The aviation industry has faced ongoing pressures over the last 3 years, and regional jets* have fared particularly poorly. In 2022, while total airline frequencies were down 19.5%, regional jets saw a 33.5% decline (source: OAG Schedules Analyser). Indeed, in 2019 regional jets represented 14.0% of all aircraft frequencies and this dropped to just 11.6% in 2022. Narrow-bodied jets took most of this share, growing by two percentage points over the same period.
*Regional jet: a jet-powered regional airliner typically operating with fewer than 100 seats.
Airlines have certainly started to question the viability of their regional route networks and are increasingly reassessing their environmental impact, making the next few years for regional jet operators and manufacturers uncertain. Nevertheless, there are signs of recovery in several markets and different factors influencing these respective markets.
North America is by far the biggest user of regional jets, with 57% of all regional jet frequencies operated in North America in 2022. The next biggest user is Western Europe, representing 14.7% of all frequencies. However, Africa and Southwest Pacific have not seen the same decline in the use of regional jets as elsewhere, perhaps indicating the importance of this size of aircraft to the geography and volume of these markets. Indeed, Central and West Africa has seen an increase of over 5%.
In North America, regional airlines and their regional jets have played a critical role in the US air transport system. While few of the regional airlines fly as their own brand, most capacity feeds larger carriers like American, Delta or United. However, as buses replace shorter trips and LCCs (Low-Cost Carriers) take more small-city services with lower fares and nonstop services, the value of the regional feeds is shrinking and there are fewer frequencies operated by regional jets. LCCs typically operate larger aircraft with between 120-220 seats.
The three majors plus Alaska Airlines, Air Canada and Jet Blue are the biggest operators of regional jets in North America. With the exception of Jet Blue, which operates its own Embraer 190s with 100 seats, the other US airlines typically operate regional jets with an average aircraft size of 76 seats or fewer. This meets the scope clause which places restrictions on how many and what size of aircraft a regional airline may operate, which in turn makes the smaller regional jet popular. The objective of the scope clause is to protect pilots’ jobs at the major airlines from being outsourced by limiting the regional airlines’ passenger capacity.
Regional airlines and jets have traditionally been the training ground for pilots. However, due to the current pilot shortages in the region, the rises in pay coupled with other inflationary pressures, is impacting regional airlines’ cost structure in a more substantial way than the larger airlines, especially with a smaller available seat miles base. The long-term role for the regionals facing these pressures will require close cooperation between the regional operators and the airlines that buy their services.
Different dynamics are at play in Europe, where European airlines prefer to keep regional aircraft operations in-house. The Netherlands and Germany are the biggest regional jet markets in terms of frequency. Although neither have recovered to 2019 levels, they have experienced considerable growth in the last year. Portugal has seen demand on regional flights grow, with international capacity increasing by 27% in 2022 versus 2019. TAP Air Portugal is servicing this demand with Embraer’s E190 and E195 replacing ATR 72 turboprops, as the airline is unable to add more aircraft due to its post Covid-19 government restructuring plan.
The biggest declines by frequency have been in Italy and France, largely driven by domestic capacity which has reduced by 92% and 67% respectively in 2022 versus 2019. The reasons driving these changes are very different. The decline in regional jet capacity in Italy is largely driven by the minimal use by ITA of regional jets (since it took over Alitalia’s operations).
In France, domestic flights were banned in April 2022 for environmental reasons (on routes that could be travelled via train in under two and half hours). In the last 20 years, high-speed rail has seen notable successes against short-haul flights, with Eurostar’s cross-channel routes halving air travel demand. French rail operator SNCF has teamed up with its Swiss and Italian counterparts to take on the airline's short-haul flights out of Switzerland. As part of the conditions attached to a €600 million ($680m) government bailout Austrian Airlines has agreed to remove domestic flights - that can be taken by rail in less than three hours - to help reduce carbon emissions. They partner with ÖBB (Austrian Federal Railways) on Linz, Graz and Salzburg routes to Vienna airport.
In contrast, reflecting the unique geographical aspects of their home markets, Loganair and SAS have increased domestic capacity on regional jets since 2019 growing by 72% and 47% respectively.
Bucking the global trend, use of regional jets grew by 5% in 2022 versus 2019 in Central and West Africa. Three of the top 5 airlines using regional jets are Nigerian: Air Peace, Ibom Air and United Nigeria Airlines. This growth in capacity has largely been on domestic routes. Air Peace uses Embraer 145 and E2s, whilst Ibom Air uses Bombardier CR 900s. Both airlines have new regional jets on order; E2s and A220 respectively, but with shortages of aviation fuel and limited runway availability across the domestic network, their future is uncertain.
Regional jets clearly have their role to play, often operating public service obligation routes that link islands with mainland Europe, feeding major airlines through regional networks and as the training ground for flight crew. Nevertheless, there is growing pressure to operate in a more environment-, social- and governance- conscious way, and the economic benefits from fleet simplification have been demonstrated by LCCs.
Whilst there is some interest in Airbus developing an A220-500 to allow fleet commonality through both regional and narrowbody aircraft operations, other carriers are exploring the next generation hybrid turbo props. Swedish carrier Braathens Regional Airlines conducted the first flight of a commercial aircraft powered by 100% sustainable aviation fuel in June 2022, using an ATR 72. The next few years will be challenging for regional jets and their operators will need to look afresh at their business case within the context of the broader aviation industry.