“King Solomon couldn’t start a U.S. domestic airline these days,” said Hubert Horan, an aviation consultant. “No matter how well they’re run, it’s tough for any airline that’s small to survive.”
For an interesting take on competition and structural problems in the U.S. airline market, click here.
Here’s the executive summary: Start-up and low-cost carriers will continue to struggle even though they have efficient operations. This is due to the lucrative corporate and government contracts the legacies have on their international routes. Furthermore, the hoarding of slots by legacies at hubs like ORD and EWR will eventually squeeze carriers like Virgin from the market, who are struggling to expand now. Southwest and Jet Blue are in danger too. Foreign carriers may find success in the U.S., but the law prevents foreign flag carriers from operating domestically and Congress has made clear that it will not reconsider this issue now. The future looks grim…
This is the first I’ve heard of the long-term prospects of Southwest Airlines being "bleak" so I decided to highlight the article. What do you think? I find it ironic that the author is complaining about the LCC’s inability to expand the week after Virgin American began service from LAX/SFO to Toronto and announced plans to expand to Mexico in the fall.