Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, January 31, 1993 TAG: 9301290439
SECTION: BUSINESS PAGE: B-1 EDITION: METRO
SOURCE: DANIEL HOWES STAFF WRITER
DATELINE: LENGTH: Long
A FLYING SUCCESS
THERE'S a quiet revolution taking place at Roanoke Regional Airport and others like it.While the nation's major airlines hurtle towards a third consecutive year of massive losses, many of the 145 regional carriers that serve smaller cities are posting profits, expanding their networks and buying larger, more comfortable aircraft.
The result: More frequent service by regional carriers to major hubs dominated by USAir, Northwest Airlines and the Big Three - American Airlines, Delta Air Lines and United Airlines. And since last summer, Western Virginia travelers have warmed to Northwest Airlink's new service between Roanoke and Detroit - a new Northwest Airlines gateway to Europe and the West Coast.
"I think a majority of people are comfortable now," says Heinke McDade, owner of McDade Travel Inc. in Roanoke. Even though some skittish passengers eager to avoid small aircraft still drive to Greensboro, N.C., or Washington, regional airlines often provide "a good schedule, a good price [and] fabulous connections in hub cities."
Gone - or at least diminishing - are the days when travelers would show up for a commuter flight only to find it abruptly canceled. And the tiny, cramped, unpopular commuter aircraft that some customers have tried assiduously to avoid are being replaced by quicker, more spacious aircraft complete with flight attendants and a restroom.
"The amenities of the aircraft and the technology have made it a whole lot easier for passengers riding on the regionals," says Barron Beneski, spokesman for Sterling-based Atlantic Coast Airlines Inc. The airline will operate from Roanoke as United Express starting April 1.
Most important, perhaps, the numbers work: Turbo-prop or jet-prop aircraft are less expensive to operate and maintain than larger jets - depending on current fares, fuel costs, length of flights and company overhead - and need to fill fewer seats per flight to break even. Worse, jets used for shorter hauls to smaller cities serving up fewer passengers drive costs even higher.
Enter the regional airlines. It's no mistake that Minneapolis-based Mesaba Aviation Inc., operating as Northwest Airlink, inaugurated service between Roanoke and Detroit just as Air Wisconsin dropped its United Express jet service between here and Chicago last September.
"The outlook for the regionals is very good," says Deborah McElroy, vice president of the Regional Airline Association in Washington. "The majors, because of their equipment, have concentrated on the long-haul market."
For smaller carriers, that spells opportunity.
WRA, a tiny airline, last year introduced service to Richmond after USAir nixed its service between here and the state capital. The company uses two six-seat Piper Navajo aircraft for two daily runs to Richmond.
And Northeast Express Regional Airlines of Manchester, N.H., recently jumped at the chance to offer non-stop service to Newark, N.J., billing it as Roanoke's "fastest way" to reach the New York metropolitan area.
The market, even - or especially - in the airline industry, abhors a vacuum.
"As the majors start abandoning these thinner routes, the regionals are seeing more opportunities in providing point-to-point service in smaller markets," says Mark Courtney, the Roanoke airport's marketing director. Increasingly, that's good news for travelers who used to fret about declining jet service to their home airport.
But where does all the industry turmoil leave the hub airports developed across the country by airlines big and small?
In limbo.
Billions in losses have forced major airlines to "rationalize" their service network, industry officials say. Consequently, underperforming hubs have been abandoned or scaled back; unprofitable jet service has been cut or directly ceded to a regional carrier, many of which are owned by - or have marketing ties with - the majors.
With the exception of WRA, the nine regionals operating out of Roanoke have ties to the major airlines, enabling travelers to connect with jets at eight hubs scattered across the eastern third of the country.
That's music to the ears of travel agents like McDade, who says new clients who've recently moved to Roanoke from the Midwest marvel at the quality of Roanoke's air service - the choice of carriers, the frequency of flights to a wide array of hubs.
Courtney, however, worries that newly-found vigilance in the executive suites of major airlines might result in less extensive development of new markets and some hub consolidation, limiting the choice of hubs favored by Roanoke-based travelers.
Roanoke already has felt the industry's troubles: Eastern Air Lines service disappeared; United Express dropped flights to Chicago; USAir cut service to Richmond and dropped a flight to Pittsburgh. But a USAir-affiliated regional airline, Chautauqua Airlines, still offers eight daily departures to Pittsburgh's brand-new airport - second only to Atlantic Southeast Airlines' nine daily departures to Atlanta.
By many accounts, Atlantic Southeast Airlines Inc. is the success story that proves regional airlines are the industry's future.
With hubs at Atlanta's Hartsfield International Airport and Dallas/Fort Worth International Airport, Atlanta-based ASA has pushed operating revenues and net income skyward even as other airlines - larger and smaller - have struggled.
Operating revenues for 1991, the most recent year for which annual figures are available, jumped to $222 million from $187.2 million the year before. And net income for the same period increased 28 percent, rising to $32.5 million from $25.3 million.
"We really have a niche," says Rob Gustafson, ASA's regional sales manager. "We're not doing it the way everybody else is doing it and that's why we're doing so well. We're the most profitable airline in the United States and have been for the past two years. Some of the markets we went into this year we were looking at five years ago."
Roanoke has proven to be one of ASA's largest and most profitable markets, he says. Today, the airline adds a ninth daily departure to Atlanta, enabling Roanoke travelers to connect with all but the earliest of Delta's departing flight "banks" there.
Delta jets should be next, if ASA's past experience is any guide. "Where we've gone up to nine flights a day, Delta has gone in with jets," Gustafson says. "We open up new cities where there's not any Delta service now."
But don't bet on seeing Delta jets zooming in and out of the Roanoke Valley anytime soon, officials warn. Widespread losses are forcing airline schedulers to look longer and harder at new markets even as they jettison underperforming ones.
"Delta has put route expansion on hold systemwide - or at least that's what they're telling us," Courtney says. "That doesn't mean there aren't going to be some exceptions here and there."
Indeed, Delta jets between Roanoke and Atlanta seem a likely possibility, several sources say, sketching out an arrangement that would have Delta fly during peak times with ASA flights rounding out the daily schedule. But it may cost Roanoke.
"I'll make a prediction," says Ted Moomaw, president of World Travel Service Inc. "If Delta comes in here with jets, you'll see Roanoke lose USAir jets, probably to Charlotte."
Roanoke's market, buoyed by an unusually strong segment of business travelers, can be lucrative for several airlines. Up to a point, that is.
The valley's proximity to so many eastern hubs doesn't necessarily help airport officials here make their case for more costly jet service. The valley is big enough and close enough to major hubs to warrant frequent service, but not quite big enough for sustained jet service. If the valley's population growth and passenger traffic trends hold true, that borderline predicament likely won't change.
Consider the case of Comair, a regional airline based in Cincinnati that currently offers three daily departures from Roanoke to its Delta-dominated hub 282 air miles farther west.
The airline is set to take delivery this month of the new Canadian Canadair regional jet, a 50-seat aircraft that will make its American debut with the Delta-affiliated carrier. Roanoke, of course, would like to see a Canadair built into its Comair schedule.
It's not likely, Courtney says, because the valley is too close to Cincinnati to make service profitable. The airline has told Roanoke officials it is reserving the new aircraft for flights of 400 miles or more - because that's how the company figures it can offset the increased costs of flying the new jet and perhaps grab bigger shares of selected markets.