U.S. Regional Carriers Face Multiple Challenges as They Gather for Convention

 - May 28, 2012, 10:40 AM
From left to right, Superjet v-p of business development John Buckley, Powerjet v-p of sales and marketing for the Americas Lucas Aardenburg, acting FAA Administrator Michael Huerta, American Eagle president and RAA chairman Dan Garton, and RAA president Roger Cohen officially open the RAA’s 37th annual convention, held last week in Minneapolis. (Photo: Gregory Polek)

A looming pilot shortage, stubbornly high fuel prices, industry consolidation and new regulations that will require, among other items, first officers to carry an Air Transport Pilots certificate by August 2013 all made their mark on the 37th annual Regional Airline Association convention, held May 21 to 24 in Minneapolis. So too did the recent financial results of the industry’s publicly traded airlines, which now account for two-thirds of the entire universe of regional carriers. During the first quarter those airlines registered their first composite net loss in more than a decade, prompting a blunt assessment from American Eagle president and RAA chairman Dan Garton. “This is a trend that obviously cannot continue,” he said during the convention’s general session.

Confidence that the regional airlines will find a way to reverse the current trajectory nevertheless seemed to prevail, particularly among the industry’s OEMs. In fact, the “challenges” seem likely to breed opportunity for the manufacturers, representatives of which issued some varied projections of the competitive landscape in the coming years.

For example, while ATR North America v-p of marketing and sales Mark Neely virtually discounted the potential for significant change in mainline pilot union scope clauses, Bombardier Aerospace vice president Chet Fuller talked of the likely prospect of looser scope language resulting from consolidation and bankruptcies in North America.

In either case, tough trading conditions continue to boost the case for turboprop-powered airliners. In fact, one of the more intriguing revelations of the convention came from Allen Paxson, GE’s regional and large business aviation general manager, who said the company has engaged in talks with Saab over the possible use of a new turboprop engine on a completely new regional airliner from the Swedish company, which exited the business more than a decade ago. Dubbed the CPX38, the new turboprop design “is ready to go,” said Paxson, noting it could gain certification in 36 months following a launch.

Meanwhile, GE’s competition in the turboprop engine market, Pratt & Whitney Canada, plans a completely “clean sheet” design in the segment called the NGRT (Next Generation Regional Turboprop), featuring new technologies developed for the PW1000G geared turbofan and Pratt & Whitney’s proprietary Talon combustor. P&WC v-p of marketing Richard Dussault placed launch of the NGRT in 2013, first test flight in 2015 and entry into service in 2017.