Newspaper article THE JOURNAL RECORD

Soaring with Regional Jets

Newspaper article THE JOURNAL RECORD

Soaring with Regional Jets

Article excerpt

CHICAGO -- U.S. regional airline stocks are soaring, and investors have a new reason to expect them to at least keep pace with the rising shares of national carriers: the regional jet.

The shares of carriers that mainly bring passengers from hub airports to small and medium-sized U.S. cities have climbed since they began taking delivery of the jets. Purchases of the revenue- boosting aircraft will take center stage at a regional airline conference this week in McLean, Va.

The jets, which often replace slower turboprops that use turbine engines to power propellers, are able to fly greater distances, reach more cities and carry more passengers. Their growing use comes as a strong U.S. economy boosts travel and helps increase shares of regional airlines such as ASA Holdings, Comair Holdings and Atlantic Coast Airlines. "Beginning in October, when several of these airlines put the regional jets to work, you were looking out at a significant improvement in earnings and that lifted the whole industry," said James Parker, a Robinson-Humphrey analyst. Atlantic Southeast Airlines, a unit of Atlanta-based ASA Holdings, took delivery in October of the first of 30 Canadair regional jets, with seating for 50, ordered from Bombardier for $600 million. The airline also has said it may buy another 60 of the jets or even some 70-seaters. ASA stock has risen 44 percent to 40 1/4 since Oct. 1, when the shares traded at 28. That's higher than the 29 percent climb in the Standard & Poor's Airlines Index. "With the development of the regional jets, we're just taking advantage of the new technology and expanding" the zone in which the airline will fly, said Atlantic Southeast Treasurer Mark Bole. ASA, which provides shuttle service for Delta Air Lines, can now fly in a radius as far as 1,200 miles with the jets -- more than three times its previous 350-mile radius, Bole said. Delta, which has its hometown hub in Atlanta, recently gave ASA three new routes for the jets to fly through Detroit, Cleveland and Gainesville, Fla. …

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