U.S. Regionals In for Three Years of Pain
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.”