In 2017, the number of passengers who flew domestic U.S. flights broke all previous records for the third straight year, and 2018 appears poised to smash the record yet again.

But even as airlines filled planes with 741 million domestic passengers in 2017, according to the Bureau of Transportation Statistics (BTS), they offered 18.5% fewer flights than at the peak in 2005, a result of the carriers' shift toward larger aircraft in order to reduce costs and toward denser seat configurations to increase revenue.

Between 2007 and 2017, while the number of domestic U.S. air travelers increased by 9.2%, the average number of passengers per flight jumped from 69 to 91, BTS statistics show.

Upgauging -- industry parlance for using larger aircraft -- has been an economic winner for mainline airlines, and it has helped some regional carriers survive a pilot shortage that forced them to drastically increase pilot pay.

Seth Kaplan, managing partner for the newsletter Airline Weekly, said, "The economics on the cost side always favor a larger aircraft." Overall, he noted that there is less pilot cost per passenger. Also, "Upgauging also saves on engine maintenance and airport fees. There are just powerful incentives to try and get more seats per flights."

Larger aircraft also offer benefits to travelers. For example, few flyers would miss having to duck their heads as they walked the aisles of small regional aircraft.

But trading more flights on smaller planes for fewer flights on larger ones can also come at a cost to travelers, most notably in the  form of decreased connectivity in smaller markets and a general reduction in route frequencies.

Faye Malarkey Black, president of the Regional Airline Association (RAA), said, "An airport can gain seats in a way that actually reduces meaningful connectivity. In smaller markets, in particular, it's critical to right-size the aircraft to the passenger base. Frequency and departure options are maintained through use of right-size aircraft."

Upgauging and seat densification have been a common theme across the industry. JetBlue, for example, used to fly only 100-seat Embraer E-190s and 150-seat Airbus A320s. But the carrier took its first delivery of the larger Airbus A321 in 2013, according to the website Planespotters.net, and now has 58 A321s in its fleet, with configurations ranging from 159 to 200 seats.

In the meantime, JetBlue is also in the process of adding two rows to its A320s, boosting the seat count from 150 to 162. And in the years ahead, the carrier plans to replace its E-190s with Airbus A220-300s, which are built to carry between 130 and 160 passengers.

Similarly, at the end of 2007, the Southwest fleet primarily consisted of 137-seat Boeing 737 variants, along with 25 122-seat Boeing 737-500. By the end of last year, Southwest had phased out the 737-500s, added 175-seat 737-800s to its mix, and densified those 137-seat 737-700s to 143 seats.

The Big 3 legacy U.S. carriers Delta, United and American have also upgauged their mainline fleets. But perhaps the most dramatic changes have come in the regional fleets owned both by the Big 3 and by the regional airlines themselves.

According to the RAA, the total number of 36- to 50-seat aircraft in U.S. regional airline fleets declined by half between 2008 and 2017, dropping the portion of the regional fleet those planes comprise from 75% to just more than 40%. Meanwhile, during that same time frame, regional carriers more than doubled their inventory of two-class jets, which seat between 65 and 90 passengers.

According to the trade organization Airlines for America, in 2005, 45% of U.S. domestic flights were operated on aircraft with 50 seats or less. This year that figure is down to 22%.

Symbolic of the upgauging of regional jets was the retirement by American Airlines' regional subsidiary Piedmont in July of its last Bombardier Dash 8 turboprop plane. With that retirement, turboprops are no longer in the fleet of any of the Big 3, according to Brett Snyder, who writes the Cranky Flier blog.

The gradual draw-down of smaller regional aircraft is benefitting consumers, said Mark Drusch, a former Delta senior vice president who is now a vice president in the aviation wing of the consultancy ICF.

Jets in the 70-to-90-seat range, he said, have wider seats and larger lavatories than smaller regional aircraft. They also have full overhead bins and high enough interiors for passengers to stand straight.

"From a comfort perspective, you just have more space," Drusch said.

Larger regional jets also enable airlines to offer a broader product range, including first-class cabins and more basic economy seats, he added.

For regional carriers, which were forced by the nationwide pilot shortage to institute a spate of substantial pay raises and sign-on bonuses beginning in 2015, upgauging has served as something of a lifeline by reducing the aggregate number of pilots needed, said Airline Weekly's Kap-lan.

But as the total number of flights has dropped across the U.S. domestic system, reductions in connectivity have followed.

According to an Airline Weekly analysis of data from the analytics company Diio Mi, the number of domestic city pairs serviced daily by U.S. carriers dropped 11.4% between 2007 and 2017.

Typically, said the RAA's Black, it's the small markets that feel the most impact when airlines reduce departures.

A total of 256 U.S. commercial airports saw a reduction in departures of 10% or more between 2013 and 2017, the RAA said, and 20 airports lost service altogether.

"Increases in seats are practically meaningless if destination options and departures are not also increasing, or at least holding," Black wrote in an email. "Otherwise, a flight with more seats but taking off less often or to fewer destinations is less convenient and less likely to meet individualized traveler needs."

Even with upgauging and the pilot shortage, the news for small U.S. airports has improved somewhat in recent years. Since 2013, the pace of the reductions in total domestic flights has slowed measurably, having dropped less than 2% during that period. Meanwhile, driven by the potential to reap larger profits on routes with less competition, the Big 3 carriers, especially United, have begun placing more focus on regional flying.

Upgauging isn't the only cause of the reduction in domestic flight counts over the past 13 years. Drusch noted that industry consolidation, which brought the number of primary U.S. carriers down from 11 in 2006 to four today, led to the closure of midsize hubs in markets such as Cleveland, Memphis, Pittsburgh and Cincinnati.

Kaplan said consolidation has also enabled carriers to reduce frequencies on some routes.

"When you don't have as many competitors, it's easy for an airline to get away with having fewer frequencies," he said. 

Correction: Seth Kaplan, managing partner for the newsletter Airline Weekly, said the economics of larger aircraft led to less pilot cost per passenger. He was misquoted in an earlier version of this article as saying it led to less cost per pilot.

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