Comparative Analysis of Regional Airline Industry in Europe and North America and Some Insights into Current Developments

Document Type

Journal Article

Publication Date


Subject Area

organisation - competition, organisation - structures, place - europe, place - north america, mode - bus


Turboprop aircraft, Regional jets, Regional airlines, North America, Franchises, Europe, Cost structures, Competition, Comparative analysis, Case studies, Business practices, Bankruptcy


The regional airline industry in Europe and North America is compared, and through a combination of data analysis and case studies, some of the current changes taking place are investigated. North American regionals are shown to have longer stage lengths, lower unit costs, and higher load factors than their European counterparts. Turboprops remain popular in Europe, but 50-seat jets still dominate in the United States, despite being considered inefficient because of high unit costs and pressure on yields. The bankruptcy of most U.S. legacy carriers has led to renegotiation of contracts for regional flying, with prices being driven down. European regionals face different problems with rail competition, capacity constraints at hub airports, and incursion by low-cost airlines. The differences in the cost structures of BA Connect, British Airways’ former regional arm, and Flybe, operating a new hybrid format, are interpreted, and it is shown that Flybe has much lower labor costs. Alternative business models are then discussed. In the United States, the most popular is the sale of capacity to the majors, whereas in Europe many operate on a quasi-independent franchise basis. It is concluded that European regionals require more action to reduce costs, whereas U.S. regionals will increasingly have to take more of the risk from their major carrier partners. A renewed enthusiasm for turboprops on short sectors is becoming apparent, and the European markets in particular are likely to see a shift to larger aircraft at lower frequency. This puts at risk the schedule convenience and network connections valued by business passengers.