Regionals eye new business models amid travel downturn

12/7/2009 | Bloomberg Businessweek

Pinched by a severe downturn in flying, regional airlines are toying with new strategies for survival. For years, the regionals prospered through partnerships with legacy airlines, flying smaller planes to smaller airports that could not be profitably served by big jets. But as the recession forced legacy carriers to scale back service to secondary markets, the regionals found their business model increasingly tenuous, BusinessWeek reports. Republic Airways responded most dramatically, buying up branded carriers to compete directly with major airlines. It's an experiment that other regional carriers are watching closely. "It entails risk, but I think they took a look at the future and decided it made sense," says Jonathan Ornstein, CEO of Mesa Air Group.

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