Hello from bizjournals.com! David Mueller (dmueller7@lycos.com) thought you might like the following article from the Cincinnati Business Courier: http://www.bizjournals.com/industries/travel/airlines_airports/2002/12/09/cincinnati_story1.html Comair will add 700 workers Regional carrier soaring despite industry woes Lucy May Courier Staff Reporter ------------------------------------------------------------ As struggling Delta Air Lines slashes jobs by the thousands, its local subsidiary Comair is adding new jets, new flights and new employees. Comair hired 700 workers this year and expects to add another 700 in 2003, said CEO Randy Rademacher. "We've been able to generate a small profit in an environment that most people will tell you is the worst in the history of the industry," Rademacher said. "We'll be positioned to continue to fly very successfully in the future." Roughly 500 of the new jobs created this year are front-line employees — pilots, flight attendants, customer service agents and maintenance crews — and Comair expects 500 of next year's new jobs to be front-line employees, too. Those additions are net gains over the roughly 2,000 furloughed employees Comair brought back after last year's pilots' strike. Delta doesn't break out financials for its subsidiaries, and Comair wouldn't comment further on its profitability. Still, it's a remarkable turnaround for an airline that, just last year, was dealt a near-fatal blow by the 89-day pilots' strike and then was grounded again by the events of Sept. 11, 2001. But it was Sept. 11, and Delta's reliance on the fleet of regional jets owned by Comair and the other carriers in its Delta Connection network, that helped Comair not only regain ground lost during the strike but continue to grow. Over the past 12 months, Comair has boasted 99 percent completion rates, almost 90 percent on-time arrivals and a big decrease in customer complaints, Delta Connection CEO Fred Buttrell said. "Comair has got a little of its swagger back," said Buttrell, Rademacher's Atlanta-based boss. Indeed, the recent announcement that Comair would fly from Delta's Salt Lake City hub to the West Coast marked the achievement of the airline's long-dreamed-of goal of being a coast-to-coast carrier. Next year, Buttrell expects Comair to add a Cincinnati-to-Key West, Fla., direct flight using one of its new 70-seat regional jets. The regional airline industry has grown since the terrorist attacks, in part because the regionals' larger owners and partners have viewed the smaller jets as important tools to maintain presence in markets that no longer have the passenger volume to support service with larger airplanes, said Deborah McElroy, president of the Regional Airlines Association in Washington, D.C. From mid-2001 through the middle of this year, regional airlines have increased their departures by 41 percent, while the major carriers have reduced their departures by 11 percent, said Douglas Nelms, editor of Commuter/ Regional Airline News in Potomac, Md. "It used to be that the regionals needed the major carriers to survive," Nelms said. "Now it's the major carriers who need the regionals." It's a shift in the industry that's likely to be around for a while, said George Hamlin, a senior vice president at Global Aviation Associates Ltd., a Washington, D.C.-based commercial airlines consulting firm. "This is the wave of the future — a hub reaching out to more markets," Hamlin said. "Comair has paid heed to the saying, 'Never look back — something might be gaining on you.' They've created a big lead, and they haven't forgotten where they've come from." But the short-term success that the regional carriers have experienced since Sept. 11 comes with long-term concerns, especially for those that have partnerships, known as code-share agreements, with major airlines. Such agreements allow Delta and other majors to sell seats on partners' planes. "As a regional carrier, your fortunes are intertwined with your major," McElroy said. "If the major carrier in the long run doesn't do well, that's going to have a long-term impact on the regionals." Rademacher and Buttrell said Delta remains among the best-positioned majors. In October, Delta reported a net loss of $326 million for the third quarter and said it would ground its MD-11 fleet and defer mainline aircraft deliveries in 2003 and 2004. The airline also announced it would cut up to 8,000 more jobs in an effort to bring costs in line with depressed demand. Still, it is better off than rivals such as US Airways, which filed for bankruptcy protection in August, and United Airlines, which likely will be forced into bankruptcy court protection. "We're drowning under a foot of water while the rest of the industry is drowning under 80 feet," Buttrell said. "But we're still drowning." The success of Comair and its other regional carriers has been an important part of Delta's relative financial health. After Sept. 11, Delta was able to maintain flights and market presence thanks to regional jets, which can fly fewer passengers more profitably than Delta's larger, mainline planes. But that has increased concerns among Delta's mainline pilots that the regionals will take over routes with their lower-paid pilots. To protect their interests, the union representing Delta's pilots has insisted on "scope" clauses in the pilots' contract that limit the number of larger, 70-seat regional jets that the Delta Connection carriers can fly. Rademacher understands the concerns of the Delta pilots but views them as short-sighted, pointing out that Delta needs the smaller, regional jets to feed its hubs and feed passengers onto the larger planes that continue to fly to large markets. Buttrell said the scope agreements should not hurt the growth of Comair or other Delta Connection carriers except when it comes to the new 70-seat jets. The scope clauses restrict the number of those new, larger aircraft that Comair and the other Delta Connection carriers can fly. Nelms views even those restrictions as harmful, since they could end up limiting the number of passengers that the regional jets could feed to the major airlines' hubs. The pilots, he said, could wind up protecting their short-term interests at the expense of the airlines' health in the long run. "It's like the lion has his paw on a piece of meat that he's too full to eat, but he's not going to give it to anyone else," Nelms said. But even with such scope clauses looming, Rademacher is confident Comair will continue to grow in 2003 at the brisk pace the airline has grown this year. Comair is going to finish this year with 123 airplanes, Buttrell said, and will finish 2003 with 156 planes. But Comair will continue to work to drive costs out of its operation, Rademacher said. "This is not the environment to be fat and happy in. Let's see if we can be happy without being fat," he said. Copyright(c) American City Business Journals Inc. All rights reserved. You can view this article on the web at: http://www.bizjournals.com/industries/travel/airlines_airports/2002/12/09/cincinnati_story1.html