specific
    provisions that eased certain restrictions at New York's LaGuardia Airport
    to encourage air carriers to serve smaller communities with regional jets. 2
    To address your concerns about air service to smaller communities, we
    examined how U. S. air carriers are using regional jets and what issues
    surround the carriers' abilities to use these aircraft. Our work focused on

    the following three questions: 1 There is no uniformly accepted definition
    of a regional jet either in the industry or in federal laws and regulations.
    For example, the Wendell H. Ford Aviation Investment and Reform Act for the
    21st Century, P. L. 106- 181, variously defines a regional jet as having a
    maximum seating capacity of “not less than 30 nor more than 75”
    (sec. 210) or “less than 71” (sec. 231). Within the industry,
    “regional jet” is sometimes used to describe larger aircraft,
    such as the Fokker F- 100 (107 seats) and Boeing 717 (106 seats), and older-
    technology aircraft, such as the Fokker F- 28 (69 seats) and BAe 146- 100
    (70- 82 seats). 2 Among other things, AIR- 21 allows the Department of
    Transportation to grant exemptions to existing rules at New York's LaGuardia
    and John F. Kennedy airports and at Chicago's O'Hare airport for carriers
    that provide service with a regional jet to certain small airports as a
    replacement for a turboprop aircraft.

    ? What is the status of regional jet deployment in the United States, and
    how has this service evolved? ? What factors have affected the airlines'
    decisions in deploying regional

    jets? ? What effects have regional jets had on air traffic and airport
    congestion,

    according to published studies and experts in the field? To determine the
    status of the airlines' regional jet service, we analyzed historical airline
    service data, as well as current airline schedule information. Our analysis
    excluded those carriers that do not have regional affiliates that operate
    regional jets. We defined regional jets as newer jet

    aircraft that have been placed into service since 1993 and are designed to
    seat 70 or fewer passengers. In addition, our analysis included only those
    markets that had a minimum of 20 monthly regional jet departures- the
    equivalent of 1 departure per business day. To determine the factors that
    have affected the airlines' deployment of regional jets, we interviewed
    airline and industry officials and reviewed airline, government, and
    consultant documents. To ascertain industry experts' views on the effects of
    regional jets on air traffic and airport congestion, we reviewed studies

    and consulted with Federal Aviation Administration (FAA) and industry
    officials. We conducted our work from March 2000 to February 2001 in
    accordance with generally accepted government auditing standards. Additional
    information on our scope and methodology appears in appendix

    I. Results in Brief As of October 2000, major airlines provided regional jet
    service to 157 U. S.

    cities, only 13 (8 percent) of which were small cities with populations
    under 100, 000. Eight of these small cities received their service in or
    before 1997; the remaining five received regional jet service between 1998
    and

    October 2000. Larger cities (those with populations over 250,000)
    represented 74 percent (115) of the total U. S. cities receiving regional
    jet service. Most of this regional jet service has radiated from the
    carriers' hubs to spoke cities that the carriers were already serving with
    either

    turboprops or mainline jets. Of the markets in which air carriers began
    regional jet service since May 1997, 41 percent were new markets in which
    the regional jet carrier had not previously flown. Air carriers used
    regional jets in these new markets to expand their networks, although
    another carrier may already have been providing service in some of these
    locations. For example, service between Denver and Fargo, North Dakota,
    represented a new market for United Airlines, although Northwest Airlines
    already served Fargo from Minneapolis. The airlines have tended to use

    their regional jets to serve more distant cities (between 350 and 1,200
    miles) that previously were beyond their turboprops' practical operating
    range or had too few passengers to be profitably served by mainline jets.
    Because those more distant cities may have been served only by other
    airlines, regional jets have provided passengers in those cities with

    additional choices among airline networks. Future regional jet deployment
    patterns may change, however, as carriers begin operating other types of
    regional jets- both smaller and larger than the 50- seat aircraft
    predominantly in service today. According to airline officials, regional jet
    deployment strategies are driven

    primarily by efforts to maximize profit, but other carrier- specific factors
    such as labor agreements and network structures have also influenced the
    airlines' decisions. The airlines use complex models- which include data on
    numerous factors such as passenger traffic, operating costs, and various
    competitive considerations- to help determine the most profitable

    markets for regional jet service. In addition, industry officials told us
    that labor contracts- especially those with pilots- have affected the
    airlines' regional jet deployments. The pilot contract for most major U. S.
    airlines includes a provision (the “scope clause”) that limits
    the number and/ or size of the regional jets that the airlines' affiliates
    can operate. These scope clauses differ greatly among the airlines. For
    example, Delta Air Lines' 1996 scope provision is relatively unconstrained,
    restricting the size but not the number of regional jets that can be
    operated. Thus, as of October 2000, Delta's affiliates were flying more than
    160 regional jets. In contrast, US Airways' 1998 contract with its pilots
    limited to 35 the number of regional jets that its affiliates could operate.
    As of October 2000, US Airways'

    regional affiliates were operating 30 such aircraft. Recent contract
    agreements at United and US Airways relaxed some scope clause limits on
    aircraft numbers while generally maintaining limits on aircraft seating
    capacity.

    Regional jets have added to the congestion and delays facing the nation's
    air traffic system and airports, according to published studies and experts
    with whom we spoke. At the same time, however, there is little agreement or
    conclusive evidence as to the extent of their contribution to those
    problems. The key study we reviewed estimated a 31- percent (compounded
    yearly) increase in regional jet traffic between February 1998

    and December 2003, compared with FAA's forecasted 3- percent (compounded
    yearly) increase in mainline jet traffic for the same time period. Experts
    agree that regional jets increase congestion partly because they represent a
    large infusion of aircraft into an already crowded system,

    but opinions vary as to how regional jets' specific flight operating
    characteristics (e. g., how fast they can climb to cruising altitude) may
    contribute to congestion and delays. Experts also agree that air traffic
    congestion often depends on circumstances or procedures in effect at a

    specific location, including the number of aircraft operating there. For
    example, according to officials, the influx of regional jets into the
    Dallas/ Fort Worth International Airport has had little impact on the
    airport's operations to date, but regional jet operations have had a clear
    effect at New York's LaGuardia Airport. Increased congestion at

    LaGuardia- an already congested airport within an extremely congested
    airspace corridor- led FAA to limit aircraft operations there. Given the
    projected growth in the number of regional jets that will be in service over
    the next few years and the likely impact of this growth on the already

    congested air traffic system, experts agree on the need for action to
    address the nation's broader air traffic congestion concerns. Background
    Regional jets (RJ) carry fewer passengers than mainline jets but generally

    travel at similar speeds, cruise at similar altitudes, and require runways
    of about the same length as mainline jets. The most common RJ models in
    service today are 50- passenger aircraft- the Bombardier CRJ100 and CRJ200
    and the Embraer ERJ- 145. Most RJs have a maximum flight range

    between 900 and 1,700 nautical miles. 3 (See app. II for more detailed
    information about these aircraft.) Most RJs are operated by regional
    affiliates of major airlines rather than by the major airlines themselves. 4
    The relationship between the major carrier and the regional carrier can take
    several forms. Some relationships are contractual; for example, United
    Airlines (United) contracts with Atlantic Coast Airlines to fly passengers
    to and from United's hub at Washington

    Dulles International Airport. By contrast, other carriers own all or some of
    their regional affiliates. For example, American Airlines (American) and
    Continental Airlines (Continental) own many of the carriers that operate for
    their regional affiliates, American Eagle and Continental Express. Likewise,
    Delta Air Lines (Delta) purchased two of its regional affiliates,

    Comair and Atlantic Southeast Airlines, in 1999. Major carriers may also 3
    According to the air carriers, the practical limit is much less- about 1,200
    miles. 4 In this report, we refer to all RJs and their operations as those
    of the major airline.

    purchase a partial interest in a regional carrier, as Northwest Airlines
    (Northwest) has done with Mesaba Airlines. RJs are part of a U. S. air
    transportation structure dominated by “hub- andspoke” networks.
    Since the deregulation of U. S. commercial aviation in 1978, nearly all
    major carriers have developed such networks. Airline officials state that by
    bringing passengers from a large number of cities to one central location
    and redistributing these passengers to their intended

    destinations, an airline's fleet can serve more cities than it could through
    direct “point- to- point” service. Airline networks generally
    have several hub cities. For example, Northwest has hubs in Minneapolis,
    Detroit, and Memphis, and American has hubs in Chicago, Dallas, and Miami.

    Rapid Growth of RJs With hundreds of aircraft in operation, the airlines
    were providing RJ

    service to 157 cities and 482 city- pair markets in October 2000. 5
    Seventyfour Has Primarily

    percent of the cities receiving this service were large and mediumsized;
    Increased Service to

    only 8 percent were small, with populations under 100,000. 6 Air Larger
    Cities carriers have placed almost 60 percent of their RJ service in markets
    they were already serving (“ existing markets”) and have
    expanded their networks by instituting RJ service in markets that they
    previously were not serving (“ new markets”). Much of the
    service to existing markets supplemented or replaced mainline jet service
    that the carriers provided in these markets. The airlines chose to establish
    new service at cities that either were beyond the practical operating range
    of turboprop aircraft or were perhaps too small to be profitably served by
    mainline jets, according to airline officials. However, the airlines have
    ordered hundreds more aircraft, many of which are smaller or larger than the
    predominantly 50-

    seat RJs currently in service. In the future, with these aircraft of varying
    size, the airlines may adjust their RJ deployment strategies to provide
    service in markets of varying size. 5 In the airline industry, markets are
    generally defined in terms of service between a point of origin and a point
    of destination. This is often, but not always, defined as a city pair. When
    a metropolitan area is served by more than one airport, a market may be an
    airport pair. See app. I for additional information on our market
    definition. 6 The U. S. Bureau of the Census categorizes metropolitan
    statistical areas (MSA) into four population categories. We have labeled
    these four standard MSA categories as follows: “Small cities”
    are MSAs with populations of less than 100,000, “medium cities”
    are MSAs with populations between 100,000 and 249, 999, “medium- large
    cities” are MSAs with populations between 250,000 and 999, 999, and
    “large cities” are MSAs with populations of 1

    million or more.

    Number of RJs in Operation As of October 2000, major U. S. passenger
    airlines and their regional

    Has Increased Significantly affiliates had deployed almost 500 RJs. This
    represents a significant

    increase in RJ aircraft since 1997, when only 89 RJs were in service. Of the
    486 RJs in U. S. domestic service in the fourth quarter of 2000, 86 percent
    were 50- seat Bombardier or Embraer aircraft. The remaining RJs were 32-

    or 37- seat Fairchild or Embraer RJs, both of which began commercial
    operations in the United States in 1999. The number of RJs that each carrier
    operates varies widely. For example, Delta operates 168 RJs- more than any
    other major U. S. passenger carrier, largely because of its relationship
    with Comair (the first regional airline to purchase and begin operating RJs
    extensively). 7 Other major airlines whose

    regional affiliates have deployed relatively large numbers of RJs are
    Continental (92) and American (83). Figure 1 shows the number of RJs
    operated by major airlines as of October 2000 and the size of their RJ fleet
    compared with that of their total jet fleet.

    7 While Comair was the first U. S. carrier to begin operating more modern
    RJs, airlines such as Air Wisconsin and Horizon Air had already been flying
    older- model RJs, such as the BAe146 (the predecessor of the Avro RJ) and
    the Fokker F- 28.

    Figure 1: Number of RJs Operated by Major U. S. Airlines and Their Regional
    Affiliates, October 2000

    Delta Delta

    Continental Continental

    American American

    United United

    Northwest Northwest

    US Airways US Airways

    America West America West

    TWA TWA

    0 50 100 150 200 0 5 10 15 20 25

    Number of regional jets Percentage of carrier's total fleet

    Source: GAO's analysis of data from U. S. airlines.

    Just as the number of RJs in service has increased since 1997, so has the
    number of RJ departures. For example, in May 1997, there were 12, 364
    scheduled RJ departures, compared with 93,606 scheduled RJ departures in
    October 2000- an increase of 735 percent in 3-� years. On average, each RJ

    in October 2000 made more than six departures per day. By comparison,
    overall mainline jet departures amounted to 492,331 in May 1997 and 537,697
    in September 2000- a 9- percent increase.

    RJs Serve 157 Cities, Few of Although RJs are flying throughout the United
    States, about two- thirds of Which Are Small the cities with RJ service are
    located east of the Mississippi River. Figure 2

    shows the location of the cities served by RJs as of October 2000. Industry
    experts believed that this geographic distribution can be explained by
    differences in population densities and distances between cities that made
    RJ service well suited for these markets. See appendix III for more detailed
    information on the U. S. cities with RJ service as of October 2000. 8

    Figure 2: Locations of Cities Served by RJs, October 2000

    Source: GAO's presentation of data from the Kiehl Hendrickson Group.

    8 Some carriers use RJs to serve cities in Mexico and Canada as well. For
    example, Continental uses RJs to serve Ixtapa/ Zihuatanejo, Mexico, from its
    Houston hub and Montreal, Canada, from its Cleveland and Newark hubs.

    Of the 157 cities served by RJs as of October 2000, only 13 (or 8 percent)
    were small cities- those with populations under 100,000. Five carriers-
    Delta, Continental, American, Northwest, and America West- provide RJ
    service to those cities. 9 However, only three of these small cities (White
    Plains, New York; Traverse City, Michigan; and Bozeman, Montana) have RJ

    service from more than one air carrier. Figure 3 shows the distribution of
    cities that had received RJ service as of October 2000.

    Figure 3: Size of Cities Served by RJs, October 2000

    100 Number

    80

    67

    60

    48

    40

    29

    20

    13

    0 Small

    Medium large

    Large Medium- City size

    Source: GAO's analysis of data from the Kiehl Hendrickson Group and the U.
    S. Bureau of the Census.

    Large and medium- sized cities have received the vast majority of RJ
    service. The airlines generally introduced RJ service in larger cities
    before expanding it to smaller cities. For example, of the cities gaining RJ
    service

    in or before 1997, 69 (or 79 percent) were cities that had populations over
    9 For our analysis, we included only those city- pair markets that had a
    minimum threshold of at least 20 RJ departures in Oct. 2000.

    250,000 while only 8 (9 percent) were small cities. This deployment pattern-
    in which airlines have decided to serve larger cities rather than small
    cities with RJs- remained consistent between 1997 and 2000. Only five
    additional small cities received RJ service between 1998 and October

    2000. Larger cities also more often received RJ service from more than one
    carrier. Of the 157 cities that received RJ service, 94 received service
    from multiple carriers. Moreover, 77 of those 94 cities had populations of
    250,000 or more.

    The growth in the number of cities that have received RJ service has been
    slowing since 1997. Of the 157 cities that were served by RJs in October
    2000, 86 had begun to receive their service in or before 1997. Since then,
    however, air carriers initiated service to 34 cities in 1998, 22 cities in
    1999, and 15 cities in 2000. Figure 4 shows the decreasing number of new
    cities served by RJs over time and further indicates that most of these
    cities are not small.

    Figure 4: Number and Population Category of Cities Receiving RJ Service, by
    Year

    50 Number of cities

    40 30 20 10

    0 1997 1998 1999 2000 Year RJ service started

    Small Medium Medium- large Large

    Source: GAO's analysis of data from the Kiehl Hendrickson Group and the U.
    S. Bureau of the Census.

    RJ Service Has Been Split As the total number of cities served by RJs has
    grown over time, so has the Between New and Existing number of city pairs
    (or markets). As of October 2000, RJs were serving 482 markets. 10 Of these
    482 markets, we examined the 432 that received RJ Markets

    service between January 1997 and October 2000. 11 Air carriers were already
    serving the majority of these markets with turboprops or mainline jets
    before they introduced RJs. However, air carriers also used RJs to expand
    their networks by flying to cities they had not previously served. Almost 60
    percent of the 432 markets were existing markets- that is, they were already
    receiving either mainline jet or turboprop service from the RJ carrier
    before it added the RJ operations. Specifically, RJs supplemented existing
    mainline jet and/ or turboprop service in about 36 percent of the markets
    and replaced mainline jet or turboprop service in 24 percent of the markets.
    The remaining 41 percent were new markets that had not received service from
    that RJ carrier for at least 1 year before the carrier introduced RJ
    operations. Figure 5 breaks down the changes in types of service for the 432
    RJ markets that have received RJ service since January 1997.

    10 The total number of markets served is greater than the number of cities
    because many spoke cities receive service from more than one airline through
    different hubs. Competing airline networks and hubs create multiple markets.
    11 Because of data limitations, we could not analyze the markets served by
    Delta before June 1997. As a result, the data for Delta cover only those
    markets served from June 1997 through Oct. 2000.

    Figure 5: RJ Deployment by Service Type Since January 1997

    5% Turboprop/ mainline

    supplement 11% Turboprop replacement

    41% 13%

    Turboprop supplement 13% Mainline supplement

    18% Mainline replacement

    New market

    n = 432 markets Note: Numbers do not add to 100 percent because of rounding.
    Source: GAO's analysis of data from BACK Aviation Solutions and the Kiehl
    Hendrickson Group.

    Adding RJ Service to Adding RJ operations to existing markets gave RJ
    carriers opportunities to Existing Markets Improved change their levels of
    service in various ways. For instance, a carrier could

    Service Options upgrade its service by replacing or supplementing its
    existing turboprop service with RJs, because jet service is considered to be
    of higher quality

    than turboprop service. In other markets, airline officials told us, adding
    RJs allowed them to “right size” their existing mainline jet
    service. In other words, the air carrier replaced its existing mainline jet
    service (which might have been carrying relatively few passengers) with RJs,
    whose seating capacity better matched the existing passenger traffic.

    When air carriers added RJ service to existing markets, they adjusted the
    total seating capacity. For example, in eight markets where RJs replaced
    mainline jets between January and October 2000, the carriers decreased the
    total seating capacity. 12 In five markets, the carriers increased the total
    seating capacity, even though they “downgraded” these markets to
    smallersized

    jets. By contrast, in markets where carriers replaced turboprops with RJs,
    they decreased the total seating capacity in one while increasing it in
    another nine. As a result, with RJs, the airlines have been able to maintain
    jet service (albeit with smaller aircraft) but have more often decreased the
    total seating capacity; where they have upgraded service from turboprop to
    jet aircraft, they have more often increased total capacity. According to
    airline officials, both approaches were consistent with the carriers'
    competitive service goals.

    To date, carriers have seldom completely replaced turboprop service with RJ
    service. This has occurred in only 11 percent of the markets that have
    received RJ service since January 1997. The carriers continue to fly
    turboprops in some markets for two fundamental reasons. 13 First,
    communities served by turboprops are often located within a few hundred
    miles of a hub airport, and carriers may continue to fly turboprops there
    because they are generally less expensive to operate on shorter routes than
    are RJs. Second, those communities also tend to be smaller, and they
    generate less passenger traffic- especially high- fare business traffic-
    than larger markets. Consequently, barring other considerations, if
    alternative

    markets that may generate more revenue are available, carriers will not
    deploy their RJs into smaller markets. Industry experts agreed that few
    turboprop aircraft had been replaced by RJs. So long as major U. S. carriers
    have turboprops in their fleets, they will use those aircraft as cost- and
    revenue- efficiently as possible.

    12 We did not examine whether the airlines' decisions to reduce the number
    of seats in some markets reflect the fact that these markets were
    competitive but had unnecessary capacity, or whether the airlines were able
    to increase airfares in some markets by reducing the number of seats
    available. 13 One airline official said that if more RJs had been available
    for deployment, the airlines might have used them to replace more
    turboprops.

    RJs Have Allowed Airlines When carriers initiated RJ service in new markets
    14 (41 percent of the to Serve New Markets and

    markets served by RJs), these new city pairs generally were more distant
    Expand Their Networks

    from each other than the city pairs that the carrier had previously served.
    According to information from airline officials, these new markets typically
    provided opportunities for the carrier to serve cities that previously were
    beyond the practical operating range of its turboprop aircraft. For example,

    in 1999, American initiated RJ service to Grand Rapids, Michigan, from its
    hub in Dallas (a distance of 931 miles), whereas previously it had served
    this city only with turboprops from its closer hub in Chicago (a distance of
    137 miles). With an RJ- capable of flying farther than a turboprop- American
    could add this city pair as a new market and expand its network. The average
    distance (stage length) for all new markets receiving RJ service between
    1997 and October 2000 was 563 miles- a distance well beyond the 350- mile
    range that many view as the practical limit for

    turboprop service. In other cases, industry officials indicated that
    airlines saw opportunities to provide RJ service in markets that were
    unlikely to have generated enough passenger traffic (and revenue) to support
    profitable mainline jet service.

    Providing RJ service to these new, more distant markets thus expanded a
    carrier's network size or “footprint.” One result of this
    expansion is more overlap among the different carriers' networks. Figure 6
    illustrates how using longer- range RJs instead of turboprops creates
    greater network overlap and effectively expands consumers' choices in some
    cities. For example, in 1998, Continental initiated RJ service between its
    Houston hub and Greenville/ Spartanburg, South Carolina- a distance of 838
    miles. Similarly, United began service in 1999 between Denver and Fargo- a
    distance of 627 miles. Each of these new markets was too far from those
    particular hub airports to serve with turboprops and not big enough to serve
    with mainline jets. The new RJ service increased the flight

    opportunities for these communities because, for example, until Continental
    began flying into Greenville/ Spartanburg, service to that location was
    generally provided only by Delta, Northwest, and US Airways. Likewise, Fargo
    was served only by Northwest until United began RJ service there.

    14 Of the 179 new markets (41 percent of the 432 markets), only 23 involved
    service to small and medium- sized communities. These markets represented 13
    cities- 11 medium and 2 small. In addition, each of these cities already had
    mainline jet service from at least one other carrier.

    Figure 6: How RJs Expand the “Footprint” of Carriers' Hubs

    With turboprop aircraft, which generally have a With the greater range that
    regional jets provide, the same two

    maximum range of 350 miles, different air hubs have much greater overlap--
    and potentially much greater

    carriers' hubs that are 500 miles apart have competition for the same
    passengers. little competitive overlap.

    Turboprop Regional

    range jet range

    Carrier Carrier

    Carrier Carrier

    A's hub B's hub

    A's hub B's hub

    500 500 miles

    miles

    According to industry officials, expanding airline networks to include new
    cities also created opportunities for carriers to increase the number of
    passengers coming onto their networks- a key competitive goal for them. It
    is unclear whether RJs stimulate passenger traffic. Some industry

    observers believe that RJs increase passenger traffic because travelers who
    are unwilling to fly on turboprop aircraft will use RJs. Others believe that
    when RJ service is offered, passengers only switch to the carrier operating
    RJs and away from the carriers operating turboprops.

    The airlines have seldom used their RJs to provide direct service between
    spoke cities. As of October 2000, 82 percent of the major carriers'
    scheduled RJ flights connected a hub and a spoke city. An additional 14

    percent of the RJ flights were between a spoke city and a major airport that
    is not considered a hub, such as LaGuardia. Only 4 percent of RJ flights
    were directly between spoke cities. For example, since 1998, Continental

    has begun RJ service from its Houston and Cleveland hubs to 75 U. S. spoke
    cities while offering spoke- to- spoke service only among 5 cities. Compared
    with Continental's RJ deployment pattern, American's is less “hub
    intensive”- flying RJs in 52 markets through its hubs in Chicago and
    Dallas while providing spoke- to- spoke service in 11 cities. 15 Airline
    officials have said that because many smaller cities tend not to have enough
    passenger traffic to justify direct service between them, their airline can
    better and more profitably serve small communities by aggregating passengers
    from many small cities into one hub location and distributing them from
    there.

    RJ Deployment Is Expected U. S. carriers expect to continue the rapid
    expansion of their RJ fleets. As of to Grow, but Future January 2001, 1,255
    RJs of varying types and sizes had been ordered and

    1,010 were on option. 16 These orders are scheduled to be delivered to the
    Patterns Are Unknown

    airlines between the fourth quarter of 2000 and 2006. (See app. II for
    additional information on orders and options.)

    Whether the aircraft deployment trends seen so far will continue is unknown.
    One key reason is that the RJs that are to be placed into service over the
    next few years differ in size: some are smaller and some are larger than the
    current models. At one end of the market, carriers have recently begun to
    place smaller RJs into commercial service. Instead of carrying 50

    passengers, these models- such as the Embraer ERJ- 135 and the Fairchild
    Dornier 328Jet- carry 37 and 32 passengers, respectively. Additionally,
    Embraer is developing a 44- seat RJ, the ERJ- 140, which is slated to enter
    service in the first quarter of 2001. However, so few of these aircraft have
    15 Exceptions to this “hub- feeding” strategy include additional
    flights offered by Delta to Orlando, Boston, and New York's LaGuardia
    Airport, and by US Airways to LaGuardia and

    Reagan National, all of which are nonhub airports for these airlines. 16
    According to an industry expert, an order (or purchase agreement) for an RJ
    is a contract between the manufacturer and the purchaser that indicates,
    among other things, the number of aircraft to be delivered, equipment to be
    installed, delivery dates, purchase price, and financing arrangements.
    Options, when part of a purchase agreement, allow the purchaser to determine
    whether to purchase additional aircraft.

    been put into service to date that it is difficult to characterize the
    markets where they are used. As of October 2000, carriers had ordered 304 of
    these smaller RJs and held options for 114 more.

    At the other end of the RJ market, manufacturers are developing 70- seat
    RJs. By the end of 2000, U. S. carriers had placed orders for 112 and held
    options for 218 70- seat CRJ700s that are to begin commercial service in
    2001. Embraer's ERJ- 170 and Fairchild Dornier's 728Jet are scheduled to
    enter service in 2002 and 2003, respectively. However, since none of these
    larger aircraft are now in service in the U. S., it is unclear how each will
    affect air service to small and medium- sized communities. The possible
    effect of these developments on air carriers' continued use of turboprops is
    also unknown. The three carriers with the largest number of RJs- Delta,
    Continental, and American- are planning to eliminate all turboprop aircraft
    from some or all of their regional operations. 17 Some industry officials
    told us that the airlines may reevaluate their service to some smaller
    communities because the higher cost of operating RJs over

    short distances- relative to turboprops- may make some markets that are
    relatively close to carriers' hubs less profitable. One industry report
    concluded that with some airlines converting to all- RJ fleets, some markets
    currently served by turboprops could possibly lose all service from their
    current carriers if the airlines deem the markets to be unprofitable for
    RJs.

    However, other analyses indicated that turboprop service, while decreasing,
    would not be completely eliminated in the foreseeable future.

    RJ Deployment The carriers' decisions about where to deploy RJs are
    primarily profit Decisions Are Profit

    driven, but according to airline officials, other factors, including pilot
    labor agreements, have influenced their acquisition and deployment
    decisions. Driven but Also

    The goal of profit maximization is common among the carriers we Affected by
    Labor

    interviewed, but the other factors, such as their labor agreements, reflect
    Agreements and Other each carrier's circumstances. According to industry
    officials, these agreements greatly restrict the ability of some carriers to
    acquire and use

    Factors RJs but give other carriers wide latitude to do so. Airline
    officials said that

    these agreements- together with other carrier- specific factors, such as the
    location of the carrier's hubs in relation to major population centers-
    affected their RJ deployment strategies.

    17 For example, American Eagle made its hub at O'Hare an all- RJ hub as of
    Nov. 2000 and Comair made its Cincinnati hub an all- RJ hub as of Dec. 2000.

    Need to Maximize Profit Without exception, officials with the airlines we
    contacted told us that the Generally Drives RJ primary factor influencing
    the airlines' decisions about where to deploy Deployment

    their RJs is the need to maximize profits. The airlines use sophisticated
    models to help them select potential markets. These models rely on detailed
    data to estimate whether certain markets can be served profitably. They take
    into account such considerations as estimated passenger traffic, the
    carrier's operating costs, and competition in the market (including the type
    of aircraft competitors used, the number of daily flights they scheduled,
    and the fares charged). Industry officials told us that the number and type
    of passengers that an airline is likely to carry is the cornerstone of its
    model. A key element to the airline's profit estimates is the availability
    of high- yield passenger traffic (e. g., business travelers who are more
    likely to pay higher airfares than leisure travelers) in a particular
    market. Because some smaller communities may not generate enough of this
    high- yield business traffic, carriers may not have begun RJ service there
    yet.

    Aircraft operating costs- another key factor affecting profits- also
    determine whether an airline serves a market. While RJs are less costly to
    purchase than mainline jets, they are generally costlier than turboprops ($
    22 million for a CRJ200 versus $14.3 million for a 50- seat Q300 Dash 8
    turboprop). Furthermore, crew and fuel costs combined, which tend to be the
    highest- cost elements for both RJs and mainline jets, are generally

    higher for RJs than for turboprops. Aircraft operating costs generally
    decrease (on a per- seat- mile basis) as the distance flown in a given
    market (the “stage length”) increases. 18 According to data from
    Bombardier,

    operating costs are higher for its CRJ than for its Q300 for stage lengths
    up to about 380 miles but are lower for longer stage lengths. That is, RJs
    are less cost- efficient to operate on shorter- range flights than
    turboprops. As a

    result, the revenue requirements that a carrier must meet to operate a route
    profitably will vary with the stage length and the type of aircraft
    operated.

    18 Cost per available seat mile is a common measure of an air carrier's
    costs. This is generally calculated by dividing the total cost of operating
    an aircraft by the product of the total number of seats on the aircraft that
    the carrier can sell to paying passengers and the total statute (i. e.,
    straight- line) miles that the aircraft is flown in revenue passenger
    service.

    Pilot Labor Agreements According to industry officials, pilot labor
    agreements have influenced past Affect RJ Use

    RJ deployments. However, as other agreements have been ratified more
    recently, the potential effect of some aspects of these labor issues appears
    to be waning for most carriers. 19 In past labor negotiations, pilots and
    airline officials have agreed to

    restrictions on the number and/ or size of the RJs the carriers' affiliates
    can operate. Mainline pilots see these restrictions as job protection
    mechanisms because they ensure that a carrier cannot replace mainline
    flights operated by its own pilots with RJ flights operated by a regional
    affiliate's pilots. These restrictions may be negotiated into the portion of
    the labor contract generally referred to as the “scope clause.”

    RJ- related scope clause provisions differ from carrier to carrier (see
    table 1). 20 For example, the 1998 labor agreement between Continental and
    its pilots generally did not limit the number of RJs that Continental's
    affiliates

    could fly, but it did restrict the size of the aircraft to a maximum of 59
    seats. The contract between American and its pilot union also limits the
    seating capacity of the RJs that American Eagle can operate. By contrast,
    Northwest's RJ- related scope provisions basically limit the carrier's RJ
    fleet to a certain portion of its overall fleet.

    19 The impact on the current scope clause agreements of the proposed merger
    agreement between United and US Airways and of American's proposed purchase
    of TWA, if approved, is unknown. The impact of these two consolidations on
    small communities' air service and the likelihood that those communities
    will be served by RJs are also unknown. For information on the potential
    impact of the United- US Airways merger on competition in the U. S. domestic
    airline market, see Aviation Competition: Issues Related to the Proposed
    United Airlines- US Airways Merger (GAO- 01- 212, Dec. 15, 2000).

    20 Scope clauses are typically one factor in broader labor negotiations on
    salary, job protection, benefits, and other elements, and the airlines and
    pilot unions negotiate tradeoffs among these elements to determine the best
    possible agreement for their respective interests.

    Table 1: Overview of Restrictions on RJ Operations in Pilot Labor Agreements
    Number of RJs in fleet as of Airline Contract term and main provisions
    related to RJs

    October 2000

    America West 1995- 2000: There are no RJ- related scope restrictions. a 20
    American 1997- 2001: There is a limit of 67 RJs- with a maximum of 70 seats,
    a minimum of 45 seats, and an 83

    average of 50 seats- that applies to the airline's entire commuter fleet.
    There is no limit on the number of RJs with fewer than 45 seats. Continental
    1998- 2002: There is no limit on the number of RJs that can be operated, but
    their size is limited to 92

    59 seats; if this seat size is exceeded, Continental pilots will be given
    the opportunity to fly RJs. Delta 1996- 2000: There is no limit on the
    number of RJs, but their size is generally limited to 70 seats. a 168
    Northwest 1998- 2002: There is a limit of 30 RJs until the number of narrow-
    body jets exceeds 347; then RJs 41

    can be added on a one- for- one basis. The carrier may also place its code
    on 36 additional RJs operated by Mesaba (with less than 70 seats), and
    utilize other RJs operated by regional affiliates. TWA 1998- 2002: There is
    a limit of 30 RJs. The carrier may also operate 2 additional RJs for each 6

    additional aircraft in its fleet above 180 until the fleet reaches 188, and
    1 additional RJ for each 2 additional aircraft above 188. RJ size is limited
    to 70 seats and cruise speed to 400 miles per hour. United 1998- 2000: This
    period's agreement limited the maximum number of RJs to 65, with some 46

    provisions for adding more as the overall fleet size increased. 2000- 2004:
    The current agreement allows the carrier to deploy approximately 300 RJs by
    growing its mainline fleet and replacing 150 turboprops on a one- for- one
    basis.

    US Airways 1998- 2003: RJs are limited to either 35 total or 9 percent of
    the aircraft in US Airways' fleet, 30 whichever is larger. On April 7, 2000,
    the pilots and the airline signed an interim agreement allowing 35
    additional 50- seat RJs.

    a America West's pilot contract became amendable in April 2000 and Delta's
    became amendable in May 2000. Sources: GAO's presentation of information
    from the airlines, the Air Line Pilots Association, and the PA Consulting
    Group.

    RJ- related scope provisions in mainline pilot contracts continue to be a
    part of recent and ongoing negotiations between carriers and pilots. Scope
    clause agreements adopted in recent negotiations have generally allowed for
    significant increases in the number, but not in the seating capacity, of the
    RJs that a carrier can operate with pilots not on that carrier's seniority
    list. For example, the agreements between United and US Airways and

    their respective pilot unions have increased the number of aircraft the
    carriers can deploy. United's limit increased from about 65 to about 300,
    and US Airways' limit rose from 35 to 70. As of January 2001, America West
    and Delta were renegotiating contracts or contract extensions with their
    pilots, and in each case, the new agreement could alter the scope clause
    provisions.

    American and Continental intend to begin renegotiating the contracts with
    their pilot unions in 2001. For example, American and its pilot union plan
    to begin contract negotiations in June 2001. This agreement followed the

    union's September 2000 rejection of a proposed contract extension that,
    among other things, would have increased the number of 50- seat RJs that
    American Eagle pilots could fly, but would have given mainline pilots the
    right to fly 70- seat RJs. According to former union leaders, the union's
    membership rejected the proposed contract extension not because of the

    scope provisions, but because the pay increase proposed by American was not
    high enough compared with the increase that pilots at United had secured in
    a contract negotiated in August 2000.

    Other Factors May Affect RJ Another factor that may affect a carrier's RJ
    deployment decisions is the Deployment Decisions

    carrier's position in the manufacturing queue. The three primary RJ
    manufacturers- Bombardier, Embraer, and Fairchild Dornier- all have
    substantial backlogs of RJ aircraft orders and options. As of late 2000/
    early 2001, the manufacturers had not delivered 61 percent of U. S.
    carriers' total outstanding orders for RJs (including 50 percent of the
    orders for 50- seat RJs). 21 According to Bombardier, a new order for a
    CRJ200 would take at least 24 months to be filled. A Delta official said
    that its early RJ order gave Delta a competitive advantage because it is
    ahead of many other airlines in the manufacturing queue. A US Airways
    official confirmed the importance of a carrier's place in the RJ
    manufacturing queue by telling us that, other things being equal, US Airways
    would probably order RJs from the

    manufacturer that could deliver them most quickly. One carrier employed a
    different strategy to improve its place in the manufacturing queue and
    acquire RJs sooner than originally planned. In June 2000, Horizon Air (the
    sister company of Alaska Airlines) swapped CRJ700 delivery positions with
    American to get these planes sooner than originally contracted. This
    agreement will allow Horizon to take possession of its first 14 CRJ700s by
    October 2001, well ahead of the original 2002- 2003 schedule.

    Whether a carrier's hubs can accommodate increased aircraft arrivals and
    departures and how close these hubs are to target markets are also 21 RJ
    manufacturers are increasing their production capability to address the
    current backlog in RJ orders. App. II contains each manufacturer's firm
    orders, options, deliveries, and backlog by type of aircraft.

    considerations that could influence a carrier's RJ deployment strategy. For
    example, although Continental's Newark hub is relatively close to a large
    number of potential markets for Continental's RJ operations, the airport's
    high rate of delays and physical constraints limit its capacity to expand.
    Continental officials told us that the airline might be forced to completely
    abandon its RJ operations at Newark to protect its mainline service there
    and to shift many of its RJ operations to its Cleveland hub, which has
    neither the physical constraints nor the problems with congestion and

    delay found at Newark. Similarly, the geographic location of some hubs may
    limit the number of potentially profitable spoke cities- even with the added
    range of RJs. For example, compared with hubs in some eastern or midwestern
    cities, America West's Phoenix hub is located near fewer large cities that
    could be attractive RJ markets. On the other hand, Delta has developed an RJ
    hub in Cincinnati (in conjunction with its mainline operation there), and
    Northwest has begun to build a similar operation at Memphis. According to
    FAA officials, both of those airports are relatively uncongested and are
    within RJ operating distance of large numbers of potential RJ markets.

    Responses of Two Carriers The experiences of Delta and US Airways illustrate
    how the various factors to Factors Affecting RJ influencing RJ deployment
    have affected their ability to deploy RJs and Deployment Produced their
    strategies for doing so. The two carriers differ greatly in the size of
    Different Results

    their current RJ fleets and thus adopted markedly different strategies for
    using RJs to compete in various markets. Table 2 summarizes the differences
    in these carriers' RJ deployment positions.

    Table 2: Comparison of Delta's and US Airways' RJ Deployment, October 2000
    Factor affecting deployment Delta US Airways

    Year RJ service initiated 1993 1998 Number of RJs in fleet 168 30 Number of
    domestic markets served by RJs 178 41 Number of new markets served by RJs 62
    20 Source: Airlines.

    Delta Makes Extensive Use of Operating within the parameters of its labor
    contract, Delta has deployed RJs more RJs than any other carrier, greatly
    expanding its network between 1993 and 2000. Its relationship with Comair-
    once an independently owned

    airline operating as a code- sharing partner with Delta out of Cincinnati-
    facilitated this expansion. Comair was the first U. S. regional carrier to
    deploy RJs widely. By 1996, it and two other Delta affiliates were operating

    48 RJs- the only ones in service in the United States at the time. As of
    October 2000, Delta's affiliates were operating 168 RJs. These aircraft
    served 178 U. S. markets, 76 percent of which included Delta's hubs in
    Atlanta, Cincinnati, Dallas, and Salt Lake City (see fig. 7). Delta's 1996
    labor contract contained no scope clause restrictions on the number of RJs
    Delta could operate. Additionally, the location of its hubs in Cincinnati
    and Atlanta, which are within range of numerous profitable markets, has
    given it a tremendous opportunity to expand RJ service to additional spoke
    cities.

    Figure 7: RJ Markets Served by Delta Connection Carriers as of October 2000

    Source: GAO's presentation of data from the Kiehl Hendrickson Group.

    US Airways Makes Limited Use In part because of limitations in its pilot
    scope clause, US Airways has been

    of RJs slower to acquire and has deployed far fewer RJs than Delta. As of
    October

    2000, US Airways operated 30 RJs that are owned by its code- sharing
    partners Chautauqua and Mesa airlines. These jets were serving 41 markets
    out of locations such as Boston, Charlotte, New York (LaGuardia),

    Philadelphia, and Reagan National (see fig. 8). US Airways officials said
    that the airline's management was aware that competitors were using RJs to
    make inroads into US Airways' network when the airline renegotiated its
    pilot contract in 1997, but was unsuccessful in negotiating for more liberal
    RJ rights with its pilot union. Because of the relatively slow development
    of its RJ fleet, US Airways has tried to defend its markets by offering more

    turboprop flights in the hope that more frequent turboprop service could
    compete favorably against other carriers' less frequent RJ service. At
    LaGuardia, in particular, US Airways is trying to counter a large influx of
    RJs from carriers such as Delta.

    Figure 8: RJ Markets Served by US Airways Express Carriers as of October
    2000 Source: GAO's presentation of data from the Kiehl Hendrickson Group.

    Experts Believe That There is consensus among the studies we reviewed and
    the industry RJ Growth Has

    experts we interviewed that RJs have contributed to congestion in our
    national airspace, but there is less agreement about the nature or extent of
    Increased Congestion, these effects. The experts we spoke with agreed that
    the growing number but Extent Is Unclear of RJs was increasing congestion at
    already crowded hub airports, but they varied in their views on whether
    specific characteristics of these jets, such as their cruising speed or
    climbing ability relative to that of mainline jets, were having a
    compounding effect. Few Studies Identify RJs'

    To date, only one comprehensive study 22 has focused on how RJs may Role in
    Airspace Congestion

    affect congestion in the United States. 23 Issued in 1999 by the MITRE
    Corporation, the study focused primarily on congestion in en route airspace
    and secondarily on airport congestion and infrastructure concerns. 24 A
    January 2000 update to the MITRE study estimated that if the current scope
    clause limitations remained unchanged, up to 1,100 RJs would be in service
    in the continental United States by the end of 2003 (an

    increase from the 800 RJs estimated in the original 1999 study). The key
    study we reviewed estimated a 31- percent (compounded yearly) increase in RJ
    traffic between February 1998 and December 2003, compared with

    FAA's forecasted 3- percent (compounded yearly) increase in mainline jet
    traffic for the same time period. This is equivalent to an increase of about

    22 William W. Trigeiro, The Impacts of Regional Jets on Congestion in the
    NAS, MITRE: Center for Advanced Aviation System Development, MP 98W0000256V3
    (McLean, VA, Feb. 1999).

    23 Another study, conducted by FAA, focused on airport and infrastructure
    design concerns that could become increasingly relevant with the growing
    deployment of RJs. This study concluded that RJs will change the character
    of airports and passenger air transportation but that it is too early to
    predict their specific impact. It indicated that small airports (such as
    small nonhub airports that previously accommodated 727s and DC- 9s) may be
    able to accommodate RJs if they were originally designed for commercial jet
    operations (i. e., if those airports have sufficiently long runways). Large,
    congested airports may be limited in their ability to add RJs, particularly
    if they have historically relied on shorter “commuter”

    runways that may not be long enough to accommodate RJs. For more information
    see Kenneth C. Jacobs, The Impact of Regional Jets on Airport Design, FAA
    (Apr. 20, 2000). One additional study reviews a variety of issues related to
    RJs, including the effects of scope clauses and the impact of RJs on
    mainline carriers' employees. This report also includes information on RJs
    and congestion. For more information see: Robert W. Mann, Small Jet Issues
    (1996).

    24 The MITRE Corporation describes itself in its mission statement as a not-
    for- profit corporation, working in the public interest in partnership with
    government clients on issues of national importance.

    4,000 RJ flights per day over a 70- month period compared with an increase
    of about 3,000 mainline jet flights per day over the same time period.

    MITRE's study generally concluded that the rapid growth of RJs operating in
    U. S. airspace is likely to contribute to increased congestion in different
    areas of the national airspace system. However, RJs represent an emerging
    technology (compared to turboprops) that is allowing airlines to change
    their service approaches and is increasing the competition between their
    respective hubs for spoke- city traffic. As a result, the effects that RJs
    will have on the structure and operations of the air transportation industry
    will become clear only over time. Key points in the study include the
    following:

    ? Currently, RJs fly mostly where airspace is already congested- at high
    altitudes traditionally used by mainline jets, not at the lower altitudes
    typically used by turboprops. Because the number of aircraft operating at
    higher altitudes is increasing, congestion at high altitudes is likely to
    worsen.

    ? RJs perform similarly to older narrow- body jet aircraft (e. g., Boeing
    737s) except that they climb at a slower rate. Thus, transition airspace
    (used for climbing and descending) may become more congested and

    include more types of aircraft (although MITRE did not specifically include
    an analysis of transition airspace in its investigation). ? Increased air
    traffic from RJs would create the highest levels of congestion in the
    northeastern United States. There is no reasonable

    way for air traffic to avoid this congested airspace, and congestion in this
    region is expected to be a major concern by 2003. ? Competition for
    passenger traffic onto different airline networks may provide an opportunity
    to shift some traffic from badly congested hubs

    to other locations, but the overall change in traffic patterns is unclear as
    yet. ? New runway capacity is predicted to relieve potential airport
    congestion

    in some hub locations by 2003. These locations include Detroit/ Wayne
    County, Houston (Bush Intercontinental), and Minneapolis/ St. Paul. However,
    other hub airports with high RJ traffic are not likely to have new runways
    by 2003. Similarly, other hub airports that have runways

    unsuitable for RJs (i. e., those that are long enough for turboprops but too
    short for RJs) are not likely to have those runways lengthened by 2003.

    Industry Experts' Opinions Our discussions with a cross section of aviation
    industry experts Supported Many of the

    consistently confirmed many of the key issues identified in the MITRE
    Study's Conclusions

    study. Among the experts' key points were the following: ? Increased number
    of RJs inevitably affects congestion. The industry

    experts repeatedly expressed concern about the impact of adding so many
    aircraft so quickly to airspace whose capacity is already constrained.
    Because hundreds of new aircraft have been added to already congested
    airspace while comparatively few turboprops have been taken out of service,
    many of the experts believed it was inevitable that congestion and delays
    would increase. They also noted that with

    many more RJs on order, congestion and delays are not likely to diminish in
    the near future. The number of daily RJ flights further contributes to
    crowded skies. ? RJs are flying into already congested airports. Industry
    experts also stated that the effect of such a large infusion of aircraft was
    exacerbated because these new aircraft were usually flying into already
    congested airports. For example, after the enactment of AIR- 21, air
    carriers filed requests to add more than 600 new flights per day at New
    York's LaGuardia Airport- an increase of more than 50 percent in the number

    of daily flights at what is considered to be one of the nation's most
    congested airports. The vast majority of those flight requests were for RJ
    service. While action by FAA has since limited airport operations (take-
    offs and landings) to a maximum of 75 per hour (allowing a total increase of
    approximately 159 operations per day), the air carriers' desire to serve
    this airport with RJs remains high. In October 2000, RJ carriers had 120
    daily departures scheduled from LaGuardia.

    ? Effect of RJ flight characteristics is unclear. The experts we spoke with
    varied widely in their views on how or whether RJs' operating or flight
    characteristics contributed significantly to congestion. Some believed

    that transition airspace was a problem area while others were more concerned
    about situations that might occur at cruise altitude when faster mainline
    jets- especially large, widebody aircraft- overtook slower RJs. Others
    believe that these different opinions reflect the lack of a common
    understanding about how most RJs operate. Many also thought that the
    congestion problems were not solely related to RJs' operations or
    characteristics. Rather, congestion was associated more

    broadly with constraints at individual airports- such as unique design
    features (e. g., runway lengths) or particular air traffic control
    procedures. For example, Dallas air traffic officials had some concerns

    about fitting RJs into departure patterns and arrival sequences under
    certain conditions.

    According to data provided by industry experts, the characteristics of RJs
    and mainline jets may differ somewhat during certain flight phases, but RJ
    cruise speeds are highly compatible with those of older, narrowbody

    mainline jets. This information was generally confirmed by other experts'
    experiences. For example, when operating in transition airspace, some RJs do
    not climb out at the same rate as some other aircraft. According to air
    traffic officials, this can cause congestion and delay by forcing other,
    faster jets to “stack up” behind the slower RJs. One facility
    has addressed this issue by restricting RJs to lower altitudes on departure
    and allowing other, larger jets to climb faster above the RJs. Other air
    traffic control officials believed that the RJs' cruise

    speeds were compatible with those of other jets and did not find that
    managing RJs posed any special challenge during this flight phase.
    Congestion at high altitudes is also a concern because RJs are designed to
    fly at the same altitudes as mainline jets. As their numbers grow, RJs are
    increasingly competing for airspace that is already frequented by many other
    aircraft, whereas turboprop aircraft typically fly in lower, less congested
    airspace. According to FAA, this problem seems to be

    particularly acute in the Northeast corridor, where air traffic is
    particularly heavy. ? Runway space may become more of a problem with more
    RJs. RJs generally cannot use the shorter commuter runways that turboprops

    typically use, but instead require the same longer runways that mainline
    jets use. This is problematic in locations where runway space is already at
    a premium. For example, at Washington's Reagan National Airport, only one of
    three runways is long enough to routinely accommodate most jet aircraft. FAA
    and airport officials observed that the use of this longest runway is
    increasing because regional airlines are replacing

    traditional turboprop aircraft, which can use the shorter runways, with RJs,
    which must use the longest runway. 25 Some experts suggested that this
    infrastructure constraint could become an even greater concern as more and
    more RJs are deployed and increasingly compete with mainline jets for
    limited runway space. This is significant because few

    airports have additional runways under development, and according to an FAA
    official, the time needed to add a new runway can be between 5 and 10 years.

    25 See Reagan National Airport: Capacity to Handle Additional Flights and
    Impact on Other Area Airports (GAO/ RCED- 99- 234, Sept. 17, 1999.)

    Some Interim Solutions Given the projected growth in the fleet of RJs and
    the capacity constraints Have Been Developed to

    of the current airspace system, industry experts agreed on the need for Ease
    Congestion and crafting solutions. Some interim solutions that have been
    implemented or Delays, but the Industry Is are under consideration include
    the following:

    Concerned About ? Low- Altitude Alternative Departure Routes. This procedure
    allows an Developing Long- term aircraft to depart in certain situations-
    such as when higher altitudes Solutions

    are congested- provided that the aircraft initially flies at a lower
    altitude. As a result, aircraft are more often able to depart on time, but
    they incur higher fuel costs by flying at lower altitudes. This procedure
    involves RJs as well as other aircraft. Industry officials told us that the

    airlines are generally willing to make this trade- off to maintain their
    schedules. ? Tactical Altitude Assignment Program. Under this pilot program,
    set to

    begin officially in February 2001, certain short stage lengths between city
    pairs are identified as low- altitude routes, and aircraft are allowed to
    depart on these routes with potentially less delay provided that they fly
    the entire route at the predetermined, lower- than- optimum altitude.
    Because the program is voluntary, carriers can decide whether they want to
    incur extra fuel costs to maintain their schedules. Many of the selected
    city pairs included in this program are RJ routes, although this program is
    not specifically directed toward RJs, according to an FAA

    official. Trade association representatives generally supported these and
    other efforts to mitigate congestion, but expressed concern about
    initiatives that specifically targeted regional aircraft. They believed that
    solutions to congestion should be based on an aircraft's operating and
    performance

    characteristics, not on its type. They believed that equal access to the air
    traffic control system and national airspace was important to the carriers
    flying RJs and, in particular, to their passengers. The experts we
    interviewed agreed that interim solutions are important, given the projected
    growth in air traffic. In addition, these experts pointed to the need for
    action on larger, long- standing issues. They said that air

    traffic may not be able to grow as projected unless some of those needs (e.
    g., for enhancements to airport infrastructure and improvements to the air
    traffic control system) are addressed.

    Conclusions The increasing numbers of RJs in operation have provided U. S.
    air carriers with opportunities to serve new and existing markets. As we
    have noted, with predominantly 50- seat aircraft, the carriers have
    initiated service to many large and medium- large communities but have
    provided less service to smaller communities. Service to small communities-
    to which the airlines now mostly operate turboprop aircraft- continues to be
    an important concern, because of the uncertainty about whether those markets
    may generate enough passenger traffic and revenue to be financially viable
    to sustain RJ operations. Eventually, smaller RJs (i. e., 32-

    or 37- seat aircraft) may let carriers serve those smaller communities
    economically.

    Other questions also emerge about the impact of how the carriers will use
    their RJs. For example, the airlines could restrict capacity in a market by
    reducing service with larger mainline jets but increasing the number of RJ
    flights in a way that may inhibit entry by new competitors, allowing the
    airlines to charge fares higher than might exist in a more competitive
    market. Additionally, the growth in RJs has clearly contributed to an

    increasing problem with congestion, particularly in some locations like New
    York's LaGuardia Airport. But how the expected growth in RJs may continue to
    contribute to congestion and delay remains to be seen. Depending on how
    events unfold in the near future, these and other potential impacts of the
    airlines' RJ strategies may warrant continued

    oversight. Comments We provided representatives from the eight carriers
    whose regional affiliates or code- sharing partners operate RJs (America
    West, American, Continental, Delta, Northwest, TWA, United, and US Airways)
    with draft copies of the sections of the report describing RJ deployment
    information and other factual descriptions of their historical and existing
    RJ service. We also provided draft copies of report sections to the
    Department of

    Transportation (DOT) and other interested parties, such as the Air Line
    Pilots Association, Allied Pilots Association, Regional Airline Association,
    Horizon Air, and the three RJ manufacturers- Bombardier, Embraer, and
    Fairchild Dornier. Representatives of the airlines and officials from DOT
    and the various industry groups offered technical comments, which we
    incorporated into the report as appropriate.

    As arranged with your office, we plan no further distribution of this report
    until 30 days after the date of this letter. At that time, we will provide
    copies to the Honorable Norman Mineta, Secretary of Transportation; the
    Honorable Jane Garvey, FAA Administrator; major U. S. airlines; the Air Line
    Pilots Association; the Allied Pilots Association; the Regional Airline
    Association; the RJ manufacturers; and other interested parties. We will
    also send copies to others upon request.

    If you or your staff have any questions about this report, please call me or
    Steve Martin at (202) 512- 2834. Other key contributors to this report are
    listed in appendix IV.

    Sincerely yours, JayEtta Z. Hecker Director, Physical Infrastructure Issues

    Appendi Appendi xes x I

    Objectives, Scope, and Methodology This report examined how U. S. air
    carriers are using regional jets and what issues surround the carriers'
    abilities to use these aircraft. Our work focused on three questions: (1)
    What is the status of regional jet deployment in the United States and how
    has this service evolved since

    1997? (2) What factors have affected the airlines' decisions in deploying
    regional jets? (3) What effect have regional jets had on air traffic and
    airport congestion, according to published studies and experts in the field?

    To determine the current status of regional jet (RJ) deployment within the
    United States, we first needed to define this class of aircraft. There is no
    uniformly accepted definition of an RJ either in the industry or in federal
    laws and regulations. For example, the Wendell H. Ford Aviation Investment
    and Reform Act for the 21st Century, P. L. 106- 181 (AIR- 21), variously
    defines an RJ as having a maximum seating capacity of “not less than
    30 nor more than 75” (sec. 210) or “less than 71” (sec.
    231). Within the industry, the term “regional jet” is sometimes
    used to describe larger aircraft, such as the Fokker F- 100 (100 seats) and
    Boeing 717 (106 seats),

    and older- technology aircraft, such as the Fokker F- 28 (69 seats) and BAe
    146- 100 (70- 82 seats). In this report, we defined RJs as newer aircraft
    that have been placed into service since 1993 and are designed to seat 70 or
    fewer passengers.

    We generally limited our analyses of RJ deployment to major network air
    carriers: America West Airlines, American Airlines, Continental Airlines,
    Delta Air Lines, Northwest Airlines, Trans World Airlines, United Airlines,
    and US Airways. We excluded Alaska Airlines, Southwest Airlines, and
    American Trans Air because they or their regional affiliates do not operate
    RJs (as defined above).

    To determine where those carriers operated their RJs, we analyzed historical
    data on airline traffic and current data on airline schedules. To obtain
    historical airline traffic data, we contracted with BACK Aviation

    Solutions (BACK), an aviation consulting firm, which obtains operational and
    financial information submitted by all U. S. airlines to the Department of
    Transportation (DOT). These data include the Origin and Destination Survey
    (O& D), based on a 10- percent sample of tickets containing itinerary and
    pricing information; T- 100 on- flight data; 1 and 298C T- 1 data, which
    supplement the T- 100 data with data on commuter and small certified air
    carriers. BACK makes certain adjustments to these data, such as correcting

    recognized deficiencies in the air carriers' O& D data submissions, when
    these submissions have not met DOT's standard of 95- percent accuracy. To
    determine the carriers' scheduled use of RJs, we analyzed airline flight

    schedule information that we purchased from the Kiehl Hendrickson Group, an
    aviation consulting firm. We did not independently assess the reliability of
    the data we purchased from either BACK or the Kiehl

    Hendrickson Group. Finally, to determine the size of communities that have
    received or are scheduled to receive RJ service, we obtained information on
    the populations of metropolitan statistical areas from the U. S. Bureau of
    the Census. We used the latest available Census data, which at the time we
    did our work were estimates for 1998. We used the Bureau's definitions to
    assign each city to one of four population levels: “Small
    cities” are those with populations of less than 100,000. “Medium
    cities” are

    those with populations between 100,000 and 249, 999. “Medium- large
    cities” are those with populations between 250,000 and 999,999.
    “Large cities” are those with populations of 1 million or more.

    We determined the total number of cities to which airlines operated RJs, as
    well as the total number of markets. In the airline industry, markets are
    generally defined in terms of service between a point of origin and a point
    of destination. Thus, a market is often, but not always, defined as a city
    pair. Some cities, however, are served by more than one airport. In our

    counts of the number of markets served by RJs, we adopted the definition of
    a market as a city pair and included all airports that served a metropolitan
    area as serving that city. Thus, for example, in locations such as Chicago,
    we counted RJ service from some other city to both O'Hare 1 14 C. F. R. 241
    prescribes the collection of scheduled service data from the domestic
    operations of large, certificated U. S. air carriers. The schedules
    submitted by the air carriers to DOT under this requirement collect nonstop
    segment data and on- flight market information by equipment type and by
    service class. This report is known as the “T- 100” report.

    International and Midway airports as RJ service to the Chicago market. The
    total number of markets served is greater than the number of cities because
    many spoke cities receive service from more than one airline- through
    different hubs. Competing airline networks and hubs create multiple markets.
    To eliminate markets that might receive less service than one

    flight per day for business days, we included only those that had a minimum
    of 20 RJ departures in October 2000. The definitions we used in our analysis
    are generally consistent with those used by other industry experts.

    As part of our effort to determine the status of RJ deployments, we also
    determined how the type of service provided by carriers changed over time.
    Prior research had established six main categories for how service in
    markets may change with the introduction of RJs: establishment of new

    markets, mainline jet replacement, mainline jet supplement, turboprop
    replacement, turboprop supplement, and both mainline jet and turboprop
    supplement. Table 3 shows how each of those categories is defined.

    Table 3: Categories of Service Change Category of service change by RJ
    Definition

    New market Airline had no RJ service within the last year. Mainline jet

    Airline replaced all mainline jet service with RJ service. replacement
    Mainline jet

    Airline added RJ service to existing mainline jet operations, supplement
    regardless of whether the airline maintained the previous level of mainline
    operations.

    Turboprop Airline replaced turboprop service with RJ service. replacement
    Turboprop Airline added RJ service to existing turboprop operations,
    regardless supplement of whether the airline maintained the previous level
    of turboprop

    operations. Mainline jet and Airline added RJ service to existing mainline
    jet and turboprop turboprop operations, regardless of whether the airline
    maintained the previous supplement

    level of operations.

    Using these same categories, we examined RJ deployment in city- pair markets
    where carriers introduced RJs between January 1997 and October 2000, 2 and
    those RJs were still scheduled for service in October 2000. To determine
    what factors have affected airlines' deployment of RJs, we

    interviewed officials from aircraft manufacturers, pilot unions, major
    airlines, and the Federal Aviation Administration (FAA) as well as industry
    experts and consultants. We interviewed airline officials to determine what
    criteria and processes they use in making deployment decisions. These
    officials also helped us understand the airlines' perspectives in pilot

    contract negotiations. Union officials provided the labor perspective on
    scope issues, as well as data on the airlines' uses of RJs. We interviewed
    FAA officials to determine whether infrastructure issues (e. g., airport

    runways and capacity) might have played a role in the airlines' deployment
    of RJs. Industry experts and consultants provided a third perspective on RJ
    deployment and pilot labor issues. In addition, we reviewed studies and
    documents provided by these officials, as well as documents and studies
    obtained through literature and Internet searches.

    To determine the effect of RJs on congestion, we reviewed the limited number
    of available studies and consulted with a wide range of industry officials.
    To develop a list of relevant, comprehensive reports on RJs and

    congestion, we conducted a literature search and contacted industry
    officials. To identify industry experts, we relied on the recommendations of
    many knowledgeable industry officials. We interviewed officials from various
    sources, including the airlines, FAA (both headquarters staff and air
    traffic controllers in certain field locations), aviation industry
    consulting firms, and industry trade associations.

    We conducted our work from March 2000 through February 2001 in Washington,
    D. C.; Seattle, Washington; and Dallas and Houston, Texas, in accordance
    with generally accepted government auditing standards.

    2 Because of data limitations, we could include information on Delta's RJ
    deployment only between June 1997 and Oct. 2000.

    Regional Jets: Manufacturers, Characteristics,

    Appendi x II

    and Demand The regional jets (RJ) primarily in service in the United States
    are manufactured by three companies: Bombardier, Embraer, and Fairchild
    Dornier. 1 Bombardier, a Canadian company, was the first to enter the U. S.
    market in 1993 with its 50- seat Canadair Regional Jet (CRJ). Embraer, which
    is headquartered in Brazil, entered the U. S. market in 1997 with its 50-
    seat ERJ- 145 and in 1999 with its ERJ- 135. Embraer is also developing

    the 44- seat ERJ- 140. This plane is slated to enter service in the first
    quarter of 2001. Fairchild Dornier, which is based in Germany, first entered
    the market in 1999 with its 328Jet, the first 32- seat jet. Each of these
    companies also manufactures turboprops and is developing 70- seat RJs. These
    70- seat aircraft are scheduled to go into service within the next 3 years.
    Table 4

    lists some operating characteristics of these RJs. Figures 9 through 15 are
    photographs of the Bombardier, Embraer, and Fairchild Dornier RJs that are
    either now in service or proposed for U. S. commercial service.

    1 Boeing is considering building large (i. e., 70 seats or more) RJs by
    altering its 106- seat B717 to accommodate 70 to 86 passengers. BAE Systems
    manufactures the Avro aircraft that the company describes as an RJ. These
    jets are designed to seat 70 to 112 passengers, and only one U. S. carrier-
    Northwest Airlines- is a customer. Northwest operates a 69- seat version of
    the Avro RJ85.

    Table 4: RJ Operating Characteristics Maximum

    Take- off Manufacturer and RJ Seating

    Range (fully loaded, Maximum operating

    cruise speed distance at sea model capacity in nautical miles) altitude (in
    feet) a

    (in knots) level (in feet)

    BAE Systems Avro RJ85 85- 100 1, 510 35,000 440 3,796 Bombardier CRJ200 ER
    50 1, 645 41,000 464 6,290

    CRJ700 70 1, 685 41, 000 473 5, 130

    Embraer ERJ- 135 37 1, 700 37, 000 450 5, 577

    ERJ- 140 44 1, 630 37, 000 450 6, 463

    ERJ- 145 50 1, 550 37, 000 450 7, 448

    ERJ- 170 70 1, 800 41, 000 470 5, 500

    Fairchild Dornier 328Jet 32- 34 900 31, 000 400 4, 530

    728Jet 70- 85 1,600 41, 000 464 5, 009

    a Embraer terms this operating characteristic the “service
    ceiling.” Note: The information for the ERJ- 140, CRJ700, ERJ- 170,
    and 728Jet is italicized because these models are not yet in service in the
    U. S. and their specifications may therefore be preliminary.

    Source: Manufacturers.

    Figure 9: Bombardier CRJ200

    Source: Bombardier.

    Figure 10: Bombardier CRJ700

    Source: Bombardier.

    Figure 11: Embraer ERJ- 135

    Source: Embraer.

    Figure 12: Embraer ERJ- 145

    Source: Embraer.

    Figure 13: Embraer ERJ- 170

    Source: Embraer.

    Figure 14: Fairchild Dornier 328Jet

    Source: Fairchild Dornier.

    Figure 15: Fairchild Dornier 728Jet

    Source: Fairchild Dornier.

    These manufacturers have significant backlogs for U. S. orders. For example,
    Bombardier has not yet delivered 47 percent of the U. S. orders for its 50-
    seat CRJ. Embraer has not yet delivered 54 percent of the U. S. orders for
    its 50- seat ERJ and 51 percent of the U. S. orders for its ERJ- 135.

    Fairchild Dornier has not delivered 69 percent of the U. S. orders for its
    328Jet. Table 5 presents the number of orders, options, and deliveries,
    together with the backlog for each aircraft type.

    Table 5: U. S. RJ Orders, Options, Deliveries, and Backlog, by Aircraft Type
    Seating Manufacturer Aircraft type capacity Orders Options Deliveries
    Backlog

    Bombardier a CRJ100/ 200 50 516 497 272 244 CRJ700 70 112 218 0 112 Embraer
    b ERJ- 135 37 100 0 49 51

    ERJ- 140 44 129 31 0 129 ERJ- 145 50 323 181 147 176 ERJ- 170 70 0 0 0 0
    Fairchild Dornier c 328Jet 32- 34 75 83 23 52

    728Jet 70- 85 0 0 0 0

    Total 1, 255 1,010 491 764

    Note: Orders, options, deliveries, and backlog are for orders placed by U.
    S. carriers only, including some airlines that are not flying RJs as code-
    sharing partners for major carriers. Orders by U. S.- based aircraft-
    leasing companies are not included. The ERJ- 140 and the 70- seat RJs are
    not yet in service in the United States. a Data for Bombardier are as of
    January 2001.

    b Data for Embraer are as of November 2000. c Data for Fairchild Dornier are
    as of January 2001.

    Sources: Manufacturers.

    To address their backlogs, Bombardier and Embraer planned to increase
    production of their aircraft. Bombardier planned to increase its CRJ100/ 200
    production from 9. 5 per month to 12. 5 per month in the fall of 2001. This
    will allow the company to produce 135 aircraft in 2001- 2002 and 150
    aircraft in 2002- 2003. Bombardier is building a new plant at Montreal's
    Mirabel

    airport to handle the final assembly of the CRJ700 as well as of the CRJ900
    (a planned 86- to 90- seat jet). Embraer also planned to increase production
    of its RJs. The company expected to deliver 150 RJs in 2000 and nearly 200
    in 2001.

    U. S. Cities With Regional Jet Service as of

    Appendi x II I October 2000 Cities State Airline and year RJ service started
    Large cities Atlanta GA DL (1997), CO (1998), US (1999) Austin TX DL (1999)
    Baltimore MD HP (1998), CO (2000) Boston MA DL (1997), US (1998), CO (1999),
    AA (2000), HP (2000) Buffalo NY DL (1998), CO (2000), NW (2000)

    Charlotte NC DL (1997), CO (1998), US (1998), NW (2000) Chicago IL AA
    (1998), DL (1998), UA (1998), CO (1999), HP (1999) Cincinnati OH DL (1997),
    AA (1998), CO (1998), NW (1998), US (1998), TW (2000) Cleveland OH DL
    (1997), AA (1998), CO (1998), NW (1998), UA (2000) Columbus OH DL (1997), AA
    (1998), HP (1998), UA (1999), US (2000) Dallas TX AA (1998), CO (1998), NW
    (1999), DL (2000) Denver CO UA (1999) Detroit MI DL (1997), NW (1998) Ft.
    Lauderdale FL DL (2000) Grand Rapids MI DL (1997), AA (1999), NW (1999), US
    (1999), CO (2000) Greensboro NC DL (1997), CO (1998), NW (1999) a , AA
    (2000), UA (2000), US (2000) Hartford CT CO (1998), HP (2000) Houston TX CO
    (1998), DL (1998), AA (1999) Indianapolis IN DL (1997), AA (1998), CO
    (1998), UA (1998), US (1999) Jacksonville FL UA (1998), CO (1999), DL (1999)
    Kansas City MO DL (1997), CO (1999) Las Vegas NV DL (1997), HP (1999) Long
    Island NY DL (1998), CO (1999) Memphis TN DL (1997), AA (1999), CO (1999),
    NW (2000) Miami FL DL (1997) Midland/ Odessa TX CO (1999), AA (2000)
    Milwaukee WI DL (1997), AA (1998), CO (1998), US (1998), UA (2000)
    Minneapolis MN DL (1997), CO (1998), NW (1998) Nashville TN DL (1997), CO
    (1998), UA (1998), US (1999), AA (2000), NW (2000) New Orleans LA DL (1997)
    New York Metro NY DL (1997), CO (1998), HP (1998), AA (1999), UA (1999), US
    (1999) Norfolk VA AA (2000), CO (2000), DL (2000), UA (2000) Oklahoma City
    OK AA (2000), CO (2000), DL (2000), UA (2000) Santa Ana

    CA DL (1997) (Orange County)

    (Continued From Previous Page)

    Cities State Airline and year RJ service started

    Orlando FL DL (1997), CO (2000) a Philadelphia PA DL (1997), HP (1998), US
    (1998), CO (1999), AA (2000) Phoenix AZ HP (1997) Pittsburgh PA DL (1997),
    CO (1998), NW (1998), AA (1999) Portland OR DL (1997) Providence RI CO
    (1999), DL (2000), UA (2000) Raleigh/ Durham NC DL (1997), CO (1998), UA
    (1998), US (1998) Rochester NY DL (1997), US (1999), CO (2000), NW (2000)
    Salt Lake City UT DL (1997) San Antonio TX DL (1999) San Francisco CA DL
    (1997) St. Louis MO DL (1997), CO (1998), US (1998), NW (1999), TW (2000)
    Tampa FL CO (2000) a Washington DC DL (1997), UA (1998), US (1998), CO
    (1999), HP (1999)

    Medium- large cities

    Akron/ Canton OH DL (1997), UA (2000) Albany NY CO (1999), UA (1999)
    Albuquerque NM DL (1997) Allentown PA DL (1997) Appleton WI DL (1997), UA
    (1999), NW (2000) Bakersfield CA HP (1999) Baton Rouge LA AA (1999), CO
    (1999), NW (2000) Birmingham AL DL (1997), US (1998), CO (1999), NW (2000),
    UA (2000) Boise ID DL (1997) Brownsville TX CO (1999) Charleston SC UA
    (1998), CO (1999), DL (1999), US (1999), NW (2000), TW (2000) Charleston WV
    DL (1998), UA (1998), US (1998) Chattanooga TN DL (1997), AA (2000), NW
    (2000) Colorado Springs CO DL (1997), CO (1999), HP (1999) Columbia SC DL
    (1997), CO (1998), UA (1999), US (1999) Corpus Christi TX CO (1998), DL
    (1999), AA (2000) Dayton OH DL (1997), AA (1998), CO (1998), NW (1998), US
    (1999), TW (2000) Daytona Beach FL DL (1999) Des Moines IA DL (1997), HP
    (1997), AA (1998), NW (1998) El Paso TX CO (1999), HP (1999) Eugene OR HP
    (1999) Evansville IN DL (1997), AA (2000)

    (Continued From Previous Page)

    Cities State Airline and year RJ service started

    Fayetteville NC DL (1998) Fayetteville AR AA (1998), DL (1999), NW (1999),
    TW (2000) Flint MI NW (2000) Fort Myers FL DL (1999) Fort Wayne IN DL
    (1997), AA (2000), NW (2000), UA (2000) Fresno CA HP (1997), DL (1998), UA
    (2000) Greenville/ Spartanburg SC DL (1997), CO (1998), UA (1998), AA
    (1999), NW (2000), TW (2000), US (2000) Gulfport/ Biloxi MS DL (1997), NW
    (2000) Harrisburg PA DL (1997), NW (1999) Huntsville/ Decatur AL DL (1997),
    US (1998), AA (1999), CO (1999), NW (2000) Jackson MS DL (1997), UA (1999),
    NW (2000), TW (2000) Kalamazoo MI DL (1997), NW (1998), AA (1999), UA (2000)
    Knoxville TN DL (1997), NW (1998), AA (1999), CO (1999), US (1999) Lafayette
    LA CO (1998) Lansing MI DL (1998) Lexington KY DL (1997), NW (1998) Little
    Rock AR DL (1997), US (1998), CO (2000), UA (2000) Louisville KY DL (1997),
    CO (1998), US (1999), UA (2000) Macon GA DL (1997) Madison WI DL (1998), AA
    (1999), UA (1999), CO (2000) Melbourne FL DL (1999) Mobile AL CO (1998), DL
    (1999), UA (1999), NW (2000) Monterey CA HP (1999) Montgomery AL AA (1998)
    Newburgh NY DL (1998) Omaha NE DL (1997), AA (1999), CO (1999) Pensacola FL
    CO (2000), NW (2000) Peoria IL AA (1999), UA (1999), TW (2000) Reno NV DL
    (2000) Richmond VA DL (1997), AA (2000), CO (2000), US (2000) Saginaw MI NW
    (2000) Santa Barbara CA HP (1997) Sarasota FL DL (1999) Savannah GA CO
    (1998), UA (1998), DL (1999), US (1999), AA (2000) Shreveport LA AA (1998),
    TW (2000) South Bend IN DL (1997), NW (1998), AA (2000) Springfield MO UA
    (1998), AA (2000), NW (2000)

    (Continued From Previous Page)

    Cities State Airline and year RJ service started

    Syracuse NY DL (1997) Tallahassee FL DL (1997) Toledo OH DL (1997), AA
    (2000) Tucson AZ HP (1999) Tulsa OK DL (1997), NW (2000), UA (2000) Wichita
    KS DL (1997), CO (1998), HP (1999), NW (2000) Wilkes- Barre PA DL (1997), UA
    (1998) Worcester MA DL (2000) South Bend IN DL (1997), NW (1998), AA (2000)

    Medium cities

    Abilene TX AA (1998) Amarillo TX CO (1998), DL (2000) Asheville NC DL (1997)
    Billings MT DL (1997), UA (1999) Bloomington IL AA (2000), NW (2000)
    Burlington VT CO (1998), UA (1999), US (1999), DL (2000) Cedar Rapids IA DL
    (1997), AA (1998), NW (1998) Champaign/ Urbana IL AA (2000) Charlottesville
    VA DL (1998) Columbus/ Starkville MS DL (2000) Duluth MN AA (1998), NW
    (1998) Fargo ND NW (1999), UA (1999) Fort Smith AR AA (2000) Ft. Walton
    Beach FL DL (1997) Gainesville FL DL (1998) Green Bay WI DL (1998), NW
    (1998), AA (2000), UA (2000) La Crosse WI NW (1998), AA (2000) Lincoln NE TW
    (2000) Lubbock TX CO (1998), AA (2000), DL (2000) Manchester NH DL (1997),
    CO (1999) Myrtle Beach SC DL (1997), CO (1999) Panama City FL DL (1997)
    Pasco WA DL (1997) Portland ME UA (1998), CO (2000), DL (2000) a , US (2000)
    a Roanoke VA DL (1997), UA (1998) Rochester MN NW (2000) Sioux Falls SD UA
    (1999)

    (Continued From Previous Page)

    Cities State Airline and year RJ service started

    Tri City Airport TN DL (1997) Wilmington NC DL (1999)

    Small cities Bangor ME DL (1999) Bozeman MT DL (1997), UA (2000) Butte MT DL
    (1997) Casper WY DL (1997) Durango CO HP (1999) Grand Forks ND NW (1997)
    Harlingen TX CO (2000) Helena MT DL (1997) Idaho Falls ID DL (1998) Missoula
    MT DL (1997) Rapid City SD DL (1997) Traverse City MI AA (1999), NW (1999)
    White Plains NY DL (1997), CO (1998), NW (2000) (Westchester County) Airline
    Codes

    AA - American Airlines CO - Continental Airlines DL - Delta Air Lines HP -
    America West Airlines NW - Northwest Airlines TW - Trans World Airlines UA -
    United Airlines US - US Airways

    Note: For 1997, the airline either started RJ service in that year or was
    already providing it before May 1997. For some cities, carriers may have
    provided less than 20 departures in October 2000. a The carrier no longer
    provides RJ service to this city as of February 1, 2001.

    Source: GAO's analysis of data from BACK Aviation Solutions, Kiehl
    Hendrickson Group, and the U. S. Bureau of the Census.

    Appendi x V I GAO Contacts and Staff Acknowledgments GAO Contacts JayEtta Z.
    Hecker (202) 512- 2834 Steven C. Martin (202) 512- 2834 Acknowledgments In
    addition to those named above, Dawn Hoff, David Hooper, Joseph Kile,

    Sara Ann Moessbauer, Tim Schindler, Stan Stenersen, and Pamela Vines made
    key contributions to this report.

    (348219) Lett er

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    GAO United States General Accounting Office

    Page 1 GAO- 01- 344 Regional Jets

    Contents

    Contents Page 2 GAO- 01- 344 Regional Jets

    Page 3 GAO- 01- 344 Regional Jets United States General Accounting Office

    Washington, D. C. 20548 Page 3 GAO- 01- 344 Regional Jets

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    Appendix I

    Appendix I Objectives, Scope, and Methodology

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    Appendix I Objectives, Scope, and Methodology

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    Appendix I Objectives, Scope, and Methodology

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    Appendix II

    Appendix II Regional Jets: Manufacturers, Characteristics, and Demand

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    Appendix II Regional Jets: Manufacturers, Characteristics, and Demand

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    Appendix II Regional Jets: Manufacturers, Characteristics, and Demand

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    Appendix II Regional Jets: Manufacturers, Characteristics, and Demand

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    Appendix II Regional Jets: Manufacturers, Characteristics, and Demand

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    Appendix II Regional Jets: Manufacturers, Characteristics, and Demand

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    Appendix II Regional Jets: Manufacturers, Characteristics, and Demand

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    Appendix III

    Appendix III U. S. Cities With Regional Jet Service as of October 2000

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    Appendix III U. S. Cities With Regional Jet Service as of October 2000

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    Appendix III U. S. Cities With Regional Jet Service as of October 2000

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    Appendix III U. S. Cities With Regional Jet Service as of October 2000

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    Appendix IV

    United States General Accounting Office Washington, D. C. 20548- 0001

    Official Business Penalty for Private Use $300

    Address Correction Requested Presorted Standard

    Postage & Fees Paid GAO Permit No. GI00
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