The airline and airport news seems to be moving in the right direction for low-cost, point-to-point carriers. The country’s largest legacy carriers are retrenching in their hubs and the largest airports, abandoning middle America to low-cost carriers.
Recently, Delta and US Airways swapped slots between New York La Guardia and Washington Regan. Continental and AirTran swapped slots that resulted in AirTran leaving Newark and Continental adding to its dominance.
Finally, just this week American Airlines announced that they are beefing up thier Chicago operation by more than 13 percent going from 430 departures to almost 500. At the same time operations at Miami, Dallas, LAX and JFK are being increased while airports such as St. Louis and Raliegh-Durham were demoted.
So, what is happening here? The major airlines are retrenching back to their main business hubs and leaving the rest of America to the point-to-point carriers. Southwest, though it has made inroads into the business travel market, will no doubt see a silver lining to American leaving St. Louis (above) and Raleigh-Durham. AirTran and JetBlue will benefit from American Airlines’ cutback at Raleigh-Durham as well.
The flying public will benefit from the departure of the legacy carriers with more and more low fares and possibly a battle between the low-cost carriers for market share. However, frequent fliers for the legacy carriers who have been loyal because of upgrades and other perks will find themselves having to chose between some of the low-cost carriers. They, initially, will not be happy.
However, I predict that once they get used to the better service and better prices from the non-legacy carriers and once the low-cost carriers flesh out their point-to-point schedules, the major airlines will have a hard time returning.
With enough service at the major hubs to keep prices down and to remain a thorn in the side of the legacy carriers, low-cost carriers can maintain good load factors and significant business traffic at the major airports. Plus, they will begin adding more passengers and new routes as major carriers retreat to their fortresses and the main business hubs.
If I were a low-cost-carrier CEO, I would be licking my chops.
{ 5 comments… read them below or add one }
However, I predict that once they get used to the better service and better prices from the non-legacy carriers and once the low-cost carriers flesh out their point-to-point schedules, the major airlines will have a hard time returning.
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Unless they BUY their competition.
also, what they’re doing is getting rid of unprofitable routes and tying up their balance sheets. That’s a good thing.
Sounds like the legacy airlines are trying to make it harder for me to be a customer. The reason is this: when I fly, I collect the miles (so I usually stay with one airline and its partners). I then use these miles to go on vacation on the cheap.
Now, if my airline does not fly to where I need to go on business (say I am loyal to American Airlines and have to fly from Chicago to St. Louis), I will end up going with another airline to get the timing I need (and possibly the price). Yes, I get to work, but I do not collect miles on an airline that can take me to where I want to go on vacation.
I guess this means forget loyalty and fly who I can–and save money to go on vacation.
airtran the best airline in us…..we need airtran service in chicago ohare…new nonstop to/from chicago ohare…thank you..erwing
@Tim-
If your only choice vacation spots are outside the lower 48 states (ie Hawaii, Mexico, etc.) then yes, you may have trouble earning miles to go on such a trip. Your strategy of saving money on the airfare to apply to your vacations is a good one. Assuming some advance notice, you can fly on Southwest from Chicago to St. Louis and back for $49 each way. (That same price exists on AA, but you can be if Southwest wasn’t flying that route, it would be more like $150 each way or more.) That’s a less than 300-mile drive, certainly less than a 500 mile flight, so you’d get (at most) 500 miles each way on AA. Let’s assume you got another 250 miles per trip from your hotel and another 250 from your rental car, for a total of 1500 miles per business trip. At that pace, you’d have to fly 17 round trips to get 25,000 miles, the minimum needed for a free ticket for a domestic flight on AA. You’d have to fly 24 round trips to get 35,000 miles, the minimum needed for a round trip to Mexico or the Caribbean. And those are capacity-controlled seats, meaning if you want to go at a popular time, forget it – you’d need double that.
On the flip side, by paying the $49 each way SW fare, you’re saving probably $200 per flight over what you’d be paying if SW didn’t fly that route. After those same 17 round trips, you’d have $3,400 you didn’t have to pay AA to put toward your vacation. In addition, 17 round trips would have earned you at least 2 free round-trip tickets on Southwest. If you were saving for Mexico, the 23 round trips (plus one or two nights in a hotel giving Southwest credit) would give you three round trip domestic tickets plus would have saved you $4,600 towards your vacation.
Not a bad tradeoff at all, in my opinion.