Mesa is already doing this to some extend: the consolidation of the LCC marketplace will contine along with the exit of some large name brands. Continental might be strong enough to digest United... you read it here first.
News Clip from Reuters:
U.S. airline leaders see consolidation in industry
FORT WORTH, Texas, May 3 (Reuters) - The leaders of three of the largest airlines in the United States said on Monday they see a future of consolidation and change in the industry that may result in fewer large-network and low-fare carriers.
"There will be fewer of the legacy, or network carriers. What is harder to fathom or figure out are which ones are going to make it," said Gerard Arpey, chief executive of American Airlines' parent company AMR Corp. (AMR.M: Quote, Profile, Research) .
Over the long term, passengers were likely to see the removal of some familiar names from the market, Arpey said in a panel discussion with Gordon Bethune, chief executive of Continental Airlines (CAL.N: Quote, Profile, Research) and Jim Parker, chief executive of Southwest Airlines (LUV.N: Quote, Profile, Research) .
Arpey and Bethune agreed with the notion that there may only be two or three each of the large-network carriers and low-fare carriers in the long term.
Despite the success of some low-fare carriers, Bethune said that consolidation would come to that end of the market as well.
"It is foolish to believe that all are going to fly," he said.
Their comments come as almost all of the major airlines are struggling to recover from the massive economic hit they took after the September 11, 2001, attacks on the United States, when air travel demand plummeted.
"I think there may be different airlines. I don't know if there will be fewer airlines," Parker said, adding there were a number of obstacles that made it difficult for a troubled airline to be cast on the trash heap of history.
Some of the barriers that make if difficult to exit the industry are decades-old transportation regulations that may prevent a troubled airline from folding, and organized labor.
American's Arpey said that even with fewer airlines, there still should be a high level of price competition.
"The way these networks work, you don't need that many airlines to have very low prices," he said.
© Reuters 2004. All Rights Reserved.
News Clip from Reuters:
U.S. airline leaders see consolidation in industry
FORT WORTH, Texas, May 3 (Reuters) - The leaders of three of the largest airlines in the United States said on Monday they see a future of consolidation and change in the industry that may result in fewer large-network and low-fare carriers.
"There will be fewer of the legacy, or network carriers. What is harder to fathom or figure out are which ones are going to make it," said Gerard Arpey, chief executive of American Airlines' parent company AMR Corp. (AMR.M: Quote, Profile, Research) .
Over the long term, passengers were likely to see the removal of some familiar names from the market, Arpey said in a panel discussion with Gordon Bethune, chief executive of Continental Airlines (CAL.N: Quote, Profile, Research) and Jim Parker, chief executive of Southwest Airlines (LUV.N: Quote, Profile, Research) .
Arpey and Bethune agreed with the notion that there may only be two or three each of the large-network carriers and low-fare carriers in the long term.
Despite the success of some low-fare carriers, Bethune said that consolidation would come to that end of the market as well.
"It is foolish to believe that all are going to fly," he said.
Their comments come as almost all of the major airlines are struggling to recover from the massive economic hit they took after the September 11, 2001, attacks on the United States, when air travel demand plummeted.
"I think there may be different airlines. I don't know if there will be fewer airlines," Parker said, adding there were a number of obstacles that made it difficult for a troubled airline to be cast on the trash heap of history.
Some of the barriers that make if difficult to exit the industry are decades-old transportation regulations that may prevent a troubled airline from folding, and organized labor.
American's Arpey said that even with fewer airlines, there still should be a high level of price competition.
"The way these networks work, you don't need that many airlines to have very low prices," he said.
© Reuters 2004. All Rights Reserved.
