I am now begining to wonder if the RJs may end up being the demise of the current airline industry.

The industry realized in the early 90's they had to downsize their planes to the smaller markets and hence, started flying the Saab 340 and Embaer 135. However, they had to switch to the RJ after a lot of disatisfaction with the little props and they figured the RJ would provide a more comfortable ride.

Now it appears that the bigger (2X2 sear) RJs are too big for these markets (as I figure more people are probably switching to Southwest) and they have to reduce their capacity which unfortunately means the 145 (1X2 seats). All I can see with this is even more people are going to opt out of some mile program if it means having to ride in a narow tube.

I think the industry has realized this pitfall as larger RJs are being introduced (such as the ERJ170). The big question is whether the industry can invest in these larger jets if all it will do is increase capacity.