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Low-cost carriers' market share continues to increase; & other travel news you can use-11/30/09
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LEGACY CARRIERS CONTINUE TO LOSE MARKET SHARE
Back in 2000 nearly 90% of domestic airline traffic was controlled by legacy carriers Alaska, American, Continental, Delta, Northwest, US Airways and United. That number has changed dramatically to the point where the legacy share is down to 74%, with low-cost carriers such as AirTran, JetBlue and Southwest now taking in 26% of U.S domestic passenger travel. Low-cost airlines have the ability to enter new markets quickly with lower fares, and this trend is expected to continue indefinitely. The legacy carriers continue to carry higher debt loads and expensive union contracts that make it impossible for them to be profitable at the price levels that are more and more frequently set by the low-cost airlines. Southwest Airlines took in 64% of the revenues of the low-cost carrier category in the second half of 2009 to date.
US AIRWAYS DEFERS DELIVERY OF 54 NEW JETS
Saying that it can't keep losing money indefinitely, US Airways last week said that it will not take delivery of 54 Airbus aircraft that were slated to arrive beginning in 2015, until at least 2017. The airline is working to bolster its financial position and the delay in aircraft acquisitions will increase available cash by $150 million, up to $450 million at the end of next year. With the change in the aircraft delivery schedule US Airways will still receive 28 new aircraft over the next three years. Given the extreme weakness of the airline industry and current travel trends, the carrier believes that the deferral of further new aircraft until the industry rebounds makes fiscal sense.
ALASKA AIRLINES ADDS NEW CHICAGO O'HARE ROUTE
Portland, Oregon to Chicago O'Hare is the latest Alaska Airlines route to the 'Windy City'. Service began in mid-November. In addition to the new flights between Chicago and Portland, Alaska also flies from O'Hare to Seattle and Anchorage. Other new service recently begun by the airline includes increased service from the west coast to Hawaii, which is becoming an increasingly important market. Oakland International Airport non-stops to Maui and Kona on the Big Island also inaugurated in November. The two Hawaiian islands also gained non-stops from Portland earlier in the year.
AIRTRAN TO BEGIN NON-STOP ORLANDO SERVICE FROM DES MOINES
Orlando's home-town airline has announced new non-stop between Orlando and Des Moines, Iowa beginning March 6, 2010. Twice weekly flights via AirTran Airways will operate on Saturdays and Sundays on Boeing 717 aircraft. Des Moines will be the 43rd non-stop Orlando market offered by AirTran, more than any other airline from the home of Disney World, Epcot Center, Universal Studios and Sea World.
THE BATTLE FOR MILWAUKEE CONTINUES TO HEAT UP
It's the hub for Midwest Airlines, a small but growing hub for AirTran in conjunction with feeder service from SkyWest, a new city altogether for Southwest Airlines and now, American Airlines will be adding flights between Milwaukee and Dallas/Ft. Worth via its American Eagle affiliate. Utilizing 50 and 70-seat regional jets, American Eagle as of January 31 will offer five daily non-stops between Milwaukee and DFW. This is in addition to two newly announced non-stops in the market from AirTran and three existing flights everyday from Midwest. Seats in the market will nearly double and accordingly, fares are expected to plummet on the city-pair.
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