US Airways Express operator Chautauqua Airlines is moving to overcome spiralling costs and pilot defections, while trying to mould operations around partner US Airways' requirements.

The operator's new chief executive Bryan Bedford says "the last year has not been very good for Chautauqua-escalating costs and high pilot attrition are impairing on making a profit."

The privately owned airline earned a revenue of $84 million last year, but has yet to release figures for this year.

The former Mesaba Airlines president is respected on Wall St and his appointment as head of the Wexford Management-owned Chautauqua has prompted speculation about the future of the Indianapolis-based carrier.

"He's the perfect president if they wanted to do an initial public offering [IPO]," says a US regional airline industry observer.

Bedford dismisses talk of an IPO and instead claims his focus in the short term is on "improving operational reliability and the economic performance of the business." This hinges largely on US Airways with which 50% of Chautauqua's passenger traffic connects.

As a US Airways Express branded carrier, Chautauqua operates a fragmented network to 28 destinations, ranging from Nashville, Tennessee, to Toronto in Canada. "There is no core to the airline," says Bedford, who adds that there is an "opportunity to rationalise how and where we fly".

Chautauqua has just taken delivery of its first two Embraer RJ-145s on lease from Wexford and is to receive its remaining eight by August next year. The new jets are being used to expand services from Indianapolis with the start of flights to La Guardia and Washington Dulles. Other new Express jet routes will include from La Guardia to Burlington, Charleston, Columbia, Dayton, Grand Rapids and Savannah.

The airline also operates 14 Saab 340s and 19 leased British Aerospace Jetstream 31s. The latter are to be returned over the next 12 months. No decision has been taken on a replacement, but Wexford, which acquired the airline last year, has options on another 20 ERJ-135/145s.

Bedford, having overseen a large Saab 340 operation at Mesaba, says he is not necessarily set on an all jet fleet, but rather on optimising profits. He adds, however: "My sense is that a 37-seat passenger jet operates at the same unit cost as a 37-seat turboprop. This is the future."

Source: Flight International