USA320Pilot
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More Competition
ARLINGTON (theHub.com) - Nearly one in four domestic passengers flying from New York’s major airports uses a low-fare carrier, and the number is rising, reports USA Today. An article in today’s Money section speaks to the low-fare invasion in New York, noting that low-fare airlines’ share of domestic passengers at New York’s three airports was 22 percent in the July-September quarter of 2003, versus seven percent during that period in 1999. The market share of traditional airlines dropped to 72 percent from 87 percent in the same four-year period, according to the article. The newspaper noted JetBlue’s “phenomenal growth†at New York JFK, and gains by other low-cost carriers at LaGuardia, where the low-fare airlines’ share of domestic passengers has risen to 14 percent in four years.
Meanwhile, low-cost airlines are continuing their expansion with moves into international markets, the latest area in which the new breed of carriers is creating competition for traditional legacy airlines, according to Reuters News. America West this week announced it will start nonstop service from Los Angeles to four new destinations in Canada, Mexico and Puerto Rico, and JetBlue is awaiting U.S. government approval to start nonstop service from its New York hub to Santiago and Santo Domingo, both in the Dominican Republic. AirTran already flies to Freeport in the Bahamas and Frontier Airlines offers service to five destinations in Mexico. Spirit Airlines, which currently flies to Mexico, recently won federal approval to fly to 11 countries, including Aruba, Canada, Costa Rica and Jamaica. Southwest also may be considering starting international flights, according to Ray Neidl, analyst at Blaylock & Partners.
“Low-cost competition is about to spread to the international market," said Neidl, calling that competition "bad news" for legacy carriers, who will now face "pricing pressure" as new competition forces fares to fall. “The competition emphasizes the importance of having a cost structure that can support quality services and low fares - which we have, but legacy carriers don't," said AirTran Vice President of Planning and Sales Kevin Healy.
ARLINGTON (theHub.com) - Nearly one in four domestic passengers flying from New York’s major airports uses a low-fare carrier, and the number is rising, reports USA Today. An article in today’s Money section speaks to the low-fare invasion in New York, noting that low-fare airlines’ share of domestic passengers at New York’s three airports was 22 percent in the July-September quarter of 2003, versus seven percent during that period in 1999. The market share of traditional airlines dropped to 72 percent from 87 percent in the same four-year period, according to the article. The newspaper noted JetBlue’s “phenomenal growth†at New York JFK, and gains by other low-cost carriers at LaGuardia, where the low-fare airlines’ share of domestic passengers has risen to 14 percent in four years.
Meanwhile, low-cost airlines are continuing their expansion with moves into international markets, the latest area in which the new breed of carriers is creating competition for traditional legacy airlines, according to Reuters News. America West this week announced it will start nonstop service from Los Angeles to four new destinations in Canada, Mexico and Puerto Rico, and JetBlue is awaiting U.S. government approval to start nonstop service from its New York hub to Santiago and Santo Domingo, both in the Dominican Republic. AirTran already flies to Freeport in the Bahamas and Frontier Airlines offers service to five destinations in Mexico. Spirit Airlines, which currently flies to Mexico, recently won federal approval to fly to 11 countries, including Aruba, Canada, Costa Rica and Jamaica. Southwest also may be considering starting international flights, according to Ray Neidl, analyst at Blaylock & Partners.
“Low-cost competition is about to spread to the international market," said Neidl, calling that competition "bad news" for legacy carriers, who will now face "pricing pressure" as new competition forces fares to fall. “The competition emphasizes the importance of having a cost structure that can support quality services and low fares - which we have, but legacy carriers don't," said AirTran Vice President of Planning and Sales Kevin Healy.
