US regional airlines: restructuring ahead for the sector?

摘要

After decade of extremely rapid RJ growth and continued healthy profits in the post-September 11 environment, the US regional airline sector has encountered turbulence. Profit margins are declining and there is uncertainty about growth prospects. One key player (Atlantic Coast) has already defected to the low-cost carrier (LCC) camp. Because of the major airlines' continued cost cutting and impending hub retrenchment, as well as likely industry consolidation, the regional sector may see its own significant restructuring over the next few years. What options do the regionals have? Which airlines will remain tied to the major carriers and which will take the LCC route? It was not supposed to be like this. Regional airlines were supposed to be significant beneficiaries of their partners' restructuring. Demand for RJs accelerated in the aftermath of September 11, as United and other large network carriers scrambled to deploy more 50-seat RJs to replace mainline jets in markets were traffic had declined. The RJ was set to play a key role in aiding legacy carriers' financial recovery, whether in or out of bankruptcy.