U.S. Regionals In for Three Years of Pain

 - April 8, 2014, 3:10 AM

The U.S. regional airline industry will shrink over the next three years as new regulations governing pilot employment and structural changes precipitated by new, less profitable code-share contracts and pilot-union scope clauses take hold, Republic Airways CEO Bryan Bedford predicted during a February 27 conference call to brief analysts on his company’s fourth-quarter earnings. Now flying nearly 1,000 fifty-seat jets, the nation’s regional airlines will shed more than half that complement over the next two to three years in favor of fewer but larger RJs, shrinking the 50-seat RJ fleet to between 400 and 450, he added.

“There’s a huge premium on being able to operate with the same brand standards as our partners,” said Bedford. “Unfortunately, we’re still in an industry [in which contracts] tend to go to the lowest cost bidder. And I do think that’s something that’s going to have to change as the industry continues to evolve. We’re going to have to figure out who the winners and losers are long term.”