Actually, if you ask me (and I know, no one did), Jubak's analysis of the parallels between the European industry and the U.S. industry, as well of the positions of the various carriers in the U.S. industry, is really quite weak.
In my view, the current situation in Europe is far more similar to the U.S. industry in the 1980's, not the present. The lowering of many barriers in the EU has presented a playing field not unlike the U.S. market post-1978, when literally hundreds of new entrants took to the skies with virtually all of them failing or being acquired (along with a number of household names) within about 15 years. The number of new upstart carriers in the U.S. in the last ten years is tiny even though some like jetBlue and Virgin America have certainly garnered great attention in the media. The better-managed network carriers in the U.S. prospered and acquired others (like United, American, and Delta) in the 1980's, and even the more poorly-managed larger carriers managed to bump along and merge with others (i.e. Continental, USAir, TWA). Some like Braniff, Pan Am, and Eastern failed entirely, just as Sabena and Swissair did (to be replaced by smaller versions). I think we'll see a similar experience in Europe, though the timeline might be compressed a bit since the market's a bit smaller than the U.S. market. The better-run former flag carriers (BA, LH, AF) with strong home markets will acquire some of the smaller players in a consolidation to three to five larger network carriers. Many of the LCC's will fail with just a few growing to dominate their sector. Down the road, we may see a fight comparable to the U.S. market today, though the European legacy carriers will always enjoy some competitive advantage (absent European commission action) due to slot holdings at the most desirable airports inherited from their days as state-subsidized companies.
Turning to the issue of low-cost startups, it is true that low wages at new entrants do help to give them a competitive advantage, but many fail anyway due largely to poor management, customer loyalty to existing carriers, etc. Western Pacific, Vanguard, National II, Kiwi, and Midway II are all excellent examples of this. America West wouldn't still be here if its wages weren't among the lowest in the industry, and it's been around for over twenty years. Even with relatively limited hiring in the last three years, Southwest has managed to keep its growth in ASM costs relatively close to inflation.
The basic problem is that as labor costs creep up, poorly managed companies are unable to use low labor costs to help conceal inefficiencies in the operation. Southwest, on the other hand, runs a VERY tight ship, pays attention to their corporate culture, and hires people that they think will be a good fit in the company. While I understand that people have greater financial needs as they age, I don't exactly see why a 15-year employee ought to make twice as much as a 2-year employee unless their productivity is twice as high (or close to it).
JetBlue is a triple-threat at this point because they have (1) relatively low-paid employees, (2) good management, and (3) media buzz. It remains to be seen if their management will continue to be as good as Southwest's has been over the long haul and if they will continue to see low wage costs as employees seek a larger part of the profits. The article's author makes a somewhat fallacious comparison between jetBlue's unit cost and Southwest's unit cost given that jetBlue generally flies a far longer average stage length; a more accurate comparison would be to normalize for the differences in stage length at both.
I see Southwest reaching the upper bounds of its ability to grow solely domestically some time around 2025 -- with some variation in that date caused by expansion of other LCC's, failure/consolidation of legacies, restructuring of legacies to be more competitive, etc.
