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Leeham News and Analysis
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Are the world’s regional airlines dying?
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By Scott Hamilton
June 17, 2023, © Leeham News: Is the regional airline market across the globe dying?
Ed Bastian, CEO of Delta Air Lines. Credit: CNBC.
Many think so. Certainly, the market demand for the regional jet is shrinking in the 10- and 20-year market forecasts. Bombardier withdrew from the market as demand for its aging CRJ family shriveled. Mitsubishi Heavy Industries killed its RJ SpaceJet program as delays and development costs mounted. Bombardier also exited its turboprop airliner business. ATR is now the sole producer of large turboprops outside China and Russia.
Embraer is now the sole producer of regional jets outside of China and Russia, and it doesn’t even want to call the E-Jet a regional airliner.
Regional airlines in the US face a continuing and growing shortage of pilots. Those in Europe face pressure from environmentalists to the governments to ban short-haul flights in favor of trains.
Despite these challenges and the conclusions of some that the regional airline business is dying, regional carriers take exception to these conclusions.
One regional airline official even took exception to the CEO of Delta Air Lines, who concurred with the dead-and-dying trend.
Speaking at the Aviation Week MRO Americas conference in April in Atlanta, Ed Bastian noted that Delta began trending away from regional carriers many years before.
Shifting to the Boeing 717
Following the 2010 merger with Northwest Airlines, the single biggest category of aircraft that Delta had was the 50-seat regional jet or smaller. Delta had more than 500 of these out of 1,200 aircraft. By April 2023, Delta was now out of these aircraft.
“They were clearly the most inefficient aircraft we flew for sustainability, or for maintenance, or for operational endurance,” Bastian said. And “it was something candidly our [pilots] at Delta didn’t really like because they looked at that as someone else taking their job because they were flown by regional carriers rather than by Delta staff. Our owners obviously didn’t like it because it was not a financially profitable service. Every aspect of that told us we had to make a change.”
In 2012, Delta took over 88 Boeing 717s from Southwest Airlines and Boeing Capital Corp (which owned the 717s Southwest inherited but didn’t want for its acquisition of AirTran).
“I think that was the single biggest marker,” Bastian said. “It was one of the biggest underrated moves that we’ve made. Those 717s enabled us to invest in a higher quality experience for our customers.”
Acquiring the Bombardier C Series
Delta went on to order the Bombardier C Series, the OEM’s last gasp in its effort to move away from RJs and into mainline jets. The C Series was a 110- and 130-seat (two-class) jet with a 2×3 coach cabin seating configuration. The financial strain in developing the aircraft pushed Bombardier to the edge of bankruptcy. The company sold the program to Airbus, which renamed it the A220. Delta is now one of the largest customers of the A220.
“Our strategy is to continue with uplift markets and bring higher quality lift to the smaller markets, as they’re operated by Delta and that are feeding the mainline,” Bastian said.
Pushing back
While Bastian didn’t flatly say regional airlines are dead or dying, his trend line was clear. But Bill Donohue, VP of maintenance of Delta-owned Endeavor Airlines, a regional carrier, pushed back on another panel later in the conference when asked about Bastian’s position.
“There’s an effort in the industry today to up-gauge and that is happening, no doubt about it,” Donohue said. “We’re going to fly our last 50-seater at the end of this month, and we will retire all the CRJ-200 fleet. Across the board, there’s an effort to up-gauge the fleet. Today, the Delta Connection Network between Endeavor, Republic, and SkyWest, I think we’re probably flying 37% or 38% of Delta’s daily departures. Maybe over the next few years, that number will transition down to 33% or 34%.
“I don’t see it going away. There’s still going to be a lot of business for the regional airlines out there. The fact is the mainline carriers can’t cover all that flying themselves. It’s not possible. I’m not worried about the future of the regional industry. There’s an up-gauging effort going on right now in the industry. That’s going to happen, but there’s plenty of demand and plenty of flying around here for everybody.”
If someone invents a lean new aircraft the is just right for flights up to 1000nm, quiet, clean and loved by both passengers and airline bean counters, that might change everything IMO.
With only 1 pilot in cockpit it will help the cost.
This is not a single issue situation.
1. We have scope clause. Pilots of larger aircraft get paid a lot more. So for regional s they have to use 76 aircraft because they still have two pilots and those pilot costs are going up (1500 hours required in the US, despite it not mandated that it be 1500 quality/learning hours (boring holes in the sky). I could have easily taken and passed my commercial with 150 hours (250 hours required though now an instrument rating is inserted in those hours).
2. You are not going to fly into Yakamah and pick two passengers with a 130+ seat aircraft.
3. There are close connections by driving to most larger airports that do support a larger jet. But operations are all over the US and there is a solid one between SEATAC and Bellingham that is low cost and reasonably fast (I do hope for a direct express vs all the stops but its still only 3 hours or so).
4. No one can afford to build a 30 passenger aircraft, no one can afford it, no one will buy it. 19 yes with single pilot operation.
5. Departures are not passengers carried, 76 at most for a regional vs 160 or so for a LCA. If all the regional s were gone, what that would do to overall Large Airline numbers? Likely they would still work their way into the system with some dropoff as, its not worth it, we will do one trip every two years.
If there are enough numbers, operations like Cape Air will get into the market but they are not going to try to compete directly with a regional that is supported by a Large Airline.
The 50 or 72 seater “jet” is an carbuncle almost unique to the US market.
90 seats seems to be around the normal lower limit in the rest of the world with the 70 and 50 seater market left to the turbo props.
Just as the 50 seater jet is dead that will happen soon enough for the 76 seater too
The CRJ900 , E190 maybe a better competitor for the 110 seat A220-100 which is optimised for the higher end
The 76 Seat Jet will be in US Service for a long time.
The interesting aspect is the engines are the same date of 2027 for new mfg expiration at least in theory so will the pilot agree to a waiver for an E2 that only carries 76?
Of course airlines can cut a deal for future deliveries and work out some kind of offset for Embraer if they don’t take them.
Still the E175 is the only choice these days.
The attempt to ban smaller regionals flying short flights seems pointless virtue signaling. The amount of fuel used in that activity is tiny and there may not be any savings at all.
Spot on
Flew many an ERJ and CRJ from a regional airport. Most cramped accommodation in the air….felt I had more room in an ATR turbo prop.
I’ll take an old B717 sans the IFE any time!! Bring it on!!