Biography for William Swan Chief Economist, Seabury-Airline Planning Group. AGIFORS Senior Fellow. ATRG Senior Fellow. Retired Chief Economist for Boeing Commercial Aircraft 1996-2005 Previous to Boeing, worked at American Airlines in Operations Research and Strategic Planning and United Airlines in Research and Development. Areas of work included Yield Management, Fleet Planning, Aircraft Routing, and Crew Scheduling. Also worked for Hull Trading, a major market maker in stock index options, and on the staff at MIT’s Flight Transportation Lab. Education: Master’s, Engineer’s Degree, and Ph. D. at MIT. Bachelor of Science in Aeronautical Engineering at Princeton. Likes dogs and dark beer. (bill.swan@cyberswans.com) I am an economist. Everyone thinks an economist can predict the stock market. If I could do that I would be so rich I could own Boeing Aircraft Company. Instead, it is the other way around. Scott Adams

RJs – Smaller than You Think A Review of the Evidence: RJs are eroding 100-seat market Small plane market growing slowly

RJ Share is Exaggerated Share of added airplanes* = 38% Share of scheduled departures = 16% Share of scheduled airplanes = 14% Share of seat departures = 7% Share of seats = 5% Share of ASK = 3% *airplane count from scheduled departures and miles. Added 2003 to 2004.

Macro View: Below 120-seats is Small

ASKs Below 120 seats Growing Slowly (1.3% since 1991)

New RJs Retiring Props, Old RJs, & 100-seats

6-8% of ASKs not Boeing or Airbus

Asia Not Featuring RJs: Too Poor & Too Far

Europe Favoring 100-seat Jets

N. America is King of the New RJ

Other Regionals are Similar to Asia

New RJs Since 1995 Market for <120-seats growing at 1.3%/year Compared to 4.6% for total ASKs New RJs have grown to 28% of these ASKs Old RJs are still 9%, from 8% in 1995 Props are still 13%, from 18% in 1995 Jet-100s (90-120 seats) are still 51% Down from 73% in 1995 Most of this is in North America Where Union Pilot Contracts favor RJs Still room to grow within this market