|BlueSky Business Aviation News|
Regional airline operators have been stymied by the lack of new aircraft although they see the opportunity of serving the needs of millions of travelers they have abandoned at the behest of their mainline partners.
“If I had the right aircraft,” one veteran regional airline executive told me a few years ago. “I’d chuck this entire code sharing gig and start all over. Consolidation and increasing regulations have caused the abandonment of the entire intra-regional airline service I cut my teeth on. The hub-and-spoke system has completely eliminated what made the regional industry so successful in the post-deregulation period - the out and back in one day business trip. Finally, changes to airline service has eliminated the five times daily frequency that appropriately served a market and now you are lucky to have two round trips a day if that.”
My airline president friend and I have observed the changes in the regional airline industry with growing alarm. The post-deregulation period saw the development of hundreds of commuter airlines that served more than 800 markets in the latest evolution of the airline industry. They were taking the place of local service carriers, just as the local service carriers took the place of the airlines that founded this industry in the ‘30s and ‘40s. Today, regionals serve fewer than 400 points.
This natural evolution, however, was severed in the 1990s as increasing regulation and the advent of regional jets increased costs to the point many small communities had to be abandoned. Today, new regulations - the completely silly 1500-hour rule - has cost 50 more communities their air service and the growing pilot shortage is threatening the loss of 200 additional communities valued at $121.5 billion in economic activity and 1.1 million jobs.
The statistics are startling. Studies by MIT & International Center of Air Transportation on changes to air service concluded:
You would think with that description things are pretty dire in the US but there are several trends conspiring to force a change and that is what has me excited. I have not seen this much activity in the lower end of the air transportation market since deregulation. Not only are their new business models but new aircraft and new engines. More importantly, passenger frustrations with the airline hassle factor are driving them to seek alternatives after abandoning air travel to drive.
Consider these statistics from the US Travel Association to understand the opportunity these new business models - the likes for Wheels Up and Surf Air - hope to tap.
Why did these passengers abandon air transportation? A major frustration is on-time operations:
Numerous articles have reported other hassle factors:
Finally, there is this again from USTA:
Overcrowded terminals are part of the problem and within the next decade:
There’s your business case for business aviation. That’s how you convince the CFO to consider business aviation making this the first real opportunity to prove that business aviation can come to the rescue . . . and it is.
Wheels Up and Surf Air have leveraged the growing popularity of paying for subscriptions for service to reduce the hassle and increase frequency. Think Netflix with wings. Each report having 4,000 members, some having membership in both companies. They are doing what passengers and communities want, buying passengers time, restoring the out-and-back-in-one-day trip. They are getting passengers back home for dinner. And, they are connecting communities of interest - between which passengers need to travel.
Others are also noticing. The county that includes St. George, Utah, has contracted with SkyWest Airlines, one of the top regional airlines in the US, to provide nonstop service between St. George and its two top destinations – Phoenix and Los Angeles. These passengers would otherwise have to fly north to Salt Lake City and connect there to get to their destination. This service is now expanding.
As I said, I’ve not seen this much activity since US deregulation and this is only the tip of the iceberg of the gigantic opportunity that exists in the US.
About the Author
Kathryn B. Creedy is a veteran aviation journalist and author who has covered almost every facet of commercial and business aviation.
She began her aviation work focusing on regional airlines in the immediate post-deregulation period. She founded Commuter/Regional Airline News in 1982 building it to become the bible of the industry. Kathryn has written for Forbes Online and is the author of Time Flies - The History of SkyWest Airlines in which she chronicled the post-deregulation history of the US regional airline industry.
Kathryn’s byline has been seen in all of the top aviation publications. Her talents migrated to the web, when she returned to the editorship of C/R News - then called Regional Aviation News - in 2005 and took over editorial management of AviationToday.com. In addition, she founded the VLJ Report, covering the emerging very light jets in the business aviation market.
Kathryn’s work has covered the abandonment of over 400 communities driven by changes in the US airline industry and she sees tremendous opportunities to fill the void in intra-state and intra-regional air transport. She has not seen this much activity in this segment of regional transportation since the 1980s.