Deborah McElroy, President of the Regional Airline Association discusses how RAA is working with its members to promote a growth environment that also allows the airlines to operate efficiently and safely.
Q. Who and What is RAA?
A. RAA has been an association since 1975 and is unique in that our primary constituency is the regional airlines. But, we also have our Associate Members which are the suppliers of goods and services to the airlines as well as those who provide services - lawyers and fuelers. Right now, we have 50 member airlines. We estimate that the regionals carried about 88 million passengers last year. The Industry provides service to 98 percent of all of the airports that receive scheduled airline service. However, 70 percent of those airports receive service exclusively from regionals. The Runway has replaced Main Street as the economic driver for small communities across the United States.
Q. What is the definition of a Regional Airline?
A. There is a regulatory definition but it is antiquated. The DOT definition of a regional carrier is one whose revenues are less than $100 million on an annual basis. Many of our carriers have exceeded that. We use a functional definition: A short-haul scheduled airline providing service between small and medium-sized communities and the nation's hub airports, using turbo-prop airplanes between 9 and 70 seats and small jets, generally with less than 100 seats.
Q. Legislation on the table?
A. Right now, our big concern is with FAA reauthorization, which is to reauthorize a variety of programs administered by FAA including the AIP program, which funds airport expansion and recently has been used to fund some of the security measures. While the regionals are growing - we have orders for approximately 600 regional jets to be delivered over the next 4 to 5 years - we are not immune to the financial difficulties experienced by the major airlines. The significant increase in taxes and fees has a disproportionate impact on short-haul service, where passengers are even more sensitive to fares because we (regionals) compete with the automobile in many markets. Changes in our security system since 9/11, have affected many of these short-haul markets.We are concerned that some communities might lose their scheduled airline service. Also, although controversial, we feel strongly about the need to reform the Railway Labor Act (RLA). Airlines and railroads are under a whole different set of labor laws and these laws have not been fundamentally amended since before Lindbergh flew.
Q. What are some of the challenges facing RAA?
A. RAA faces the same challenge that the carriers do - operating in a tough economic environment. One of our constant vigils is to ensure that any regulatory or legislative initiatives really passes the cost/benefit analysis. RAA is constantly working with members to be sure to have timely, accurate, and empirical data to provide to FAA. FAA bases its cost/benefit on a 737, which is more than twice the size of an RJ. The economics are very different. Cost for short-haul transportation is higher, but more importantly, the revenue potential is lower for RJs because the time it takes to recoup the cost of an installation, etc., is longer. Also, FAA does not look at aggregate costs of the regulatory burden. The Air Traffic Control system is a challenge. We are adding new airplanes every year and ATC needs to be modernized to help operators realize the cost benefits of their aircraft.
Q. What are some of the trends/changes you've seen?
A. The critical importance of the regionals. They were important when I joined RAA in 1987 because they were providing air service to small communities, but now it is 1 out of every 7 passengers flying domestically. In the post-9/11 environment, in many markets, the majors could no longer justify service by narrow-body airplanes because the economics had changed. They were able to transition in regional jets and some turbo-props, and air service could continue in those markets. This allowed passenger choice and competition to continue. The RJ is leading the airline industry to returning to profitability. The RJs will continue to be the backbone.
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