Air Transport World

High fliers no more: unlike after 9/11, major airline cutbacks are not rebounding to their regional partners' advantage.(ANALYSIS)

AS US LEGACY CARRIERS COME TO grips with soaring fuel costs, the pain is trickling--in some cases pouring--down onto their regional partners. This reversal of fortune comes after more than a decade of impressive growth that saw regionals assume an ever-expanding role in the nation's air transportation network, deploying hundreds of 50-seat regional jets (and smaller numbers of 70/90-seaters) to markets for which slower but more fuel efficient turboprops would not have been practical and to replace and complement mainline jet service in existing city-pairs.

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Following 9/11, major airline downsizing often created new opportunities for regionals able to thrive under growing cost pressure from their larger partners, but that is not the case today. Network carriers are dumping airplanes and cities but they aren't looking to replace the lift with smaller aircraft. That substitution no longer works at today's oil prices. "I don't think anyone is immune," says Les Weal, director and head of valuations for UK-based aviation consulting firm Ascend. "I think there will be a shrinking of the regional airlines, a lot of changes globally and certainly in the US."

Indeed, some regionals are now in the same precarious position as their mainline partners who are struggling to remain financially viable. "I'm not gloom and doom," Senior VP-Delta Connection Don Bornhorst tells ATW. "But I do feel the regionals are in a period of right-sizing." As it moves forward with its merger with Northwest Airlines, Delta has announced plans to cut overall capacity up to 13% by the fourth quarter, which includes reducing capacity flown by its regional partners that currently operate nearly 500 aircraft under the DL code. …

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