The announcement on 18 February by French regional airline Brit Air that it was to place the launch order for the 70-seat Series 700 version of the highly successful 50-seat Bombardier Canadair Regional Jet (CRJ) served only to confirm the revolution taking place in France's regional-airline industry.

In placing the order, Brit Air president Xavier Leclerc was not only winning the advantage of a beneficial launch price for the aircraft, but was expressing real confidence in the prospects for his airline.

The same is true of his two main French competitors, Air Littoral and Regional Airlines. According to Air Littoral president Marc Dufour: "There is no industry like it for growth at present". With annual passenger increases reaching 20% in some areas, French regional airlines are having to adjust with unprecedented speed, and have already achieved a major rationalisation of fleets and routes. "Recovery is behind us. Growth is ahead," says Dufour.

The apparent sudden success of France's regional airlines can be traced almost directly to the arrival of the deregulated air-transport market in Europe, and ultimately France, and the resulting disappearance of the rigid state controls over the national route structure. "Now, at last, we can rationalise and optimise our operations so that we can operate more efficiently," says Dufour.

Besides the recent Brit Air CRJ-700 order (for four aircraft in addition to the nine 50-seat CRJs it has already purchased), there was Air Littoral's decision in January to buy seven CRJs to add to the eight already in the fleet, and Regional Airlines' recent order for ten Embraer EMB-145s. "We think jets are what the passenger now expects in terms of comfort," says Regional Airlines' president Jean-Paul Dubreuil, who adds that the aircraft may replace some, if not all, of the airline's existing 50-seat Saab 2000 high-speed turboprops.


Turboprop role

These three biggest regional carriers in France plan to retain turboprops in their route structures, at least for the time being, creating in effect a fleet structure which will allow them to use the cheaper-to-operate turboprops on existing short-range routes while deploying their regional jets to expand services on the longer-range point-to-point services now appearing.

Dufour is clearly happy with the way things are going: "With the arrival of our new aircraft, we will have the youngest fleet in Europe", he says, adding that the regional jets will provide an "essential element" of the future economic success of the airline. "We have a strong interest in purchasing the CRJ-700," he says.

He adds that the rationalisation of the Air Littoral fleet reflects directly the changes taking place in European air transport. "Before liberalisation, it was impossible to be fully competitive. Now, we are in a position to optimise our routes according to market conditions. That is what we always wanted."

In common with Regional Airlines, Air Littoral is pursuing a strategy based around the development of hubs - a policy made easier by the hexagonal shape of France, which lends itself better to "cross routeings" than, for example, the UK with its "long, narrow" profile, permitting a far higher number of potential route combinations.

Accordingly, in late 1996, Air Littoral added Nice as a second hub to Montpellier, which has been working as a hub for north-south connections since 1995. The airport will operate for east-west routes, he says. "We intend to build up both national and international business from Nice- we're already the third largest operator there in terms of passengers carried."

Brit Air's Leclerc, who has recently signed a wide-ranging franchising agreement with Air France, does not, however, share his contemporaries' enthusiasm for hubbing: "We have no policy on hubs. Direct routes take longer to develop than those using hubs, and require more investment, but we are a trans-regional airline and we prefer to ßy our passengers to major destinations and provide the onward service through accords with other airlines."

With a turnover of Fr720 million ($124 million) in 1996 against Fr650 million the previous year, constant proÌts for the past 12 years, and winner of both European and US regional airline-of-the-year awards in 1994/95, Leclerc can reasonably claim to know what he is doing. He says he is targeting an increase in turnover to Fr 1.1 billion for 1998/9.

The new regional jets are central to a route-development policy that will enable Brit Air to promote more longer-range direct flights from its two main operating centres: Rennes, from which 20 destinations are served daily; and Lyon, with 65. These two airports, says Leclerc, "-will remain points of departure to an increasingly developed route structure". He adds that the order for the CRJ-700 four years before it enters service "-is a clear expression of our confidence".

Airport access remains a problem, however, and Dufour says he is "convinced" that secondary airports will have their day, as the major airports fill up and the smaller regionals are excluded. "In the provincial airports, we can have easier connections, and provide a better environment for passengers, which often have to walk a very long way if they are disembarking from a regional aircraft," he says.


Clermont Ferrand success

The story at Regional Airlines is slightly different, Jean-Paul Dubreuil having been perhaps less committed to the hub concept initially, but finding that Clermont Ferrand, which lies almost in the centre of France, became a natural hub as the carrier developed its route structure. "We believe that point-to-point op- erations are more profitable than feeding [to the majors]," he says, adding that Clermont Ferrand, which handles 37% of the airline's activity, is now "-part of our strategy, even though there was no original plan for it to be a hub". He says that Regional Airlines "-was the first" to develop a hub concept of operations. "We showed that the idea could work," Dubreuil adds.

Now, Dubreuil is considering Regional's next move, in the light of its purchase during 1996 of the turboprop operations of Deutsche BA. This immediately opened up new possibilities, one of which was the potential for development of a second hub at Deutsche BA's old base at Stuttgart. "We're still not sure about going in this direction," he says. "We need to check whether it will work in Germany as well as in France. A lot depends on whether German passengers will take to the idea of passing through a hub to get to their final destination."

Dubreuil thinks that the European regional market "-will continue to grow-the majors are still cancelling their shorter-range routes. We have a very important role to play - but what is it?" Freighting, franchising and codesharing all have their place, and as far as Dubreuil is concerned, "-we won't depend on any one system. We think flexibility is the key."


Continued growth

Whatever the answer, the fact is that passenger growth continues, with Brit Air passing 1 million for the first time in 1996, Regional Airlines recording a 22% increase during the year, to 408,000 passengers, while the larger Air Littoral saw a growth of 200,000, to 1.7 million.

Policies on partnerships vary, although the general trend is the development of feeder services for the majors. Brit Air's move towards Air France was an extension of the existing relationship between the two carriers on the Paris-Southampton and Rennes-Paris routes, and will see the Brittany-based carrier operating, under Air France flight numbers, a host of domestic and European routes considered more suitable for 50- to 70-seaters. Leclerc promises, however, that Air France "-will not be taking a stake in my airline". Some note, however, that the decision to strengthen the relationship with the national carrier came after Leclerc had expressed publicly the intention to reduce, rather than increase, contacts with Air France.

Regional Airlines' Dubreuil says that he is committed to "multiple links", to avoid dependence on any one major. The airline already has longstanding partnerships with Iberia and Air France, and from April, began operating the former KLM-operated Marseille and Amsterdam SAS-operated Lyon-Copenhagen routes, as well as Swissair's Toulouse-Zürich and Stuttgart-Geneva services.


Air France links

Links with Air France Europe will be reinforced, with a second aircraft joining the first to operate Nantes-Lyon and/or Toulouse-Lyon. Today, Regional Airlines operates more than 170 daily flights to 17 metropolitan destinations and ten European capitals.

Air Littoral operates 41 national routes (39 transverse and two radial) and nine direct international routes under its own colours, while its links with Air France, to operate freight services, yield a further 29 destinations. Dufour admits that Air Littoral is "a bit late" in cementing ties with other majors. "We're looking at several European airlines," he says, adding that he took seriously a recent comment by British Airways that "-the conquest of Europe will be done by regionals".

Source: Flight International