Regional airlines are undoubtedly an important component of the aviation system. They fulfil an essential part of air connectivity, often operating routes with limited demand or connecting small communities by deploying turboprops, regional jets or, in some cases, narrow body aircraft.
COVID-19 poses a significant risk to regional airlines in the immediate term. Several airlines have filed for insolvency or ceased operations, particularly in Europe and the Americas. The situation is particularly dire for those following a “capacity provider” business model, as several large airlines have shrunk their networks and cancelled their contracts.
However, the regional airline fleet and business model is highly relevant as the industry recovers. As capacity slowly returns to the skies, airlines have skewed towards deploying smaller aircraft – a prudent approach given the uncertain and depressed demand profile of most markets. Ensuring an airline and its fleet is “right-sized” is now more important than ever.
Regional airlines, therefore, have a vital role to play in the future. With their fleet of optimally-sized aircraft, regional airlines are well placed to offer the right capacity in the right markets, serving the rebound of travel demand while lowering the risk of overcapacity. In addition, they continue to be the best means to serve remote and island communities.
Their survival requires a willingness among stakeholders to explore three key avenues:
• State support
• Partnership or collaboration models
To learn more and discuss how your organization could benefit from Lufthansa Consulting’s expertise on Crisis Recovery, please get in touch at ALcrisis-solutions@LHConsulting.com.
Further insights from Lufthansa Consulting’s aviation experts are available at: https://www.lhconsulting.com/insights/news/