Blue Skies Consultants recently attended the Regional Airlines Association Leadership Event in Washington DC.
This annual event is highly recommended, it is very well run, with good attendance and quality speakers and panelists.
As with many sectors of the commercial aviation market the post-pandemic recovery presents both opportunities and challenges, yet the US regional space has some characteristics that make it an exciting space to be in.
In 2023, 63% of US airports get their only source of service from regional airlines, 31% of scheduled US departures are with regional airlines, emphasizing the importance of the regional market.
Some opportunities and challenges to consider:
- Managing labor shortages, in particular pilot/mechanics. There are many initiatives and programs to bring in and train new personnel, yet the next 3-5 years will require careful navigation of the new hires, retirements, and balancing demand for personnel from the regionals and majors.
- The demand for air services from smaller communities has increased in line with more remote working. The challenge is to solve for higher demand, reduced available fleet capacity vs pre-pandemic levels and higher average gauge as the 30/50 seat regional fleet diminishes.
- Managing an Aging fleet especially CRJs/ERJs and no new build 30/50 seaters anytime soon. It will be interesting to see if the footprint of turboprops in the regional market will increase. The regional (and freight) space is also a likely candidate for new technologies (hybrid, electric, hydrogen etc.) although these will take some years to develop, certify and mature.
- The need for ATC and infrastructure modernization e.g. delays disproportionally affect regionals (lower priority vs international flights).
- Impact of the FAA Reauthorization Act 2024 and rollout (focus on safety, oversight, ATC, consumer protection, airport infrastructure, predictable funding ). The challenge here is to hold stakeholders accountable and ensure that the necessary funding is robust and stable enough to enable players to plan.
In summary, as with other parts of the commercial aviation market, there are many moving parts in the US regional space. The market is growing, the regionals are taking on more capacity to satisfy the positive long-term outlook, we at Blue Skies Consultants are taking an active interest as the various dynamics play out.