"The Big Airline Profit Margins? Look at Regionals"

Sunday, September 26, 2004

The Big Airline Profit Margins? Look at Regionals
By HUBERT B. HERRING
The New York (NY) Times

 
If you want to travel a popular 2,000-mile route - especially if it's served
by one of those low-cost airlines that are such thorns in the wings of
old-line carriers - the competition is so fierce that the airlines will
practically pay you to hop aboard. 

But if you want to make the 200-mile hop from East Podunk to West Podunk,
assuming that there is still such a flight, the sky-high fare would lead a
traveler to expect a personal jet with crystal Champagne flutes.

So it's little wonder that while the likes of a chipper Southwest slug it
out with the likes of a bloodied US Airways, small regional carriers -
including American Eagle, SkyWest, Express Jet and Air Wisconsin - are
topping the profit charts. 

In the second quarter, the regionals posted a 9 percent domestic profit
margin, the Bureau of Transportation Statistics reported, compared with 7.2
percent for the low-cost airlines. The old guard, meanwhile, had a loss of
2.8 percent. 

There's nothing like being the only game in town.


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