As more signs of air transport recovery rise out of a global economy still hampered by geopolitical unrest, regional airlines continue to parlay their cost and flexibility advantages into steady gains in traffic and profits, even while their mainline counterparts struggle to reverse the near disastrous effects of 9/11, the invasion of Iraq and the outbreak of SARS in the Far East. In a twist of irony, the crises freed the majors from restraints long imposed by their own employees, a development that accelerated an inevitable shift in the role of regional airlines in the U.S. In fact, only the threat of even more massive layoffs and ultimate bankruptcy finally forced union leaders to accept looser regional jet fleet restrictions–perhaps the most important factor in the industry’s most recent surge of growth.
But despite the regionals’ robust traffic gains over the past three years, a virtual full-time emphasis on supplementing or replacing grounded mainline narrowbodies placed many plans for new market development on hold. Meanwhile, private funding sources virtually disappeared, contributing to a period from the end of 2000 through early last year that saw little more than order cancellations and delivery deferrals.
