WASHINGTON (CNN) - Low-cost airlines are now carrying almost half the passengers flying and regional jet service has grown 140 percent over the last two years, according to a report from the Department of Transportation Monday.

Southwest Airlines (LUV: Research, Estimates) and JetBlue Airways (JBLU: Research, Estimates) have reported a profit every quarter since the economic downturn began in the first quarter of 2001, the report said. In the third quarter of 2003, the two airlines -- which have lower costs than most of their larger rivals -- posted operating profits of $185 million and $54 million, respectively.

Continental, American (AMR: Research, Estimates), US Airways (UAIR: Research, Estimates) and Delta (DAL: Research, Estimates) all reported losses on domestic operations ranging from $54 million to $175 million. United reported a modest operating profit of $1 million.

According to the report, service by low-fare and other airlines (including regional and commuter airlines) now accounts for 46 percent of all air service. Southwest Airlines provided 37 percent of the total market growth in low-fare service over the last five years.

Regional jet service has jumped dramatically, increasing 140 percent between December 2000 and December 2003. This has occurred as airlines attempt to adjust their fleets to existing markets, the report said. Flights using large jets declined 19 percent.

The report by the department's Office of Inspector General generally extends through the last half of 2003, and looks at 40 criteria or metrics for judging the industry. Among the these are finances, demand and capacity, performance and air service at small airports. The last report was in July.

Major factors that have rocked airports and airlines in the last three years include the Sept. 11, 2001, terror attacks; the war in Iraq; the Severe Acute Respiratory Syndrome (SARS) epidemic; and a decline in business travel since early 2001, says Inspector General Kenneth Mead in the report's introduction.

The report also noted only three of the largest airports had an increase in scheduled passenger seats between December 2000 and December 2003: Fort Lauderdale-Hollywood International Airport, 16 percent; John F. Kennedy International Airport, 7 percent; and Las Vegas, 1 percent.

All other major airports experienced declines, with the worst at St. Louis International Airport, 59 percent; Pittsburgh International Airport, 34 percent; and San Francisco, 28 percent.

Federal Aviation Administration officials have growing concerns about crowded airspace in the New York area because of growth in regional jets, new low-fare service and increasing flight demands.

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In the first 11 months of 2003, the number of arrival delays at Newark (19,817) exceeded 2002 levels (14,855) by more than 33 percent.

Delays at Chicago's O'Hare International Airport rose 3 percent (44,230 vs. 43,130).

"The effects of congestion in major hubs are likely to cascade into the rest of the system, and the FAA should proactively approach solutions to preempt the return of the same debilitating conditions experienced by system users in 2000," the report said.