Calyon Securities Analyst Ray Niedl expects government restrictions proposed by the FAA to reduce delays will benefit airlines since they would inevitably raise prices and reduce inefficient utilization of airline assets. Related Story
However, it would hit regionals the hardest. “Limitations on flights and/or higher landing fees could have a negative effect on the regional airlines,” he said. “Smaller aircraft would have to pay higher fees, producing economics that could reduce the viability of some of their operations. Restrictions on the number of flights would probably reduce the number of regional jets, since carriers would probably favor larger aircraft in a restrictive environment. Either action would further reduce growth opportunities for regional airlines.” Indeed, a recent DOT report found regional margins were eroding. Related Story