Originally Posted by zoooropa

I completely agree with your post, except for one dynamic piece of the puzzle.

If RAH establishes a codeshare with UAL (just a hypothetical, for illustrative purposes here), both airlines have the ability to generate revenue.

RAH obviously wins, because they will be plugged into everyone's website and they instantly become a sizeable operation providing domestic, narrow body lift.

This is the exact gauge of aircraft that UAL has given up on, as they parked nearly 100 737's without a replacement. UAL also benefits due to the fact that a large percentage of the passengers just don't walk away from the airport when they deplane from a RAH flight. They connect to a higher yielding international flight, or at least that is what UAL hopes they will do.

With ticket prices settling into the "new normal", legacy carriers like UAL will never be able to sustain domestic narrow body lift due to the disparity between their casm and domestic yields. While they could possibly eke out a profit during booming economic conditions, they just bleed to death during the down cycles.

I think all of the LCC's have fatally damaged legacy balance sheets domestically. They will stick to the few profitable segments, and shed the rest to sub 7 and even 6 cent CASM operators, hoping for as much international feed as possible. Some is better than none.