New Regional Jets Boost Domestic Competition, Giving Business Travel Buyers More Choices, Leverage

By Jay Campbell / April 11, 1999

<B> New Regional Jets Boost Domestic Competition, Giving Business Travel Buyers More Choices, Leverage</B>

By Jay Campbell

As other airlines follow early adopter Comair into the growing regional jet game, the new jets are enabling fierce competition on many domestic routes--to the benefit of corporate customers.

As a result, companies in some cities are facing the welcome dilemma of choosing from more airlines with which to do business. Business travelers, meanwhile, are benefiting from greater choice of hubs in which to connect to busy domestic or international routes and more efficient regional travel, often trading connecting flights for nonstop service.

The latest regional jets to enter the domestic system are serving a mix of purposes for the airlines. Some carriers are placing them into previously unserved markets, at times raiding a competitor's hub; others are seeking competitive advantage by upgrading from turboprops to jets; and still others are exploiting the fact that there are fewer seats on the under-100-seat planes in jet to jet battles.

In cases where airlines don't use small jets in competition with one another, such as on nonstop monopolies, they are sometimes improving service by upping the frequency on existing routes with RJs in lieu of bigger and harder-to-fill narrowbody jets, such as B737s.

American Eagle's entry into Knoxville, Tenn., is a prime example of regional jets enabling competition and improving passenger service. The carrier late last month launched three daily nonstop RJ flights to Dallas/Fort Worth, now the westernmost hub linked to Knoxville.

Eagle is expected to grab the majority of market share on the Knoxville-DFW route (see chart), but a battle for the remainder of Knoxville's originating traffic is afoot. Continental Express recently announced plans to launch daily nonstop service between Knoxville and Houston in July, followed by nonstop service to Cleveland and Newark before year-end.