Low-fare revolution could topple major airlines

[canyonblue]

Led by Southwest and JetBlue, the airline industry is facing a dramatic shakeup in which low-fare carriers will become the nation's dominant airlines, predicts a leading aviation analyst. Based on current trends, Southwest will pass American to become the largest U.S. airline by 2013, and JetBlue will move past Delta to become the third largest by 2020, head of ESG Aviation Services Edmund Greenslet told Aviation Week. He forecasts a boom period for the discount carriers now that their route networks have grown large enough to make low-cost service available in most business markets, Greenselt "The low-fare innovation has passed through its pioneering stage and has reached its rapid growth era," Greenslet said. "In many ways, it is a classic pattern often seen in other industries when a superior product replaces those of established producers. The initial penetration is slow, but at some stage it achieves enough critical mass to blossom into a 'must have' product. It appears that the low-fare air transportation product has now reached its 'must have' stage."

 

[KC-10 Driver]

Sounds great to me, however...

2013 and 2020 are a long way off. A lot can happen between now and then.

I honestly don't know how anyone can make a forecast like that in this industry.

Of course, I will do whatever I can to make that prediction come true -- maybe even before 2020.

 

[zymotic]

As far as I know, SWA is still restricted by the Wright amendment. They are not as restricted as when the legislation was passed but still restricted nevertheless.

 

[MLBWINGBORN]

While in the beginging the Wright amendment was somewhat restrictive to the growth of SWA..

The truth of the matter now is that its become more of an advantage for us..It has become an aid in keeping competition out of Love field and i doubt that you will see any more attemps by SWA to get it overturned..

As always what was at one time a major hurdle for SWA has now become a market advantage..

This place just kills me..

 

[USNFDX]

Is This really a good thing?????????????

Low Cost Fares are great for consumers, but it comes at a price to all of us. Low cost airlines means low cost compensation to labor. Everyone winds up getting paid like bus drivers and working their butts-off. Service levels also continue to drop. Flying as a passenger is painful. It's not so bad if you go visit grandma once a year, but if you travel alot, it gets really old.

 

[Eagleflip]

Low Cost Fares are great for consumers, but it comes at a price to all of us. Low cost airlines means low cost compensation to labor. Everyone winds up getting paid like bus drivers and working their butts-off. Service levels also continue to drop. Flying as a passenger is painful. It's not so bad if you go visit grandma once a year, but if you travel alot, it gets really old.

"Low cost compensation to labor"--we've been through this before.

Q: How much is the right pay?

A: As much as we can get. How long can the majors afford to pay the high labor costs while going under (in part) due to those same costs? We'll see that soon, but remember that while competition brings down average wages, it does so for a reason--economic inefficiencies are unstable and subject to change.

From my own perspective, wages at JB are just fine. As long as my compensation is tied to the company's success, I'm ok with the plan, since I will in turn work hard to make my future a happy one.

"Service levels also continue to drop. Flying as a passenger is painful."--While I can't see the what happens at other carriers, I don't think the average JB customer thinks this is true. As for Southwest, their pax's must be happy with their overall service taken as a part of the whole experience.

"...if you travel alot, it gets really old."--no argument there!

 

[pilotyip]

Low pay?

I don't think 150K at JB, or 200K at SWA, or even 125K at AirTran is low pay. I have never seen it and could live well at that level of pay. These are not guaranttes numers but typical of what those guys are making,

 

[Slug]

Ditto

It sure beats what I'm making now.

Slug

 

[CCDiscoB]

A classic Paradigm shift

Change or die.

I have a question, how does international flying fit in with the LCC revolution?

 

[Indapool]

flying anything that burns jet-a making any bank beats the hell out of a day job.

I tried that working for a living crap..It didn't take