European airframer ATR’s connectivity conference in Washington DC was aimed squarely at persuading US regional airlines that the future is turboprop-shaped. Leading aviation journalist Kathryn B. Creedy reports exclusively for LARA.
If patience is a virtue then ATR has been exceedingly virtuous over the three decades since the airline industry in the US was transformed by the advent of the regional jet. At its recent Regional Air Connectivity Conference in Washington, DC, the manufacturer turned the turboprop proposition on its head.
“We estimate that there are eight billion intercity trips in domestic US annually, all transportation modes combined,” reported COO Alexis Vidal. “Some 75 per cent of these, or six billion, are within 100 to 400 nautical miles (NM), where the ATR shines. Only 4 per cent of those six billion trips are made by air today versus ground transportation. Even if we convert only a tiny fraction of the people using ground transport into air travel, that’s tens of millions of potential passengers that can travel much faster on an ATR. We could capture them by air service with 30 per cent lower costs than an RJ (regional jet) and an enhanced passenger experience. The ATR offers the modernity and versatility of taking off on shorter runways – half the size required by RJs – and opening up new services. I’m excited about the future.”
There is no question the mind-numbing numbers constitute a powerful argument, but less than a day later, top regional MRO provider MHI RJ Senior Vice President Ross Mitchell hit back with a categorical assertion that the US is a jet market and “always will be”.
The point is, they could both be right. Everyone agreed demand for regional services was at an all-time high and the opportunities from lost points is large.
As the US industry is configured today, Mitchell is right, but the opportunities described by Chris Jones, Head of Region Americas and Managing Director & President ATR Americas, Inc., seem too rich to leave on the table.
Even so, if a more entrepreneurial group were to test fly what turboprops can do to restore service to the 800 communities lost since 2000, then there might be a chance.
If, and it is a big “if” given mainline and union willingness to go after any whiff of competition, it may not fly. This article examines both sides.
An ATR 72-600 being put through its paces at the Paris Air Show 2025
Connectivity
For 30 years, ATR has been trying to break back into the US market with little success. With an industry dominated by mainline partners who have weakened the impact of regional airlines in dictating the aircraft used, economics gave way to paxex and the quest for “seamless service.”
Mainlines and regionals never promoted the generation of turboprops that came online in the mid-80s and, the first regional jet proposed by Shorts in 1987, put paid to aircraft that were still being introduced.
Despite their better economics, mainline airlines rejected the turboprop in the 1990s as the CRJ 200 and the ERJ 145 came online with the loss of 800 points. Points that were left later fell to daily frequencies that never exceeded three and ultimately the high costs of the regional jets.
The industry was also transformed from its foundations of serving regions into nationwide networks assigned by their mainline partners.
Opportunity abounds
What ATR is hoping to do is not only restore service – many of which were the bread and butter of regional airlines in the 1980s – but also restore some autonomy to the passenger who now opts to drive rather than fly owing to the increasing security and dwell time required at airports.
ATR wants to return to regionalism, serving communities of interest connecting businesses in say Kansas City to those in Indianapolis with point-to-point service. Between 2005 and 2025, in nonstop markets, passengers dropped 77% owing to reduced capacity. In the entire system reduced capacity caused a 35% decline in O&D passengers with the largest decline in the northeastern region followed by the Midwest.
It is not alone in its ambitions. The CEOs who have weathered the last 40 years have long identified the opportunity saying they are just looking for the right aircraft. With the advent of Technam’s P-2012 and Textron’s SkyCourier, it seemed the possibility might be there, but they want pressurized equipment.
Detractors say passengers will never go back to turboprops. But they do every day. The world’s wealthiest individuals take Twin Otters, PC 12s and Cessna Caravans to get to their homes in the Caribbean or resorts in the Maldives.
GoJet CEO Rick Leach test flies ATR’s new High Line interior.
ATR’s Hub & Spoke system
All this – the return of the turboprop and point-to-point service – is sacrilege to the hub-and-spoke system. The question is whether the current crop of capacity purchase (CPA) carriers can field their own brands to provide this service or whether anyone can surmount the barriers to entry to provide something different.
That is, of course, already being done by JSX – point to point, premium service – which is introducing the ATR into its operation later this year. An indication of what mainlines will think of their partners developing independent service came as Southwest, American and Delta and their unions tried to shut down JSX’s competition by throwing federal regulations at them. SkyWest’s Part 135 service to serve underserved communities met the same fate. Thankfully the mainlines and their unions lost. During the connectivity conference, JSX CEO Alex Wilcox told attendees, the two agencies see it as a model. Still mainline/union attacks suggest a dire picture for CPA partners.
The argument during last week’s RAA meeting between ATR’s Jones and MHI RJ’s Mitchell was illuminating. Both had obvious vested interests, not lost on regional CEOs, in their positions since Mitchell wants his MRO company to keep the jets in the air while Jones wants to add at least a 300+ more aircraft to the impressive 1900 already sold.
In defence of 50-seat jets
Ross Mitchell defended 50-seat jets, saying it’s a myth they are at the end of their lives. “These aircraft were built for 80,000 cycles and most are between 35,000 and 40,000,” he stated vehemently. “The 50-seat aircraft loss has plateaued and they are growing again. Airlines are bringing more 50 seaters back into the fleet. The CRJ and the ERJ are the most effective because they are cheap. You’ve already paid for them and the additional costs for higher fuel consumption will offset the higher spend on a new airplane. The ERJ flies at the exact same trip time as a 737. The reason the 50 seaters declined was the pilot shortage and the fact some routes require greater amenities. The solution is the CRJ550. The 50 seaters do the job and, if airlines are creative, they can continue to fly 50-seat jets.”
Mitchell’s statement came after Jones and Vidal presented their case to regional leaders that the ATR would be an ideal replacement for the 50-seat jets, offering 30% lower operating costs. The manufacturer also built the case for using the aircraft to recapture the communities lost in addition to creating point-to-point services connecting communities where business interests match.
Decoding travel demand
To quantify exactly how many passengers could be converted from ground, ATR invested in a new technology to measure journeys and demand using anonymized GPS data from 80 million US mobile phone users.
“Our findings revealed that 80% of the all-mode mobility (car, rail, bus, air) demand travels between 470 catchment areas across the US,” said ATR Business Development Director Daniel Percy. “We wanted to understand how that mobility demand matches the current air system. We found that 50% of journeys across all modes are outside cities served by the main hub system and do not involve the top 31 catchments. Or to put it another way, point-to-point air services are only serving one fifth of the underlying mobility opportunities. It’s just the tip of the iceberg. That represents a giant opportunity to create new routes.”
Percy reported a potential to convert 38 million trips in the range 100- to 400-nautical miles from ground to air, including some 12 million which are between cities which today do not have any air service at all. This new service requires 300 turboprops, including 100 to satisfy demand coming from a mode shift from ground to air.
“It doesn’t make sense to think that demand has gone away,” said Seabury Consulting Managing Director Airline Strategy Group Rich Scheff.
An American Eagle CRJ-700.
Senior Researcher, Aerospace System Design Laboratory, Georgia Tech Dr. Cedric Justin, who collaborated with ATR, reported there is no replacement on the horizon for the 50-seaters. “Four hundred of those flying in US average are between 20-23 years and retirement happens with they face the 45,000 cycles,” he said. “Between now and 2036 most of the RJs will face retirement and there are no replacements being planned. So, either you’ll have to down gauge and not provide a cabin class aircraft or upgauge again with the consequent loss of frequency or abandonment of more markets. Even the CRJ550, with its makeover will only delay the retirement of the entire RJ fleet by about five years.”
Mitchell further rejected the ATR idea by saying what is needed for regional airlines is an aircraft that fits with the network structure and can fly the current network. He also indicated the product must improve the passenger experience from what it is today.
“The reconfigured regional jets are very similar to the CSeries in what they deliver today with lower fuel burn and operating costs,” he said. “They offer better comfort, better efficiency and already fit the networks. Those are the building blocks to have regionals continue to expand so the 550 will replace for the CRJ 200s. They consistently score as the second highest passenger experience in the United network.
“I don’t think you can beat it with a turboprop which takes 20 minutes longer at its speed and that mean higher costs for crews, fewer rotations,” he continued. “You need an aircraft that to do the same number of routes. This is a jet market and always will be.”
Jones, of course, disagreed, saying what is needed is a platform with superior economics.
“With the ATR we not only have superior economics, but we have a roadmap to transition to the same jet boarding experience, electric energy and then the Evo platform to enter service in the next decade which is future proofing the ATR,” he said.
“I disagree on the speed and the network, but we are not trying to be something for everyone. The majority of routes below 400 nm are ideal, and ATC is not designed to take advantage of the aircraft. Airlines are driven by ATC and, if you look at the operations of both 135 operators and 121, the comfort afforded by ATR is a bigger upgrade in passenger experience.”
The one thing that has never prevailed with CPA regionals is economics. It was the increased cost of transitioning to Part 121 and the transition to jets that led to the loss of service to so many communities.
The debate in the audience was whether current regional leaders opt to rebrand part of their operation to independent service. Indeed, the feeling expressed by small aircraft manufacturers at RAA, such as Electra and Cosmic Aerospace, suggests the CEOs see the opportunities presented by ATR, but fear what might happen should they decide to do their own branded service. These new OEMs suggest a new crop of airline entrepreneurs will be needed to get the industry thinking outside the box. But with advanced air mobility sucking up all the investment, it becomes much harder.
Hundreds of airport routes at risk
Justin, who did not expect regional air mobility to meet the demand since it would be for shorter routes with an on-demand model, identified all the routes at risk and whether they can be recaptured by alternative airports.
“We found when a point is lost travel time increased by 73 minutes for the O&D passengers,” he said. “That results in a 36% drop in O&D passengers or 8% of all passengers who will opt to drive rather than fly. That amounts to 2,550 passengers regionals will lose per route and mainlines will lose 8% of connecting passengers so it will snowball throughout the system. One in 10 airports, or about 33, are expected to lose air service with the RJ50 replacement.”
While the debate rages, everyone seemed to be missing the point that the ATR would replace the 50-seat jets made up of CRJs and ERJ and the CRJ 500 would be a competitor for that replacement. What no one mentioned is the growing concern about aging aircraft.
Regional airports and city officials have been peppering Congress on the loss of air service. The question then becomes whether or not Congress (with increased subsidies, which is not likely) and airline entrepreneurs can resurrect what has been lost and, equally important, whether mainlines will stop attacking the competition.
PHOTOS: ATR, Rob Munro, Kathryn B Creedy, Colin Brown
