Cutbacks by regional airlines hurt smaller U.S. cities

ATLANTA, Fri Sep 14, 2012 – Banana seller Chiquita Brands this month will shutter its headquarters in Cincinnati, Ohio, in large part because of cutbacks in air service to the area.

Delta Air Lines has significantly shrank its presence at Cincinnati/Northern Kentucky International Airport to seek profits elsewhere. It now offers only roughly 120 daily flights – most with regional partners – at that hub, down from more than 600 flights six years ago.

Small and midsized cities across America are facing dramatic reductions in air service as tough economic times and rising fuel costs have spurred carriers like Delta to pare flying to money-losing markets and focus on big cities.

In smaller markets, much of the flying is done by regional carriers under contracts with the larger airlines, which are forcing the regionals to cut costs, restructure or close.

Delta is closing its Comair unit later in September; Pinnacle Airlines and American Eagle, a unit of American Airlines parent AMR Corp., are operating under Chapter 11 bankruptcy protection. Only 61 regional airlines remain today, down from 247 three decades ago.

“The world is getting smaller and this industry is becoming like musical chairs,” said George Hamlin, an aviation consultant in Fairfax, Va. “Not everyone is going to have a seat when the music stops.”

Regional airlines provide a critical link to air travel across the United States. About three-quarters of U.S. communities that have air service, or nearly 500 cities, are served mainly by a regional airline.

These carriers tend to operate smaller jets that seat 50 people, but rising fuel costs have made them money losers.

Regional jets with 50 seats include Bombardier CRJs and Embraer ERJ-145s.