As high fuel and labor costs conspire to devour airlines’ profits and render their margins comparable to those of a public charity, it’s hard to believe that the fortunes of one subset of the sector have fallen even further — and faster — than those of their peers: regional airlines.

The fortunes of regional airlines improved dramatically in the 1980s after the industry was deregulated because price wars made it unprofitable for legacy carriers with traditional “hub-and-spoke” networks to fly short-haul secondary routes. But tough new regulations and reduced capacity by major carriers are stressing the regional airlines’ business model to the breaking point.

Pinnacle Airlines (PINK:PNCLQ) filed for bankruptcy on April 1. Pinnacle, whose wholly owned subsidiaries Pinnacle Airlines, Colgan Air and Mesaba Airlines fly as Delta’s (NYSE:DAL) Delta Connection, United Continental’s (NYSE:UAL) United Express, and US Airways‘ (NYSE:LCC) US Airways Express, will make drastic changes in its fight to survive.

While it’s getting a $74.3 million lifeline from Delta, PNCLQ still plans to phase out Colgan Air, stop flying for UAL and LCC and cut 800 jobs.

Pinnacle is by no means alone. The other two publicly held U.S. regional-airline pure plays — Republic Airways (NASDAQ:RJET) and SkyWest (NASDAQ:SKYW) — lost a combined $150 million in 2011 and continue to feel the ill effects of a rapidly shifting airline-industry paradigm.

Private regional carriers such as Mesa Air Group, Air Wisconsin and CapeAir — as well as American Airlines parent AMR’s (PINK:AAMRQ) American Eagle subsidiary — are feeling the pain, too. Even top-performing Alaska Air Group (NYSE:ALK) is facing headwinds at its Horizon Air regional subsidiary.

Here are four reasons regional airlines are worse off than the majors:

Major Airline Cost and Capacity Cuts

When high fuel prices, the recession and other factors gave legacy airlines’ earnings a chill, their regional partners caught pneumonia. In Pinnacle’s bankruptcy filing, COO John Spanjers spelled out some of the pressures facing regional carriers. “Regional airlines have been forced to bid ever-lower rates and accept increasingly unfavorable contract terms to win the business of major carriers,” he wrote. “These sacrifices have drained regional carriers and continue to do so, with frequently unsustainable consequences.”

Tough New Safety Regulations

The 2009 crash of Continental Express 3407, a code-share flight operated by Pinnacle’s Colgan Air unit, triggered a terrain shift for all U.S. regional airlines. The National Transportation Safety Board found that both pilots might have been sleep-deprived, distracted and inadequately prepared for the emergency that led to the crash that killed 50 people near Buffalo, N.Y. New pilot-fatigue rules require airlines to give their pilots at least 10 hours of off-duty time between flights. That would require regional airlines to hire more pilots — something they can ill afford to do.

Code-Share Disclosures

Not long ago, regional airlines had a wildly profitable business model: They inked agreements with major airlines to fly their short-haul, secondary-market routes. Majors marketed those flights under their own brands — United Express, Delta Connection and US Airways Express. That was a win-win because major airlines could sell tickets on those flights and regional carriers could operate them, usually with smaller aircraft. But new rules require major airlines to disclose which airline will operate the flight before the ticket is purchased. With that knowledge, customers often choose not to fly regional code-share flights.

Costlier Pilot Requirements

The Flight 3407 crash also is prompting the FAA to boost experience requirements for airline captains and first officers to 1,500 hours instead of the 250-hour minimum required for a commercial pilot certificate. That means prospective pilots, who usually pay for training themselves, face an extra $125,000 outlay. Separate regulations will boost pilot-training requirements for the airlines as well. The added expense will make it more difficult for regional carriers to hire pilots.

The bottom line: The regional-airline business model is looking increasingly grim. The industry was beginning to face a pilot shortage anyway, which will become even more acute as new regulations take effect. I consider Pinnacle, Republic and SkyWest a sell right now.

As of this writing, Susan J. Aluise did not hold a position in any of the stocks named here.