Those who fly primarily through large airports in developed areas may underestimate the enormous scale of regional airline operations in the United States.
United Airlines, Delta Air Lines, and American Airlines all have regional subsidiaries that fly to hundreds of minor airports across the country, providing a degree of service to small and distant areas that is rarely seen outside of the country.
United Express, Delta Connection, and American Eagle each have fleets of hundreds of aircraft and dozens of daily departures from every major hub airport, ensuring that Americans across the country, including those living in rural and remote areas, have access to convenient air travel.
The US government’s Essential Air Service program contributes significantly to the growth of regional air markets.
For airlines, it is a win-win situation because they can operate flights to regional destinations with government funding, and passengers can ensure that, even if they live in a remote area with low demand for air service, they will be able to fly out of a local facility rather than having to travel hours to the nearest major airport.
According to the US government, such service is crucial because it keeps rural towns connected to huge population centers and allows all Americans, regardless of where they live, to readily travel throughout the country.
These flights may be too pricey.
There is one caveat to these regional flights, though: they are exceedingly pricey. This may seem contradictory, given that flights tend to become more expensive as they become longer, and regional services are among the shortest offered by any airline.
Furthermore, this may appear contradictory, as regional flights have the lowest demand, which usually results in lower ticket pricing.
However, this does not end up being the case. This is readily apparent when attempting to book a flight to or from one of these minor regional airports. Here’s how United’s website displays tickets to and from Ithaca Tompkins International Airport (ITH):
Passengers may expect to pay more than $270 for a straightforward, one-hour nonstop flight from United’s Newark Liberty International Airport (EWR) to Ithaca, a small regional airport in upstate New York.
When flying to Ithaca from a more distant destination and connecting through Newark, airfares rise considerably more, as seen on these flights from Chicago to Ithaca:
A one-way ticket from Chicago to this small airport costs at least $500, an extravagant sum that could easily transport one far further away from the Windy City than this small village in upstate New York.
One could practically rent a car for a week and drive to Ithaca rather than paying this much to fly there. For this sum, they could fly across the Atlantic Ocean from Chicago on a United Airlines flight.
As a result, many people are wondering what’s driving these exorbitant ticket rates and what’s causing airlines like United Express to charge so much for regional flights. In this post, we will examine deeper into regional flights and the causes that cause them to be so expensive.
United Airlines
Competitive dynamics determine airline ticket prices.
The first thing to remember is that airlines overwhelmingly base their ticket prices on market competition, which can dramatically lower fees for travelers on popular routes.
If there was only one airline flying between New York and Chicago, and a second carrier started operating the route, ticket rates would skyrocket. For this reason, some of the busiest routes connecting big population centers, where many different carriers operate, provide the lowest costs to passengers.
Smaller regional attractions, on the other hand, have far fewer competition overall. This is especially true for routes supported by federal Essential Air Service subsidies, when only one airline will get a grant for a flying route.
There are very few federally funded routes that are operated by multiple carriers, because the program’s goal is to provide air service, and bringing multiple airlines to a destination is usually not the best use of the Federal Aviation Administration’s (FAA) limited funding.
Except for a few regional destinations popular with high-end visitors, there is relatively little competition in regional markets because passenger demand will be exceedingly low.
Essentially, if a rural airport isn’t a flashy destination like Aspen/Pitkin County Airport (ASE) or Jackson Hole International Airport (JAC), you’re unlikely to have more than one flight option each route.
The structure of regional airlines in the United States generates high-fare conditions.
For individuals from other countries, the system in which United States regional airlines operate may appear overly convoluted.According to the Scope Clause, a stipulation in US law that specifies which types of aircraft large airlines and small regional carriers may operate.
Airlines such as United and American sell tickets to minor airports branded as United Express or American Eagle, although these flights are actually operated by a third-party contractor.
Airlines such as Envoy Air and Air Wisconsin will operate flights for mainstream carriers, charging a fee for their services.
As you may have noticed, this approach results in dramatically higher consumer pricing. In an ideal world, airlines would only charge passengers what it costs to run the aircraft. However, this is not the case because airlines are aggressive profit-seeking enterprises.
For regional flights, two distinct players must profit from a single flight. First, an airline, such as Envoy Air, may operate a flight for American Eagle and charge them a fee that exceeds their operating costs in order to make a profit. Then, American Airlines will raise the ticket price to ensure that they make a profit on the journey.
Regional airlines are among the most successful in the market, with consistent revenue streams thanks to their contract system.
SkyWest Airlines, a significant regional subcontractor, has become one of the aviation industry’s most profitable players, with year-on-year returns of over 120% to investors, according to Yahoo Finance.
Regional airports have higher operating costs compared to other types of facilities.
On a per-flight basis, legacy airlines can operate flights to and from larger airports at a substantially lower cost because to economies of scale. Airlines with frequent flights can negotiate landing costs and gate space prices more effectively.
Regional airlines fly between various smaller airports and communities, accounting for a substantial share of US flights. According to the Regional Airlines Association, approximately 63% of US airports are supplied only by regional airlines.
Flights to certain regional airports, such as those in remote mountainous locations or regions with extreme weather, may necessitate specific pilot certificates, which will dramatically increase individual operating costs.
Furthermore, airlines will have fewer tickets and seats on each of these smaller flights, making them far more expensive per passenger than regular services between major cities. Passengers flying to minor regional facilities might expect higher ticket prices in the short term.