1. U.S. REGIONAL AIRLINES C/R AIRLINE NEWS EXECUTIVE FORUM Nov. 1, 1999, Alexandria, VA USA “The Regional Jet Service Debate” Debby McElroy, Vice President Deborah_McElroy@dc.sba.com Regional Airline Association

2. U.S. REGIONAL AIRLINES zRecent Trends zGrowth Projections zConstraints to Growth

3. REGIONAL AIRLINES zIn 1998 there were 97 U.S. regional airlines z17 of the top 20 regional airlines have been providing scheduled service for over 10 years.

4. RECENT TRENDS z Number of regional airlines declined 57% since 1978

5. ENPLANEMENTS

6. REGIONAL AIRLINE PASSENGERS z60 - 65% are business travelers zPrefer boarding via loading bridges zDesire plane-side baggage checking zDesire regional and major partners have adjacent gate areas

7. CODE SHARING z 53 code-sharing agreements y13 regionals owned by majors/nationals y3 partially owned by majors y37 marketing agreements yCode-sharing regionals transport 98 percent of industry passengers

8. AIRPORTS SERVED 1984-99

9. AIRPORTS SERVED z 773 in North America z 717 in United States z 462 in 48 States z 288 airports in the 48 states (62%) are served exclusively by regional airlines

10. AIRCRAFT

11. U.S. REGIONAL FLEET

12. AVERAGE SEATS PER AIRCRAFT

13. REGIONAL JETS

15. GROWTH PROJECTIONS

16. SOURCES OF GROWTH zSupplemental service with major partner zNew city pairs zIncreased service to existing markets (increased frequency/larger aircraft) zRoute transfers from major partners z30 - 50 seat regional aircraft (jets and turboprops) may be exempt from slot restrictions for service to cities with fewer than 2 million annual enplanements (FAA Reauthorization legislation)

17. REGIONAL JETS zOrders for 537 aircraft (as of September 30, 1999) y113 ERJ 135 y55 Fairchild 328 y30 Fairchild 428 y52 ERJ 145 y197 Bombardier RJ y82 Bombardier RJ700 y8 Avro 85

18. REGIONAL JETS z“Options” for 804 aircraft y165 ERJ 135 y95 Fairchild 328/ Fairchild 428 y159 ERJ 145 y257 Bombardier RJ y128 Bombardier RJ700

19. FUTURE PROJECTIONS zFewer regional airlines zNumber of cities served continues to decline zLarger, faster aircraft

20. REGIONAL AIRLINE FLEET 2004?

21. CONSTRAINTS TO GROWTH z Constrained ATC System z Airport Capacity Limitations z Labor Issues z Regulatory Costs z Environmental Issues

22. LABOR ISSUES z Scope Clauses z Union Contracts z Pilot Hiring z Shortage of Mechanics