AdAstraPerAspera said:
Here's what I don't understand about the regional airline industry:
As recently as 1998, LNK (Lincoln, Nebraska) was served by mainline aircraft with flights and schedules identical to today. United flew a mix of 727s, 737s, Airbuses, and even 757s. TWA flew DC-9s.
Delta has replaced TWA in the north side of the terminal, but the flight schedules have more or less remained identical to the mainline days-- the only difference being all the flights are now operating on 50-seat RJs. Capacity is now a third of what it used to be.
I understand the RJ revolution and how it started back in the Nineties. I also know how overall capacity dipped in the years following 9/11. But now that the economics of regional flying have changed, what future is in store for cities like LNK? Why do all the airlines have so much less capacity here? Has demand from small and mid-sized cities truly never recovered? Will these cities ever be returned to mainline service, or at least be upgauged to the 76 seaters-- or will they continue to wither away until no service is left? I would be shocked if a state capitol and large-sized university town like Lincoln doesn't have plenty of demand for air service, I just don't get why it isn't what it used to be.
I'll give you some of my WAGs but they're probably not correct. First things first. My mention of the 50 seaters was driven by the recent disclosures by some regional airlines that they can no longer staff some of their 50-seat and smaller obligations. That was a big reason behind UA finally pulling the plug on its CRJ-centric hub in CLE - its outsourced airline told UA that it was having real difficulty staffing the flights. Chautauqua told AA that it won't renew the American Connection 44 seaters because of staffing issues. Apparently there just aren't enough pilots in the pipeline who have 1,500 hours or are close to that level, and that's helping to drive the short-term shortage of new hire RJ first officers. Those new regulations adopted by the FAA at ALPA's urging are doing what ALPA couldn't achieve on its own - create shortages of new pilots that might eventually cause wage increases.
LNK, as well as other capitals and college towns like Topeka, Kansas and Bloomington, Indiana, are all too close to other much larger cities that feature a lot of air travel options. In the case of LNK, OMA is just 55 miles away. While that takes an hour to drive, families on holiday can save serious money if they're buying 4-5 tickets at a time. Same thing with the folks in Topeka who are just 51 miles from Kansas City. Bloomington, Indiana no longer has any scheduled service now that the EAS subsidies were eliminated for BMG; I recall when Britt Airways flew to lots of smaller places in Indiana and Illinois. Britt was later purchased by PeoplExpress. Bloomington is just 55 miles or so from IND. All three of those cities are not small towns and two of them are state capitals. AA doesn't even serve Lincoln or Topeka.
While gasoline looks expensive at $4.25/gal (today's price in Los Angeles), much higher average fuel economy of today's cars plus higher wages (for non-airline employees) means that driving that hour to get to the much larger airport is even an option for some business travelers.
Back when gasoline was 15 cents/gal during the early 1970s gas wars or when gasoline fell to 60 cents/gal in the mid-1980s or when gasoline was about 80 cents/gal in the 1998-99 time period, jet fuel was very cheap and the fuel efficiency of airplanes just wasn't an issue. Now that jet fuel is hovering in the $3/gal range, fuel efficiency is paramount. As you know from your employer's constant financial troubles, fares have not increased in real terms when adjusted for inflation, leading to wage stagnation and wage cuts.
20-25 years ago, when small commuter planes began replacing small mainline jets to dozens of small to medium sized cities, there were places that suddenly had 50 or more flights a day on 19 seaters and 34 seaters and some 50 seaters flown by as many as 10 airlines. Before deregulation, those places may have had one or two mainline airlines with two or maybe three daily DC-9s or 737-100/200s. Under the CAB, fares were high enough to cover most of the costs but low enough that even ordinary people wouldn't be bankrupted if they bought a last-minute ticket, as ticket prices didn't depend on when they were bought.
Today, those 50 seaters just don't have enough seats to spread out the costs of the two pilots and the flight attendant, in addition to fuel-guzzling turbofans. Turboprops are more fuel efficient but the average moron sees an external fan (the propeller) and becomes frightened even though the props are driven by reliable turbine engines. So the fuel efficient props were replaced by less-efficient RJs. At least the 76 seaters have 50% more seats across which to spread the wage costs and they don't burn much more fuel than the 50-seaters.
Will those small places ever see a lot of 76-seaters? I doubt it, unless fuel prices moderate and stay lower for the long term. Perhaps a few 76-seaters, but not 50 of them per day like 20-25 years ago. Southwest still flies mainline planes and soon their smallest ones will seat 143 people. For smaller places that are only an hour away from a big airport, like the three I mentioned above, the lure of WN and its perceived lower fares (even if they aren't reality) will draw traffic away from the LNKs and FOEs of the country in favor of OMA and MCI. In the case of BMG, there are scheduled buses that come and go to connect IU students to IND. Or they can just drive.
Over on Flyertalk, someone in Kalamazoo, MI asked recently if new AA would likely add more flights to AZO and would new AA fly 76-seaters there. Problem again is that AZO is just 45 miles down the road from Grand Rapids, which has lots and lots of air service, some of it mainline. People in Kalamazoo can easily drive an hour to the airport at GRR. Most of them already do, which is why AZO doesn't have many flights.
I don't think the future is permanently bleak. Eventually, there will be enough young pilots with 1,500 hours under their belt and the regionals will be able to hire plenty of new first officers. Higher pay will enable them to keep their pilots. Maybe with consolidation the fewer remaining airlines can push fares up high enough to make profits yet not so high as to push the customers to their cars where they'll drive to the bigger neighboring airports. Mainline planes? Perhaps, but the primary concern for most of these places will be retaining their currrent level of service on 50 or 76 seaters.
