Gregory Polek has spent his entire career in aviation journalism with AIN, starting as a proofreader and assistant to then-managing editor Mary Mahoney in 1995 after serving an internship with&nbsp;New Jersey Monthly&nbsp;magazine and completing his B.A. degree in English/Writing at New Jersey’s William Paterson College. By 1997 Polek accepted a position as an associate editor, covering the regional airline beat for&nbsp;Aviation International News&nbsp;in place of retiring industry veteran Don Anderson. The assignment took Polek across North America and Europe to profile regional airlines varying in size and mission from the likes of floatplane operators Kenmore Air and Chalk’s Ocean Airways to regional jet operators such as SkyWest and American Eagle. Today, in his dual role as Air Transport Editor and International Airshow Editor, Polek writes, edits, and manages AIN’s commercial aviation content while overseeing each of the company’s daily international air show publications in Paris, Farnborough, Singapore, and Dubai. Most recently Polek has assumed oversight of daily coverage of the Helicopter Association International’s annual Heli-Expo convention.

Senior Editor

Gregory Polek

The events of September 11 and the subsequent economic fallout have tested the competitive mettle of airlines worldwide. Thankfully for those that escaped the fate suffered by the now bankrupt Swissair and Sabena, the hundreds of smaller carriers that comprise the often overlooked regional airline sector have supplied a source of relative strength.
Unencumbered by unwieldy administrative burdens and the high labor costs of major airlines, regionals for years have supplied a healthy diet of connecting traffic to hub cities. The agility and efficiency with which they’ve&nbsp; rendered such service later proved equally valuable in supplementing or, in some cases, replacing mainline airplanes in marginal markets. But not until September 11 had airlines, travelers and whole communities benefited so vastly from regionals’ ability to salvage markets incapable of producing enough revenue to support full-size narrowbody jets.
Long an issue of contention between pilot unions and airline management in the U.S., the practice of replacing mainline airplanes with regional jets has until recently existed in something of a quiet vacuum, occurring in pockets of relative anonymity. Emboldened to a degree by force majeure and financial hardship clauses in their labor&nbsp; contracts, however, most U.S. major airlines have openly accelerated the transfer of routes to regional affiliates while reducing their own capacity by as much as 30 percent. As a result, U.S. regional airlines registered virtually no change in revenue passenger miles during last year’s fourth quarter while their mainline counterparts witnessed a 16.5-percent drop in domestic RPMs during the same period.
In Europe, where union-imposed restrictions known as scope clauses have yet to take hold, regional airlines have historically enjoyed more freedom to fly in markets predominately served by major airlines. As a result, European regionals tended to assume more varied forms, flying a more eclectic mix of equipment and route structures than their U.S. counterparts. Despite their differences, the traffic patterns following September 11 nearly mirrored those in the U.S. While mainline carriers registered a 14-percent drop in intra-European revenue passenger kilometers (RPKs) during last year’s fourth quarter, the performance of European regionals–as measured by 36 carriers reporting traffic results to the European Regions Airline Association–showed barely a 2-percent decline.
A Striking First Quarter This year’s first-quarter figures revealed a striking recovery for European regionals, while the continent’s major carriers endured a much slower convalescence (see charts). By February Europe’s regional airlines had already reached double-digit growth rates compared with the previous year’s traffic, while their mainline counterparts had just begun a slow climb toward last year’s RPK levels. As in the U.S., capacity reductions effected by the increased presence of regional airplanes in markets traditionally considered the domain of majors accounted for much of the phenomenon. The most dramatic examples–the complete takeover of Swissair by Crossair and Sabena by Belgium’s DAT–perhaps best illustrate the crucial role regionals played in the recovery of the European air transport industry as a whole. Still, other forces came into play as well, including a fundamental difference in how the public views the security risks associated with the respective sectors, according to ERA director general Mike Ambrose.
“In some instances there’s still separate identification or branding,” reminded Ambrose. “Who would really get upset if a Dash 8 belonging to Bujumbura Airlines is a victim of a hijacking as compared with a Lufthansa 747? Whether we like it or not, there is a difference in scale. The public [doesn’t] perceive the regionals as such a threat, because the political statement from the terrorist act would be so much less.”
Another contributor to the regionals’ comparatively rapid recovery may involve what Ambrose called regional loyalties. “Someone living in a regional point feels more comfortable with a locally based airline,” noted the ERA director. “For example, a businessman living in Nantes might have been flying with Regional of France for years; he views them as a decent bunch of lads; he might know the flight manager because he lives next door to a cousin or what have you.” 
In a twist of irony, Europe’s major airlines may have begun to blur the distinctions that helped lead to the regionals’ recovery this year. In a direct reversal of a trend among U.S. majors to divest their ownership interest in regional partners, European airlines, such as Air France and British Airways, have recently bought and consolidated the operations of their regional affiliates. While U.S. airlines hope to spread labor-related risk and encourage more competition among their affiliates, the Europeans cite a shift in priorities toward more point-to-point service–to counteract big-airport slot limitations and low-fare competition–as the primary impetus for their strategy. Ambrose, among others, wonders about the long-term consequences, however. Regional Lifeboat “I think these are trends that are cyclical,” said Ambrose. “What is interesting is that two majors have been rescued in an Apollo 13-type of activity by their regional partners. The lifeboat has proved to be the regionals. The wheel will turn, but what is important is that on the thin routes, where the no-frills carriers cannot compete, the regional partner does not have its economic opportunities constrained by costs imposed upon it by a major.” 
Of course, threats to the survival of any regional airline have historically centered on the erosion of its cost advantages, and despite the optimistic outlook this year’s early traffic figures seemed to project, the perennial threats to European regional airline growth have not disappeared, warned Ambrose. European airlines in general, but regionals in particular, continue to face disadvantages borne by their governments’ lack of a cohesive approach to ensuring the health of air transport across the continent, said the ERA director general.
“[European air traffic] didn’t plunge as far [as U.S. traffic] partly because we were not the victims and partly because our experience with terrorism in the past forty years has made us somewhat more resilient in these situations,” said Ambrose. “Nevertheless, we were obviously very badly hurt in terms of traffic and profitability.
“We have been granted aid–if we can make a case for it–to compensate for the four days during which U.S. airspace was closed,” added the ERA director general. “It is laughable. [The U.S.] had aid that equates in round figures to the total cost of running the Eurocontrol system for a full year. Eurocontrol accounts for about 4 percent of our total operating cost. Assuming the industry is in a break-even situation, we have had aid equivalent to one-quarter of one percent of our costs, whereas [the U.S.] has had aid equivalent to 4 percent.
“The American government made it very clear, very quickly that it was concerned about the well-being of the American economy. The European governments have not recognized the value of air transport to the overall economy to anywhere near the same degree. That’s partly understandable because the European governments are providing somewhere in the region of 14 or 15 billion Euros a year to prop up the rail system,” Ambrose said sardonically.
ERA fully enjoined the air-versus-rail debate in May, after the European Commission issued a so-called “white paper” that set general goals for transport policy in 2010. Although it did not establish specific target dates, the EC wants to impose further environmental charges (i.e. noise penalties) on aircraft, an agenda Ambrose equates to a justification for more subsidies to high-speed rail links. Of course, regional airlines compete directly with rail links in many markets, leaving ERA members most vulnerable to what Ambrose called “fanatical disciples” of the environmental movement.
“Environmental constraints are set by people who are quite rightfully concerned with environmental protection, but have no willingness to accept the practical realities of what is achievable,” said Ambrose, who ranked environmental constraints as the regional airline industry’s most pernicious threat. “There are very strong moves to impose higher and higher environmental costs on us as incentives to operate the latest equipment. Now, my goodness, we have a very, very young fleet, but you don’t go out, buy an airplane, operate it for two years, buy another one, just because it happens to be the latest. The real world does not work like that.”

Europe’s regional carriers blaze path toward recovery 

The events of September 11 and the subsequent economic fallout have tested the competitive mettle of airlines worldwide.

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