wigstheone
Feb 6, 04, 1:42 pm
As the older U.S. airlines recover from the post-Sept. 11 travel slowdown, they are increasingly taking on the low-cost carriers that seized market share in the past three years.
As of September, seven cut-rate airlines have captured 22% of the U.S. market, up from 16% in the year 2000, according to the Transportation Department's Bureau of Transportation Statistics.
Now, after rounds of cost-cutting and shrinking, old-line airlines are adding flights, matching lower fares and offering ticket promotions to win back customers.
When low-cost JetBlue Airways of New York said it would start twice-daily service last month from Boston to the Los Angeles area, AMR Corp.'s American Airlines didn't just match the fares, it added a fourth daily nonstop flight on the prime business route and will start another next month.
In October, when low-cost America West Airlines launched nonstop service from New York's John F. Kennedy International Airport to Los Angeles International, American matched the lower fares and started a 10th daily nonstop flight at the end of last month.
And when JetBlue Airways and AirTran Holdings Inc.'s low-cost AirTran Airways began daily nonstop service from Atlanta to the Los Angeles area last spring, Delta Air Lines matched the lower fares and boosted its own daily nonstop flights into Los Angeles's LAX to 13 from eight. After JetBlue pulled out of Delta's home base of Atlanta, Delta reduced its nonstops to 11.
"The majors are starting to fight back," said UBS Investment Research analyst Sam Buttrick. This year will be the first since 2000 that the older airlines will actually grow and they are turning more of their U.S. focus on routes served by low-cost carriers, he said.
http://online.wsj.com/article/0,,SB107603222391222621,00.html?mod=INDUSTRY
As of September, seven cut-rate airlines have captured 22% of the U.S. market, up from 16% in the year 2000, according to the Transportation Department's Bureau of Transportation Statistics.
Now, after rounds of cost-cutting and shrinking, old-line airlines are adding flights, matching lower fares and offering ticket promotions to win back customers.
When low-cost JetBlue Airways of New York said it would start twice-daily service last month from Boston to the Los Angeles area, AMR Corp.'s American Airlines didn't just match the fares, it added a fourth daily nonstop flight on the prime business route and will start another next month.
In October, when low-cost America West Airlines launched nonstop service from New York's John F. Kennedy International Airport to Los Angeles International, American matched the lower fares and started a 10th daily nonstop flight at the end of last month.
And when JetBlue Airways and AirTran Holdings Inc.'s low-cost AirTran Airways began daily nonstop service from Atlanta to the Los Angeles area last spring, Delta Air Lines matched the lower fares and boosted its own daily nonstop flights into Los Angeles's LAX to 13 from eight. After JetBlue pulled out of Delta's home base of Atlanta, Delta reduced its nonstops to 11.
"The majors are starting to fight back," said UBS Investment Research analyst Sam Buttrick. This year will be the first since 2000 that the older airlines will actually grow and they are turning more of their U.S. focus on routes served by low-cost carriers, he said.
http://online.wsj.com/article/0,,SB107603222391222621,00.html?mod=INDUSTRY