Monday Insight – August 17, 2020

Getting A Grip On Air Access Realities For The Post-China/CCP Covid Epoch

Small Community Air Access Planning Needs To Wake Up To The 21st Century

…As of 2018, 63% of U.S. airports with scheduled commercial flights were served only by regional carriers, according to the RAA…”


Sleeping Beauty just woke up, apparently, and has no idea of what’s happened during her slumber.

It’s time we all get a grip on the raw realities of the air transportation system… and recognize that the entire economic and consumer underpinnings of airline operations have completely changed in the past 30 years.

The statement from the Regional Airline Association is accurate only to the extent as to which certificated carrier may have pilots the controls of the aircraft. Beyond that, it’s not particularly accurate in the message it implies, which is mainly that it’s “regional airlines” serving these airports. Not accurate.

The Term “Regional Airlines” Is More Than Just Obsolete. It’s very misleading to imply that there is still a separate industry of “regional” airlines that are independently in business, with route systems focused on connecting smaller communities to the air transportation system.

That structure has been stone cold dead for three decades. But because of the continued use of the term, a lot of the media and thin-brained members of congress are clueless. Or have been blissfully asleep for the last two dozen or more years.

The is no independent “regional airline” system, anymore. Most of those in operation are neither regional nor airline brands. They are leasing companies, in effect. They lease crews and the operation of smaller airliners to major carriers.

In point of fact, in the lower 48, there are very few small airlines with any semblance of an independent route system. The main “regional airlines” of yore are now mainly in the business of providing aircraft to major carrier systems, give or take a few EAS markets. They don’t make the decisions on where they will operate… they don’t book passengers… they don’t directly collect fares… their major carrier customer does that. In that regard, it’s not much different from airplanes the airline gets from traditional leasing companies.

The next-tier-down independent airlines such as Boutique and Southern Air Express are not geographically-focused but are in the business mainly of operating government subsidized routes across the country.

So, in point of fact, most of the airports referred to in the RAA quote are actually served by major carriers – AA, DL, AS and UA – using the parts of their fleet that fit the mission. The other implications, such as the contention that corporate demise of some of these operators will deprive small communities of air service, are completely nonsense.

It is a matter of market viability to the major airline system. If a small market has economic value to American or Delta or United or Alaska, they will fly there… period. There won’t be any shortage of small aircraft lift to do so if, unfortunately, one or more of the corporations now operating them cease to do business.

Proposed Federal Support – Is It Really For Air Service… Or A Leasing Company? Another touchy issue is federal support – CARES type – for these entities. Since their revenue streams come almost completely from the large carriers to which they are under contract to lease aircraft, federal support would be difficult to justify, particularly in situations where the declining economics of 50-seat jets make the aircraft un-economic to the major carrier, and which in the future may not want them. United has done so… Delta ditto.

With a shrinking post-China/Covid air transportation system, how long would this support need to last before it became apparent that the aircraft involved no longer had any market need?

Would this mean that other companies in the business of leasing aircraft to major carriers – such as ILFC and Airlease – should be in line for government support as well?

Bottom line: The days of trying to recreate the past, with EAS subsidies and Small Community Air Service Grant programs that mainly delivered results for airports hardly “small” – are over. The misconception that we have a vibrant independent “regional airline” system only gets in the way of recognizing the evolving air transportation system in America.

The U.S. air transportation system will recover, but it will do so within the context of the new economic structure that emerges from the massive damage done by the China pandemic.

And all the king’s horses and all the king’s leakage studies won’t bring the good old days back.

It will not resemble that of 2019, let alone 1980, which it seems is the fantasy goal of a lot of misguided air service planning.


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