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Posts: 755
Joined: Sat Oct 30, 2004 4:18 am

When Will The Regionals Thin Out

Fri Dec 30, 2005 2:07 am

With the merger of US/HP and rumors of UA/CO and NW/DL, it makes me wonder if any regionals are going to join forces. I know Skywest and ASA but nothing has really changed there. So, are any of the regionals going to thin out? There seems to be way to many regionals and not enough work for everyone. Growth, although strong, is slowing down for the regionals. The growth that has happened hasn't been a ton of new routes - well UA and that SAT focus city (what's that all about)...growth at Mesa is because they picked up a number of our routes, Skywest also gaind, but is there a regional who is growing because they fly for a company who wants to start new routes and is trying to gain business? Are we going to see any regionals close their doors? Or maybe I've got it all wrong, wouldn't be the first time.
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Posts: 5276
Joined: Wed Dec 01, 1999 7:12 am

RE: When Will The Regionals Thin Out

Fri Dec 30, 2005 2:29 am

Regardless of legacy mergers, I suspect you will see some thinning of the regional ranks.

Independence Air was once a regional with almost 115 RJ's (CRJ and FRJ). Now, all the FRJ's are gone and Indy is down to barely 50 CRJ's which will likely go when Indy liquidates. So there's one less regional.

Comair has already lost 12 CRJ's and I suspect more will be cut....though it will depend on how much Comair can cut costs and how DL's restructuring goes.

I expect Pinnacle/Mesaba to get thinned down as part of NW's restructuring as well. Even some of XJT's ERJ's may never be transferred, but simply grounded. The only reason we haven't see more RJ's grounded is that many of the planes are leased and the lease holders don't want the planes in the desert. Instead, low-ball bidders keep the planes afloat by undercutting other regional affiliates.

On a more positive note, some regionals will survive and grow despite the collapsing 50 seat market. They will likely lose some 50 seaters but gain more in the 70-80 seat market.