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Feb. 11--Smaller jets once reserved for short hops to cities like Des Moines, Iowa, are taking on a larger role at Chicago's O'Hare International Airport, squeezing both passengers and city revenues.
United and American Airlines, the airport's two major tenants, schedule about two regional jet flights for every one flown on far-larger Airbus or Boeing jets at O'Hare, according to data compiled by OAG for the Tribune.
Ten years ago, the numbers were reversed: American operated two traditional jet flights for every flight by its American Eagle regional jet subsidiary. United flew three flights for every flight subcontracted to its United Express carriers. The airlines are making the changes mainly because the smaller jets are cheaper to fly, and experts say there is likely no going backward: In the future, domestic flights of two or three hours will likely be flown by smaller planes.
Most passengers aren't thrilled by the trend, especially as the smaller jets are increasingly deployed for travel to such big cities as Boston, New York and Miami that were once exclusively served by larger planes. Some travel Web sites even provide a box for customers to check if they want to avoid flying on small planes.
"The bottom line is that the regional jets are just not as comfortable," said longtime United customer Richard Fennessey.
Although an improvement over the turboprops of earlier eras, the smaller jets, which seat from 30 to 70 passengers, offer less room for passengers and their bags. In many cases, their flight crews aren't employees of the larger carrier, a fact fueling labor tensions at airlines and safety concerns among regulators.
The implications go beyond the surprise some passengers feel at the gate. The growing dependence on smaller jets by United and American is straining O'Hare finances.
Regional jets provide the city with lower landing fees, which are adjusted on a sliding scale according to a plane's weight.
The ascent of regional flying at O'Hare coincides with a sharp drop in passenger traffic at the airport, which is squeezing the airport's budget and contributing to heightened tensions between city officials and airline tenants.
About 20 million fewer people will travel through the airport in 2010 than in 2006, city budget projections show, contributing to a sharp decline in the revenue the city garners from parking and concession sales at O'Hare.
To compensate for this shortfall, as well as prepay some long-term debt, the city has imposed a 38 percent landing-fee hike and a 15 percent to 17 percent terminal rent increase. The higher fees would make O'Hare the second-most costly airport in the U.S. for carriers, according to the International Air Transport Association, an airline trade group.
The airlines are balking at the fee increases, which they claim are unnecessary and "fiscally irresponsible."
Chicago needs to find a way to postpone increasing costs that the airlines pay and put together a financing plan that would win airlines' support for the final phase of O'Hare's planned $15 billion expansion, said Mary Rose Loney, a former Chicago aviation commissioner who is an airport consultant.
"That keeps airlines at the table working with you," Loney said. "Right now, the two sides are colliding on how to fund major capital improvements."
Chicago Aviation Commissioner Rosemarie Andolino said she expects the airline business will rebound strongly and that there will be a return to larger planes.
"We would love that in the future every aircraft coming to O'Hare will be a larger gauge, because that means more passengers," she said.
But as United and American start to increase service heading into summer, after deep cuts in operations during 2008-09, the growth will largely be on the wings of smaller aircraft, OAG data show. For the first half of 2010, United is cutting traditional jet flights at O'Hare by 13 percent, while boosting regional flying 21 percent compared to the first half of last year; American is trimming its flying by 7 percent and increasing operations on regional affiliates 17 percent for the same period.
"We're matching the number of seats to customer demand," said Andrea Huguely, a spokeswoman for American Airlines.
Airlines' increased reliance on regional jets is here to stay, , aviation consultants said. That's because jets seating about 70 people are far more economical on many short-haul routes than Boeing 737s, Airbus A320s and MD-80s that are twice as large.
"It's the optimal size for most markets," said aviation consultant Darryl Jenkins.
O'Hare enjoys one big advantage over other U.S. airports. It is the only airport that serves as the hub for two major airlines offering extensive rosters of international flights, American Airlines and Chicago-based United Airlines.
But two such powerful airlines also create obstacles for Chicago officials who are trying to line up huge sums of money to finance redevelopment of O'Hare's south airfield with new runways, taxiways, terminals and aircraft parking gates.
The airlines, citing their need to conserve funds, are seeking to kill or postpone indefinitely spending on items that they consider luxuries or just plain bad ideas, such as the proposed western terminal complex.
There are sources of revenue that are solely controlled by the Chicago Department of Aviation: city fees associated with the airport parking garage and surface lots, rental cars, food and beverage concessions, and newsstands and gift shops, among others.
However, projected revenue from those operations is under pressure in 2010, due to the recession and a corresponding decline in the number of flights and passengers at O'Hare.
An increase in O'Hare parking rates this year will likely reduce the decline in city parking revenue. The Department of Aviation's 2010 budget forecast parking revenue at O'Hare at $108.4 million. That's down only slightly from a 2009 year-end estimate of $108.8 million. But that estimate was too optimistic. Actual parking revenue in 2009 was about $89 million, according to revised data the department provided Wednesday.
Non-parking concessions revenue is projected to decline to $95.4 million this year, from an estimated $98.3 million for full-year 2009, and far below concessions revenue totaling $180.5 million in 2007, city records show.
Aside from those revenue sources, O'Hare has few options to generate money other than the traditional sources of general airport revenue bonds, Federal Aviation Administration airport improvement program grants and a portion of passenger ticket taxes.
For United and American, a major element of their strategy is the increasing use of regional jets, which are produced by such companies as Bombardier and Embraer. The smaller jets, which fly as fast as the larger ones, are cheaper to operate and their pilots earn less money. The airlines also can offer more frequent service to some destinations more economically.
United is using 70-seat jets to take over much of the flying once handled by its fleet of Boeing 737s, which were retired in 2009. The jets enable United to provide the same number of flights to key business airports like New York's LaGuardia, as well as amenities like first-class seating, Economy Plus and no middle seats in coach, noted United spokeswoman Megan McCarthy.
American is also shifting to the Chicago market 70-seaters that will be outfitted with a first-class cabin, Huguely said.
Businessman Bryant Waters, who logs more than 100,000 airline miles each year, said 70-seat jets like the Embraer 170 are a "very nice aircraft." But he prefers United's regular flights, where he has access to snacks and meals, as well as Channel 9, which broadcasts air-traffic-control conversations.
"Of course, the [Embraer 170s] are an improvement over the old retired 737s, but I avoided those, too, when they were in service," added Waters, who is CEO of TripKick, a travel site.
