Is Usairways a threat to AA's Caribbean network? The majority of there service is Saturday only and operates on A319's. Even so is there discounting hurting us, or is it getting AA off there butts to strengthen and expand our own service?
It is competition - but it can become a threat when it begins to impact AA's bottom line. At first the Southwests, Air Tran and Jet Blue were more annoyances than threat. They had their niches. Now they carry somewhere around 1/6th of the traffic. They are a major threat!!! And they way they are going - expanding while the majors contract - they have become a threat to the very existance of the majors. One could make an analogy to the dinosaurs but the majors have more opportunity to adapt than the dinosaurs. Maybe...At the rate the upstarts are expanding and the way the majors cannot seem to adapt - look at the crazy ticket price structure - 3 to 7 years to live unless they make big changes. just a guess, may be faster anf/or more painful.
It is competition - but it can become a threat when it begins to impact AA's bottom line. At first the Southwests, Air Tran and Jet Blue were more annoyances than threat. They had their niches. Now they carry somewhere around 1/6th of the traffic. They are a major threat!!! And they way they are going - expanding while the majors contract - they have become a threat to the very existance of the majors. One could make an analogy to the dinosaurs but the majors have more opportunity to adapt than the dinosaurs. Maybe...At the rate the upstarts are expanding and the way the majors cannot seem to adapt - look at the crazy ticket price structure - 3 to 7 years to live unless they make big changes. just a guess, may be faster anf/or more painful.
Well I agree to a certain point about what defines a threat and what defines competition and I agree that Usair is just competiting and not threatening since their overhead costs are not really lower than AA's and also U's capacity to the caribbean is small in comparison to AA which provides a large number of flights and better contection oppurtunities to connect to other destinations to the US through their better positioned caribbean hubs of SJU and MIA whereas U lack that advantage. I don't see AA being oven taken by U as being the biggest in the Caribbean any time soon unless AA liquidates which is not likely to happen in a very long time.
