Quote:
Originally Posted by nomarandlee
It goes beyond the scope of O'Hare, but I seriously wonder how this country only had two, now one, major LCC (Frontier and Spirit).
Meanwhile, Europe can enjoy a half-dozen LCC(Ryan, Easy Jet, Vueling, Norwegian, Eurowings), and an extensive rail network that you would figure would compete with LCCs.
Given that, I'm guessing this will give Frontier room to expand, when/if, the travel market rebounds. Or there will be another smaller LCC that will step into the fray and try to compete for a huge market of Americans who can't regularly pay the freight on the four major carriers.
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I think it's more likely that Frontier will also cease to exist within the next 3 years. They have also been rapidly losing money and that was before fuel prices surged.
These low-cost carriers don't really stand a chance when they have to compete with the basic economy offerings that AA/DL/UA offer. They can price those seats at a loss because they have premium cabins and credit card revenue can make up for it and still drive healthy profits for the company. LCC's also can't compete with the loyalty programs that the big guys can offer. Sure, you can get a Frontier branded credit card and earn miles and eventually you can redeem for a flight to... Cancun? Meanwhile the others can offer you the whole world.
To top it off, labor costs are lower in Europe (especially for airlines) and airport fees the airlines have to pay are lower since European airports get more of their revenue from retail and concessions and less from fees charged to airlines.
Suncountry and Allegiant (who are merging) have been managing to compete because they operate more as travel agencies not just airlines. It's a niche product similar to TUI in Europe.
JetBlue also is likely to be liquidated (or acquired, since they have some valuable assets such as JFK) later this year.