The regional airline business lost more of its luster last week, when Delta Air Lines announced it would retire its entire Saab 340 turboprop fleet and “adjust” flying in 24 small markets, 16 of which benefit from Essential Air Service subsidies.

The move, announced as part of an effort to stem $14 million in annual losses, means less work for the Delta Connection affiliates that serve the routes. But, perhaps more significantly, it also reflects a wider willingness on the part of network carriers to sever small communities from the air-transport grid.

To no one’s surprise, 52-percent load factors no longer rate as acceptable to an airline whose system-wide loads last year averaged 83 percent. Today’s fuel prices have simply rendered the operation of half-filled airplanes–even turboprops on federally subsidized routes–unviable.

“While Delta would prefer to continue serving these communities, the new reality of mounting cost pressures faced by our industry means we can no longer afford to provide this service,” said Delta in a statement. “As we continue to strengthen our business, Delta is retiring the Saab turboprops and some 50-seat jet aircraft, which will hinder the financial viability of serving these smaller markets.”

Now flying 370 fifty-seat regional jets, the various Delta Connection carriers will lose a further 51 regional jets by the end of 2012 under Delta’s plan to let leases lapse on its oldest CRJs.

Unfortunately for the rest of the U.S. regional airline industry, the trend won’t end with Delta, as long as fuel prices remain too high to operate 50-seaters profitably and new training and crew costs, associated with the regulatory fallout from the 2009 crash of a Colgan Air Q400 outside Buffalo, take hold.

Of course, the regionals will hope to find refuge in larger jets, but unless another round of scope-clause talks results in allowances for more 76-seaters or even 90-seat types, that avenue for growth looks like a dead end. The last round of scope-clause movement came as a result of mainline bankruptcies. Today’s environment, in which the majors have actually turned a profit, appears far less conducive to any sort of willingness by mainline pilots to cede any flying to their regional brethren.

Alas, for the first time in decades, the regional airline industry looks poised for an extended period of stagnation, as well as, according to research engineer Bill Swelbar of the MIT International Center for Air Transportation, further industry consolidation and perhaps even outright liquidations.

“The growth was a bubble,” Swelbar told me. “I think that we’ve all learned enough lessons in economics that we should be really concerned when we see a line that goes straight up. And that’s exactly what happened in the regional space. It was hypergrowth.

“At this point,” he continued, “the growth opportunities are just not there and, arguably, I would say that in some of the regional space we’re still over-served a bit.”