From Aviation Week and Space Technology 2005 May

The 2005 Regional Airline Assn. Convention convenes May 16-19 in Cincinnati. Members will examine ways to meet the great challenges ahead as their symbiotic relationship with legacy partners undergoes transformation in a rapidly evolving industry environment. Transport Editor Frances Fiorino and Midwest Bureau Contributing Editor James Ott compiled this report.

As go the majors, so go the regionals. With that in mind, the Regional Airline Assn. has set its sights on one goal it believes will ensure survival: maintaining cost-effective operations.

"We are greatly affected by the ills of the majors," emphasized RAA President Deborah McElroy. "This is because 99% of air passengers are carried on code-sharing airlines--and code-sharing is the model under which most regionals operate. So key strategic partners are tasked to ensure costs are appropriate--it's the domino effect."

The problem is that the legacies are on unstable ground, and the dominoes have started wobbling. More majors are seeking bankruptcy protection. There is widespread talk of consolidation. Network carriers, strapped for cash, are selling off regional subsidiaries (see p. 58). Airlines without regional partnerships are buying larger regional jets--leaving a dazed industry wondering who's to fly which aircraft and where. As a result, the once-solid relationship between regionals and major partners, and the regionals' bright growth prospects, are threatened.

In 2004, about 90 U.S.

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As the industry's executives gather this week at the Regional Airline Assn.'s annual conference in Indianapolis, they - and some of the small communities they serve - have plenty to worry about.