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- U.S. regional airlines will be forced to park aircraft alongside their mainline counterparts to meet scope clause requirements, however this capacity reduction will be largely limited to the big airlines wholly-owned regional subsidiaries.
- Independent regionals such as SkyWest Airlines and Republic Airways are well positioned to manage capacity reductions through contractual negotiations in the short-term, and for long-term growth as the major airlines look to maintain network breadth with off-balance sheet options.
- The independent regional airlines have historically done better during longer periods of major airline distress.
As the request for U.S. government support to combat the economic effects of coronavirus makes its way through Washington, the fate of the regional airlines remains in question. The crisis has already taken an immediate toll.
Related: Coronavirus plunges aviation into singular event, traditional recovery models useless
Two U.S. airlines, both regional carriers, Trans States Airlines and Compass Airlines – both units of Trans States Holdings – announced they would cease operations. As bad as it may appear for the regional airlines themselves, there is a deeper story to uncover, and historic precedent to suggest not only could the regional airlines survive, but emerge in a stronger position than they did going into this crisis.Continue Reading...
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