Despite relatively flat growth years in 2006 and 2007, regional capacity will grow annually at a five percent clip between 2008 and 2020, according to the Federal Aviation Administration, in its Aerospace Forecast Fiscal Years 2007-2020.
System RPMs are projected to increase 4.5 percent a year, with regional carriers reaching a growth rate of 5.1 percent a year, faster than mainline carriers at 4.4 percent annually. The agency also predicted commercial carrier capacity growth will accelerate in 2008 to 3.6 percent as mainline carriers grow 3.3 percent while regional carriers grow 5.4 percent. For the balance of the forecast, domestic capacity is projected to increase at an average annual rate of 4.0 percent, with mainline carrier growth lower at 3.8 percent than the regional carriers at five percent.
The FAA called regional growth exceptional in the face of major carrier restructuring and downsizing and the rapid growth of low-cost carriers. Unsurprisingly, it said the number of 50 seaters will continue to fall in favor of 70- to 90-seat jets, increasing the average regional aircraft in 2007 by 0.8 seats to 50.8 seats per mile. This should be a relief for the FAA which recently imposed congestion rules calling for the replacement of 50-seaters with larger aircraft to squeeze more capacity out of the system. Related Story The greater number of the larger 70- and 90-seat regional jets in the fleet increases the average seating capacity of the regional fleet – from 50.0 seats in 2006 to 50.8 seats in 2007 and 59.0 seats in 2020. The changing aircraft fleet mix is narrowing the gap between the size and aircraft types operated by the mainline and regional carriers.
In 2007, domestic load factor is expected to increase 0.5 points to 79.2 percent with increases for both mainline and regional carriers. After 2007, load factor is projected to increase at an average of 0.1 points a year, reaching 80.3 percent in 2020. Passenger trip length is also forecast to increase after 2007. In 2006, domestic passenger trip length increased by a substantial margin of 9.6 miles to 871.4 miles with gains recorded by both mainline and regional carriers. A decline in mainline carrier trip length, owing to a fall in trip length in the growing low-cost carrier sector, leads to a passenger trip length decrease of 6.7 miles in 2007. However, for the balance of the forecast period, trip length is projected to increase an average of 6.5 miles a year, reflecting gains in both mainline carrier and regional carrier trip length. Mainline carrier trip lengths are increasing primarily because shorter length routes are continuing to be transferred to regional partner carriers and because of increased point-to-point service. Regional carrier trip lengths increase because the introduction and use of the larger 70 and 90 seat regional jets allow these carriers to service longer haul markets.The total number of aircraft in the U.S. commercial fleet (including regional carriers) is estimated at 7,626 for 2006, a decrease of 58 aircraft from 2005. This includes 3,886 mainline air carrier passenger aircraft (over 90 seats), 997 mainline air carrier cargo aircraft, and 2,743 regional carrier aircraft (jets, turboprops, and pistons).The mainline carriers’ passenger jet fleet fell by 39 aircraft in 2006 as cuts at network and other non low-cost carriers offset increases in low-cost carrier fleets. The mainline carrier fleet now contains 576 fewer aircraft than in 2000. On the other hand, the regional carrier passenger fleet has increased by 469 aircraft since 2000. During this 6-year period, 1,117 regional jets have come into to the regional carriers’ fleet while the number of turboprops and pistons has declined by 648 aircraft.

The number of passenger jets in the mainline carrier fleet fell by 39 aircraft in 2006 but is expected to increase by 92 aircraft in 2007 and 108 aircraft in 2008. Over the remaining 12 years of the forecast period, the mainline air carrier passenger fleet increases by an average of 163 aircraft a year, reaching a total of 6,041 aircraft in 2020. The narrow-body fleet, including E-190’s at JetBlue (JBLU) and US Airways (LCC), is projected to grow by 123 aircraft annually over the 14-year forecast period; the wide-body fleet grows by 31 aircraft a year as the Boeing 787 and Airbus A350’s enter into the fleet.
The regional carrier passenger fleet is forecast to increase by only 49 aircraft over the next two years. After that, the regional carrier fleet is expected to increase by an average of 75 aircraft (2.4 percent) over the remaining 12 years of the forecast period, reaching 3,694 aircraft in 2020. The number of regional jets (90 seats or fewer) at regional carriers is projected to grow from 1,687 in 2006 to 2,689 in 2020, an average annual increase of 3.4 percent. All of the growth in regional jets over the forecast period occurs in the larger 70 and 90 seat aircraft (1,012 compared to a reduction of 10 aircraft with 50 or less seats), reflecting the relaxation of scope clauses. The turboprop/piston fleet is expected to decline from 1,056 in 2006 to 1,005 in 2020. Turboprop/piston aircraft are expected to account for just over 27 percent of the regional fleet in 2020, down from a 38.5 percent share in 2006.

Analyzing the Past
Since 2000, total domestic capacity has increased by only 1.9 percent. Network carriers have reduced their domestic capacity by 20.6 percent while low-cost carriers have increased capacity by 57.0 percent and regional carriers have increased capacity a whopping 141.3 percent. Largely owing to the cuts in capacity, network carrier RPMs and enplanements fell 10.4 and 22.3 percent, respectively. During this same time period regional carrier RPMs and enplanements have increased 200.2 and 91.0 percent, respectively. As a result, network carriers’ share of domestic capacity has fallen from 76.7 percent in 2000 to 59.8 percent in 2006 while their share of RPMs has fallen from 77.7 to 61.3 percent. The combined domestic enplanements of the low-cost carriers and regionals have increased 65.7 percent since 2000, to 319.0 million in 2006. In 2006, their combined passenger count represented 47.7 percent of domestic commercial enplanements, up from 30.0 percent in 2000.
In a recap of 2006, FAA said the number of passengers reached a record 741 million, predicting commercial aviation will carry one billion passengers by 2015. In 2006, regional carriers reported operating profits of $866.3 million, but a net loss of $114.4 million. Regional carrier domestic passenger yield increased 1.2 percent in 2006 of the higher yields of their major partners. However, illustrating the continuing pressure for regionals to drive costs down in order to compete, domestic passenger yield is down 35.1 percent since 2000. Much of the increase in 2006 reflects the increase in prorated share of the
higher yields of their larger partners. More coverage after chart.

 
Regional and low-cost carriers grew while their network carrier counterparts shrank. In 2006 the domestic enplanement market share for the regional and low-cost carriers increased 2.7 points to 47.7 percent, up from a 30 percent share in 2000. Mainline carrier capacity was down an estimated 2.5 percent while regional carrier capacity was up 1.5 percent. At the end of 2006, domestic ASMs were just 1.9 percent above pre-9/11 levels while departures were 5.9 percent below. With the reductions in capacity, domestic passenger enplanements fell slightly (down 0.2 percent) in 2006 compared to 2005. Mainline carrier enplanements were down 1.3 percent while regional carrier enplanements were up 3.9 percent.
Despite the slight decline in passengers, domestic passenger traffic grew in 2006 with domestic RPMs up 1.0 percent. Mainline carrier RPMs were up just 0.1 percent while regional carrier RPMs were up 7.6 percent. Domestic carrier load factor achieved an all-time high of 78.7 percent in 2006, an increase of 2.3 points over 2005 as both mainline (79.3 percent, up 2.1 points) and regional (74.1 percent, up 4.2 points) carriers achieved all-time highs.