Airlines measure cost efficiency using a metric called CASM, or cost per available seat mile. This unit cost measurement shows the cost for one seat to fly one mile. When a regional airline flies a 50-seat plane 250 miles, they generate 50 x 250, or 12,500 available seat miles (ASMs). Compare this to a low-cost airline flying a 180-seat plane on the same length route. They would generate 180 x 250, or 45,000 ASMs. Both airlines use two pilots, and while the bigger plane burns more fuel, it does not burn 3.6 times more fuel, the difference in seats. Every time any cost for the regional increases, they spread this over a smaller ASM base and it affects their overall cost structure in a more substantial way than the bigger airlines. That’s why the regionals are always passionate about keeping their costs low, but in today’s inflationary economy this is challenging them.
Low-Cost Airlines And Busses Are Both Growing Quickly
The U.S. low-cost industry, led by airlines like Spirit, JetBlue, Allegiant, and Frontier, are growing at a much faster rate that than the higher-cost “big four” airlines. As these airlines grow, a larger percentage of the population gets access to low fares and more nonstop service. This growth makes the product that the regional airlines offer less desirable, due to its higher cost for consumers and almost mandatory connecting nature of its services. As the LCCs grow, the regionals will shrink.
On shorter trips, say 150 miles or less, buses are starting to become a more economic and desirable way to feed a big airline hub.
One company, Landline, is already working with several airlines to provide this service. Customers can check-in at their small city, check their bags, and ride on the bus in a comfortable, wi fi equipped cabin. When they arrive at the airline hub, their bags are connected and in some cases they will enter the airport through a gate into a secure concourse. These buses could be changed to a new, electric bus to make this service more sustainable years, if not decades, before electric airplanes could do this.
As buses replace shorter trips and LCCs take more small-city service with lower fares and nonstop service, the value of the regional feed shrinks.