Originally Posted by
mozilla
According to this article, three new airlines started flying in the US this year, but there were also three airlines that closed books. Europe seems to do much better with a lot of new players spreading their wings, even though that continent is dealing with more geopolitical instability and terrorist threats. So what is holding America back?
You've the sequence wrong. The U.S. deregulated fully two decades before Europe. U.S. legacy airlines became relatively more competitive (although it took a lot of bankruptcies to do it). Certain European legacy carriers have been slower to reorganize to face competitive pressures (cough Air France, Alitalia, Sabena...) due to labor laws and their declines made it easier for LCCs to enter and grow to critical mass. Small LCCs don't have the frequency or destination counts to compete with U.S. network carriers. The lesson from JetBlue's successful entry? Bring money - lots of it.
http://www.nytimes.com/1999/07/15/bu...e-airways.html
European legacies have been consolidating for over a decade: see AF+KL, BA+IB, LH+SN+LX+OS. They're on substantially the same path as U.S. carriers but they haven't hit the happy carrier count for sustainable, market cost-of-capital profits.