Remade airlines seek an advantage with roomier regional jets
By JOSHUA FREED,
AP
Posted: 2007-07-05 14:31:46
MINNEAPOLIS (AP) - Airlines are rushing to add new regional jets with first-class seats, roomier cabins and, in some cases, hot food.
The carriers are hoping business travelers tired of a cramped 50-seat jet will pay extra for a flight experience closer to what they get on a mainline jet. The addition could help airlines turn a profit on flights that have generally been a loss-leader feeding traffic into long-haul flights, although rising fuel prices could complicate the plan.
Airlines that recently went through bankruptcy - Northwest, Delta, and United - are the freest to add such jets because of relaxed restrictions in their pilot contracts.
Northwest Airlines Corp. is adding 72 new 76-seat jets through next year. Half will be Bombardier CRJ-900s flown by its Mesaba subsidiary and the other half will be Embraer 175s flown by its new Compass subsidiary. Both include a dozen first-class seats, and the cabin is roomier than on Northwest's other regional jets.
Delta Air Lines Inc. plans to fly 77 dual-class regional jets by the end of 2008, and United regional partners now fly about 115 70-seat jets with coach, first-class and an Economy Plus seat with extra legroom.
Delta spokeswoman Betsy Talton said business customers have been asking for the regional first-class seats for years. The aim with the new jets is "to make it all more seamless and more like the mainline jet experience," she said.
First-class seats on Northwest's new jets will include the same level of meal service as on regular flights. Northwest, which is Michigan's biggest passenger air carrier and has a hub at Detroit Metropolitan Airport, said it helped design its version of the Bombardier CRJ900, which has 6 feet 2 inches from floor to ceiling in the aisle, and windows that are 25 percent bigger than an earlier version of the CRJ900.
That's a big improvement over the 50-seaters often used on regional routes, even if doesn't quite match mainline flying, said aviation consultant George Hamlin of Airline Capital Associates Inc.
"You had to be a midget to see out the windows of the 50-seater, it was so low," he said.
Brad Ness hal cost is spread among fewer passengers, and the gas-guzzling takeoff is a larger proportion of the shorter flight.
Still, he said the new 76-seat jets make some sense for Northwest, especially compared with one jet it replaces - Northwest's old 69-seat Avros. Northwest retired the four-engine gas hog from its regional fleet as it reorganized in bankruptcy.
The new regional jets improve margins by about 16 percentage points versus Northwest's older 100-seat DC-9s, which they are replacing on some routes, Chief Financial Officer Dave Davis told analysts at a conference in June.
The new jets stretch the idea of "regional" flying. For instance, Northwest used to fly some 1,400 miles from Minneapolis to Vancouver only seasonally, when demand could fill an Airbus. It dropped the route when demand slackened because that was too far for a 50-seat jet. But it's within range for the new Embraer, which is the plane Northwest will use on that route.
"What people really care about is nonstop service. And these aircraft are the right size to introduce them into many markets that wouldn't have it otherwise," Hamlin said.
Thank bankruptcy.
Until recently, pilot contracts at most major airlines put tight limits on how many small jets they could fly, because pay for those jets was less than for larger jets.
But in bankruptcy, Northwest, Delta, and UAL Corp.'s United won concessions from pilots expanding the number of jets they can fly in the 70-seat range. Northwest's order for 72 of those jets maxes out the new higher limit, although it can fly as many as 90 such jets if it also boosts the size of its mainline fleet.
Meanwhile,
AMR Corp.'s American Airlines, the nation's largest carrier, has its feeder American Eagle flying just 25 jets with 70 seats, none of them first class. It could fly 25 more but has chosen not to. The contract is even stricter at Continental Airlines Inc., allowing no regional jets with more than 50 seats. It plans to add 74-seat propeller-driven planes to be flown by a feeder carrier but those planes also won't have first-class seats.
"It's kind of ironic," Abbey said. "By avoiding bankruptcy they're actually relatively constrained compared to those carriers which have been able to modify work rules in bankruptcy."