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Delta pioneers regional jet revolution

Chris Jasper/ATLANTA While all US majors airlines have embraced the coming of the regional jet, it is Delta that has shown the rest the way. The carrier's regional subsidiary, Delta Connection, already operates nearly 150 regional jets - more than any other airline - while in April, Delta signalled the importance of the RJ in its strategic thinking by striking a massive $10 billion deal with Bombardier for a further 500 aircraft.

Delta's vice president for network analysis, Douglas Blissit, says regional jets "represent the biggest technological breakthrough in the 30 years since big jets were created", although, ironically, the Atlanta-based giant was not initially convinced of the 50-seat jet's viability.

Historically, the smallest jet in the Delta fleet had been the 100-seat Boeing 737-200 (an aircraft now operating with low-cost subsidiary Delta Express), so that, says Blissit, "unless a destination could put a good load on a 100-seat aircraft, and with a good business mix, we could not operate it". This began to change in the 1980s, when Delta and other carriers began offering regional turboprop services on hitherto uneconomic routes, bringing them into networks and offering connections with mainline flights. The big switch came in the early 1990s, however, when Delta Connection operator Comair - then fully independent, and using its own cash - became the first US airline to order Bombardier's 50-seat Canadair Regional Jet (CRJ), taking delivery from April 1993.

"That was a big gamble," says Blissit. "Everyone else said there was no way of making that work economically. Delta supported them - but it was not our dollars". The gamble turned into "a massive success story", Blissit recalls, with Comair deploying the new aircraft aggressively from its Cincinnati hub and making viable sub-100-seat services of 800km (500m)-plus (the effective turboprop range limit, as opposed to 1,900km for RJs).

Customer acceptance was also crucial, with fast, quiet regional jets quickly proving more popular than turboprops which had been perceived as slow, noisy, 'bumpy' and unreliable. "People love the aircraft," adds Blissit. "It has changed the way customers travel to medium and small business centres".

Neither was the RJ's role restricted to minor destinations. The aircraft quickly carved out a niche in offering high frequencies on high density routes such as Cincinnati to Detroit, New York and Washington DC. Though seat costs are higher, its trip costs proved lower. Comair's lead was followed by fellow Delta Connection carrier Atlantic Southeast Airlines (ASA), based in Atlanta, and by SkyWest Airlines, operating into Delta hub Salt Lake City. The CRJ's range also meant that 'raiding' services into rival hubs became possible.

Regional jet feed has become vital to the hub-and-spoke system, and is now central to the economics of mainline operation. "We put more people into Atlanta, Dallas, Cincinnati and Salt Lake, so it's easier to support new big jet services from most points," Blissit says. In Cincinnati, for example, Comair feed equates to 12-15 percentage points of load factor, and without this Delta's own load factor - averaging a respectable 72% - would drop to an non-viable 58%.

Delta's RJ operations themselves have load factors in the 68-70% range, and of 35 passengers on a typical ASA flight, 32 are likely to be transferring onto Delta's large jets.

The RJ revolution has also produced what Blissit terms "some surprising results". Though Atlanta-Boston is hourly, for example, Delta is still able to operate regional jets into some satellite airports, such as Worcester, Massachusetts, which is served by ASA. Manchester, New Hampshire, has meanwhile proved so popular as a regional jet destination that Delta is to relaunch it as a mainline service using 140-seat McDonnell Douglas MD-80s.

Blissit argues that regional jets have also been a boon to the public, and have encouraged competition by improving network development. "Take Charleston," he says. "It was always possible to fly to Atlanta with Delta and Charlotte with US Airways - but now regional jets mean customers can fly to New York and Dallas with Delta and American, Chicago with Delta and United, and Memphis with Northwest."

Regional jets now "cut across all our strategies, and will fly across all our hubs", including Dallas, Blissit says. Feeder service is meanwhile being established into New York Kennedy, while Atlantic Coast Jet, based at Washington Dulles, begins Delta Connection services in the northeast this month. The airline has 25 CRJ-200ERs and 25 33-seat Fairchild 328JETs on order. Slot relaxation at New York LaGuardia has also permitted the launch of 21 services to the southeast which had previously been deemed "too small" for point-to-point operation.

Though Delta claims to have led the way in establishing regional jet operated hub-and-spoke and point-to-point operations, it acknowledges that the rest of the US industry was quick to follow suit, which made it crucial to retain control over the Delta Connection business. This was ultimately achieved last year through the purchase of 90% of ASA and of 100% of Comair. Though Delta says that strong economic motivations underlay both purchases (see related article), it admits that - to a degree - its hand was forced.

Poor standards of service at ASA reflected badly on Delta, with which the smaller carrier's customers were connecting, and although the pair made repeated attempts to resolve these issues, "progress was not to our satisfaction", Blissit says, causing the major to step in and take control.

The Comair situation differed in that the airline provided vital feed into Delta's secondary hub, Cincinnati, yet - in theory at least - was free to switch camp if it saw fit. That prospect appeared less theoretical when Business Express Airlines, which had provided Delta with feed in Boston and LaGuardia, was bought by Delta Connection rival American Eagle in late 1998. Says Blissit: "That woke us up to the fact that the rest of the industry had figured out the way forward, and the best regional operator out there was Comair - but we only had 20% of it." Noises from Comair suggested the airline was aware of its true worth, and Delta was forced to buy the remaining 80% for $1.8 billion.

The April order for 500 more CRJs testifies to Delta's conviction that regional jets will play a central role in future hub and network development, Blissit says, with the airline happy to risk its own money on their purchase.

With 94 firm orders and 406 options, the Delta fleet will grow to more than 600 aircraft, representing a third of all US operated, ordered or optioned RJs. And such is Delta's ordering power that it has been able to specify 40- and 44-seat versions of its 50-seatworkhorse.

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