More U.S. Cities Will Lose Air Service as Regional Airlines Struggle to Survive⁠↗

Mesa’s struggles have come amid rising doubts over the future of regional airlines, which account for roughly 40% of scheduled departures in the U.S.

The steep increase in pilot salaries has eroded the cost advantage once enjoyed by the scrappy carriers, some of which are independent while others are owned by mainline airlines. Meanwhile, a shortage of captains has led to the grounding of a large share of the regional fleet and cutbacks in service.

As of April 19, regional airlines had 26% of their 1,835 planes in storage, according to Cirium, an aviation analytics firm. Mesa has 42% of its 143 planes in mothballs. There were 308 U.S. airports in April with less service than in the same month in 2019, 72% of the total, according to the Regional Airline Association, and 11 airports have lost scheduled service entirely, including Williamsport, Pennsylvania, and Ogden, Utah.

Apart from the specter of outright failures, it’s unclear how much more consolidation there could be after the number of regional passenger airlines RAA counts as members has shrunk to 17 from about 90 in 2000.

For the last few years, U.S. airlines have been reducing their use of cramped 50-seat regional jets like the Embraer ERJ145 and Bombardier CRJ100 and 200, which make up a large share of the smaller carriers’ fleet that’s in mothballs. At an average age of 20 years or more, they’re due to be retired soon. There’s no plane of that size in production that could replace them other than the ATR 72, which for all its virtues suffers from the stigma of being a propeller plane in a world of jets. The 70-seat planes in regional service, the E170 and CRJ700, are only slightly younger.

A more imminent option is to replace the aging 70-seaters with the larger E175, which accommodates 78 to 88 passengers. But to protect their jobs, mainline pilots have included so-called scope clauses in labor contracts that limit the number of small jets to which big airlines can outsource flying. That means regional airlines would have to strip new E175s down to 70 seats. It’s not clear that makes economic sense, according to Miller.

Regional airlines are expected to end up with smaller fleets concentrated on their 76-seat CRJ900s and E175s, which are younger on average. The result: small cities will continue to lose service. That’s a trend that’s been going on since the 1980s, but it’s now starting to impact medium-sized metro areas. Last year, Toledo, population 268,000, became the largest city to completely lose air service from the three big network carriers: Delta, United and American.

In addition, he says there’s a limit to how much the major airlines will let regionals shrink. “Even though our costs may be at the point where all the flying isn’t profitable, they want the network coverage, because if they don’t have it, it starts hurting them in other areas,” he says. “No one is going to say, ‘You know what, we’re just not going to fly to Des Moines anymore, or Baton Rouge.’”