While it is no surprise that low-cost carriers (LCCs) have eroded service at small communities, Velocity Group reports the number of U.S. airports served exclusively by regional airlines dropped for the first time in nearly two decades. The number of airports served solely by regional airlines dropped markedly from 2006 to 2007, from 65 percent of the total to 59 percent, largely owing to Allegiant Airlines' expansion into small communities, expanding the variety of air service options and adding competition with new nonstop flights.
Growth of the Allegiant network to include Abilene, Tex., Kinston, N.C., Idaho Falls, Ida., Knoxville, Tenn., Santa Maria, Calif., Bellingham, Wash. and others like them proves that small communities support enough traffic demand to justify nonstop larger jet flights in major O&D markets, rather than just spoke-to-hub-type service patterns by smaller aircraft,” according to Velocity Group Partner Doug Abbey, who estimated that Allegiant serves nearly 30 “regional-exclusive” destinations today and predicted even greater competition for small community passengers as other new entrant carriers gain traction. Abbey included likely new service by Skybus, which is expected to launch later this year, as well as AirTran Airways, Frontier Airlines, and JetBlue Airways. "Passenger acceptance of new airline business models is having some unintended, but positive, consequences for many cities that once relied entirely on aircraft no larger than 70-seats," he said.
While Allegiant's strategy of offering jet flights to small communities from Las Vegas and Orlando/Sanford has added some measure of competition at nearly two dozen small cities, many others still rely exclusively on regional carriers for all air service, but to a lesser extent than in the past.
“This is the first year we’ve seen a decline in the regional exclusive service trend at small airports in nearly two decades and I expect this trend to continue,” he added. Of course, major carriers are not the only segment of the U.S. airline industry to feel the already considerable impact of LCC and new entrant carrier competition. JetBlue has targeted typical ‘regional’ markets for new flights in recent months using the 100-seat Embraer 190 to link, for example, Boston with Buffalo, Richmond, Columbus, and Pittsburgh. “New JetBlue flights between New York City and Nantucket, announced recently with Cape Air are a very clear indication that even the most traditional among regional-exclusive markets may see competition from non-traditional carriers.” Related Story “Where regional markets were once immune from low-fare and low-cost-carrier competition, that paradigm continues to change,” said Abbey. “The upside is that LCCs tend to stimulate local passenger traffic activity when they enter a new city, and in doing so, encourage greater use of local airports for all carriers.”