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-ï¿½ 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

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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

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