Chris Jasper/LONDON

The rapid expansion of the regional market in North America and Europe continued unabated last year, fuelled by US majors focusing on the consolidation of regional franchise relationships, and franchise expansion by their European counterparts.

The US Regional Airlines Association (RAA) reports that passenger traffic increased by 7% across the sector compared with 1997, to 71 million passengers.

In Europe the picture was equally bright, with the European Regions Airline Association (ERA) reporting passenger growth consistently in double figures, ranging from 10% in July and October to a peak of 16% in March. The ERA's 73 members carried 62.6 million passengers during the year.

The regional industry continues to show two very different faces in its North American and European heartlands, however. While the RAA says US regionals operated aircraft with an average seating capacity of 27.7 in 1998, the ERA quotes a figure of 62 seats.

This difference in average aircraft capacity is a reflection of key differences in the two markets. US regionals serve a wider area with a lower population density than do their European equivalents. In addition, their networks typically include settlements much smaller than those served across the Atlantic.

European regionals, in contrast, provide good links in economically developed areas of western and northern Europe, but are less evident elsewhere.

In Europe and North America, the biggest regionals are linked directly to - though not necessarily owned by - major airline groups, with the top three in the USA being regional brandings of American Airlines, Delta Air Lines and Continental Airlines, to which can be added US Airways Express, not yet consolidated in RAA figures. In Europe, the top three links are to Swissair, KLM and Lufthansa.

The most dramatic fluctuations in regional passenger traffic in the USA last year came as a result of major airlines swapping feeder partners, with SkyWest showing growth of more than 50% after taking over United Airlines business that was previously the province of the Mesa Air Group's WestAir and Mesa Airlines subsidiaries. SkyWest also provides Delta Connection services.

The trend in the USA is towards the consolidation of regional groupings, with American tightening control of the Eagle brand and Delta buying ASA. The RAA lists 49 codeshares between regionals and majors or nationals - 13 involving ownership and three partial ownership.

Of the RAA top 50, the first 26 airlines all have codeshares. The next carrier is the unattached Cape Air/Nantucket Airlines.

Despite the sustained expansion of recent years, European and US regionals fear that further growth could be frustrated - the former citing airport and ATC overcrowding (and higher fees), and the latter blaming the constraints imposed by pilot scope clauses.

Source: Flight International