Originally Posted by
FlyDeltaJets87
That may be true but will the new start-ups have the size to compete? We've seen LCCs enter a lot of markets and seen the fares drop, but the passengers (Elite or not) go "Yay for the low fares!" but still fly the legacy carrier that's matching those low fares and offering other perks too (Bonus Elite Miles, Bonus Miles, etc.) as well as often offering an expanded schedule. During the time of the LCC presence, the legacy carriers are bleeding cash but they have the resources to ride out the storm and wait for the LCC to call it quits and withdraw, and then raise the fares and reduce the perks.
Will every start-up succeed? No. Does that mean that every start-up will fail in the face of competition? No. B6 managed to survive the legacy backlash pretty well, even when the legacies were throwing around some pretty ridiculous incentives to try and kill them (remember the "fly twice, get a ticket anywhere in the world" promos?). AirTran took the fight right to DL in ATL and managed to do okay. Allegiant and Spirit have carved out their niches.
Yes, the start-ups need good leadership and solid financial backing, but that is true of any start-up in a capital-intensive industry. Those that have it will manage to survive and even prosper if they execute.