GUY NORRIS / PALM SPRINGS
Regional feeder airlines also at risk as experts warn capacity will have to fall 10% more
Major airlines, particularly in the USA, may have to cut capacity by up to another 10% in the next few months, say analysts who warn of uncertain knock-on effects to the regional airline industry and the potential collapse of "one or more" of the big nine US major carriers.
Speaking at the Palm Springs, California, Speednews regional conference, Walsh Aviation president John Walsh said the difference between traffic (revenue passenger km) and capacity is too high. The sums would suggest that the airlines need to reduce capacity further, by another 5% to 10%."
There are concerns that several of the US majors with limited financial liquidity, such as Continental Airlines with its large leased fleet, may find survival difficult. "There are questions over the liquidity of the majors, will one go bankrupt?" says Credit Suisse First Boston aerospace and defence group managing director Pierre Chao. He adds that the outcome will directly affect related hub feeders. Atlantic Coast and Skywest, tied to United and Delta are "safest". However, Mesa Air, through its America West and US Airways affiliations is "more at risk", he says.
Growth rates over the fourth quarter and possibly well into 2002 for the US regionals, traditionally in double digits is forecast to be between zero and "minus 5%", says Walsh and AvStat Associates president Douglas Abbey.
The direct effects include acceleration of turboprop retirements, and a raft of route changes with some majors, including Delta and United, substituting mainline aircraft with regional jets to maintain a presence on routes that they would otherwise have been forced to abandon. Since the attacks, Abbey says 28 new regional US routes have been added, more than 48 routes have been replacements for the majors, four supplements to the majors and six carrier substitutions. Some 65, however, have been dropped while 18 have transitioned from turboprop to turbofan aircrafts.
US Airways pilots have offered to raise the scope clause ceiling on regional jets operated on the airline's network from 70 to 189 in return for job security. The carrier has grounded 111 of its older Fokker 100s, Boeing 737-200s and MD-80s since 11 September and has transferred services to smaller US Airways Express regional jets and turboprops.Source: Flight International
