MAINTAINING A HEALTHY BALANCE

are rock bottom. This is already happening. Each of Air Costa’s four E-Jets, for example, was flying a whopping 12.6 hours per day on average in late May. And those E190s were working hard – some aircraft completed ten daily flights with just 20 to 30 minutes on the ground between each arrival and departure. That utilisation corresponds to about 3,600 annual block hours per E190, about the same as an A320 in a LCC fleet, yet each E190 flight is about one-third shorter and has one-third fewer revenue-generating seats.

The productivity of Air Costa’s fleet is impressive. Even with The key to sustaining regional jet service in Tier-II and TierIII markets is having ideally-timed flights that attract a healthy mix of premium-fare business and discount-fare leisure travellers and with just the right frequency to profitably balance the number of seats with the number of passengers. Since regional jet utilisation seems to be at its limit (at least in the case of Air Costa), it may be difficult to further reduce unit costs unless there are untapped economies of scale that could be derived from operating larger fleets, or there are further concessions granted to carriers with regional aircraft.

It puts renewed focus on domestic fare levels and the influence LCCs have on an emerging, fragile regional industry. As sure as night follows day, what goes down will eventually come back up: the honeymoon with cheap jet fuel will end. When that happens, carriers with big airplanes might well be forced to rethink at what price they should sell their surplus seats and whether it makes economic sense to be flying those aircraft on low-demand routes that are better suited to smaller regional jets.