A LITTLE JET SET

By AIXA M. PASCUAL/CINCINNATI

Robert Paffenroth, a regional account manager for Lucent Technologies, was relaxing on a recent flight from Cincinnati, Ohio, to New York City. He had left his home in Pittsburgh, Pa., the previous afternoon and flown to Raleigh, N.C., via Cincinnati and at 4:10 p.m. the next day was on his way to his office on Long Island. He had traveled all four legs on Comair's 50-seat Canadair Regional Jets. He was thrilled, a feeling that commuter-airline passengers usually get only in dicey weather. "I have some reservations when I'm told I'm flying a Delta Connection flight," said Paffenroth, uttering the dreaded words that often indicate a slow, noisy, cramped trip in a turboprop. But for him this flight is preferable even to one on a bigger but crowded Delta Air Lines jet.

Paffenroth is one of the 7 million passengers who are basking in the relative comfort, speed and convenience of regional jets--the 50-seat versions of bigger planes like the DC-9 or Boeing 737 that are changing the commuter-airline business and causing reverberations among the major airlines. Introduced in the U.S. in 1993 by Comair, a Cincinnati-based carrier and Delta partner, the twin-engine CRJ, made by Montreal's Bombardier, has become the mainstay of Comair's fleet. The CRJ and a rival regional made by Brazil's Embraer are steadily supplanting turbos. They had been stalled only by pilot unions at American Airlines and United Airlines, which have insisted that their members, not lower-paid commuter pilots, fly the jets.

But that barrier is crumbling under the weight of economics and consumer preference: nearly 200 jets are on order, and by the year 2002 they will replace more than 75% of the turboprops. "There's a rapidly developing dynamic," says Mike Boyd, president of Aviation Systems Research, an aviation-consulting firm. "In the next few years, megacarrier systems--Delta, United and American--will be stampeding to take turboprops out of the system and replace them with jets." Indeed, American's pilots recently agreed to allow the company to buy as many as 67 regional jets.

The big guys were beaten to the punch by Comair, a commuter airline partly owned by Delta that now uses CRJs for 80% of its seating capacity. The carrier is adding one jet a month at least until the end of 1998, with conditional orders for 12 and options for 45. "The regional jet has really allowed them to go out there and serve some markets they couldn't serve with the turboprops," says Robert Holscher, director of aviation at Cincinnati/Northern Kentucky International Airport. "It's allowing feed into this airport by markets that couldn't be served profitably by Delta."

The regional jets have changed the economics of commuter flights and, by extension, the markets that can be served. In smaller markets, most commuting passengers have no choice but to fly on turboprops, anything from the 19-seat Beech 1900 to the 70-seat ATR-72. But the new minijets can fly at higher altitudes and faster speeds than turboprops. Comair had five daily flights from Cincinnati to Appleton, Wis., a paper-industry center, on 30-seat Embraer turboprops. It now has six flights a day to Appleton, five of which use 50-seat jets. Says Michael Fletcher, a service engineer with Voith Sulzer PaperTechnology who travels frequently to Appleton: "This flight puts me in the heart of the papermaking industry in Wisconsin in minimal time." Given a choice, Fletcher prefers to fly on a jet. "When I get off the plane, I'm in much better shape," he says. "The difference is night and day. There's no debate about whether it's better." (Although the jets are more comfortable, there is no indication that they are any safer than turboprops.)

In larger markets, regional jets are being used to complement the big tubes. Cincinnati to New York's LaGuardia is one of the Comair routes that was out of range of the turboprops. Delta, the nation's third largest carrier, is using Comair's smaller jets in at least two dozen cities--among them Minneapolis, Orlando, Kansas City and Philadelphia--to adjust capacity when demand is too low for bigger jets. Delta has pulled 737s or MD-80s out of such cities as St. Louis, Allentown and Wilkes-Barre, Pa., and let Comair offer service. "All our service now from St. Louis to Cincinnati is Comair service," says David Anderson, a Delta executive in Cincinnati. There are even some advantages to the smaller jets. Says Paffenroth: "This is every bit as quick as a large plane, and it loads and unloads much faster. And there are no middle seats."

For the regional carriers and their affiliates, it all means more profits. The Canadair Regional Jet has a sticker price of $18 million, vs. $7.5 million for an Embraer Brasilia, a popular 30-seat turboprop, but because the jet generates higher revenues, it has been profitable for Comair since its first month of operation. It has also fueled growth for Comair. The carrier's revenues have more than doubled since 1993, the year Comair started flying jets, to $564 million in fiscal 1997. Profits have risen meteorically: last year Comair posted net income of $75.4 million, an increase of 291% from 1993. Passenger-load factor, a critical measure, increased to 55.9% last year, from 46.1% in 1993.

The success of the little jets at commuter airlines has forced the powerful pilots' unions at the big carriers to throttle back their opposition to them. American Airlines has finally ordered jets from Bombardier and Embraer, after making a deal with its 9,000 pilots on who would fly them, a contentious point in the negotiations that narrowly averted a strike by the pilots' union earlier this year. American and the pilots have agreed on the acquisition of 67 regional jets, capped at 70 seats, to be flown by American Eagle pilots, who typically earn $35,000 a year--a third of what a big-jet jockey makes. Last month United's pilots also relented, allowing the airline's commuter partners to fly regional jets on some routes.

The pilots conceded that regional jets are the way of the future. Comair plans to phase out its turboprops over the next few years, and Continental, which has received 12 of the 50 Embraer jets it ordered over the past year, is making similar plans. Continental has options for 150 Embraers--more than enough to replace its 100 turboprops. Other commuter airlines flying jets include SkyWest with 10, and Mesa Airlines with seven in its fleet and 10 on order. Atlantic Coast, a United affiliate, will start flying its three jets in December. Two weeks ago, Midway Airlines announced it was purchasing 10 CRJs to increase frequency on existing routes and to expand into smaller markets.

The regional jet has proved a boon to Delta's Cincinnati hub, its second largest. Comair's 253 daily departures have nearly doubled the traffic since 1993, to 4.7 million passengers in 1997, of which half are Delta customers. Delta built a $345 million terminal, and the hub continued to grow even as Delta lost money from 1991 to 1994. The Cincinnati airport last year became the fastest growing among the world's top 72 airports.

Cincinnati is putting competitive heat on Chicago. For Robert Goodman, 38, a consultant for Alpha Delta Group in Atlanta who travels regularly to Madison, Wis., flying through Cincinnati is much more convenient than connecting at Chicago's often congested O'Hare. "I could fly to O'Hare and fly United Express, but the connections are unpredictable," said Goodman as he waited for his connection on a recent Monday morning.

The likelihood that you'll fly a jet on your next short hop is increasing. Next year passenger boardings on regional jets should double, to 14 million. Comair is threatening American's fortress hubs in Chicago and Dallas and competing for traffic from cities like Memphis, Oklahoma City and Wichita. So American had no choice but to acquire regional jets. "For us it's a competitive issue," admits American Eagle spokesman Mitch Baranowski. "We need the regional jet to be competitive with the other regional airlines. For us the regional jet is key to our renaissance as a regional airline." And for the flying public, the regional jet is key to a short trip without painful knees, a sore back and a throbbing headache.